What is market leverage?

Market leverage refers to the ability of a purchaser to strongly influence commercial negotiations. This concept arises from the position of power that a buyer holds in a market, which allows them to impact the terms and conditions of contracts and dealings with suppliers. When a buyer has significant leverage, they can negotiate better pricing, improved delivery terms, and other favorable conditions due to their purchasing power or the competitive environment in which they operate.

This often occurs in situations where there are multiple suppliers competing for a buyer's business, allowing the buyer to exert influence over negotiations. Buyers with substantial market share or unique purchasing capabilities are typically able to leverage their position more effectively in negotiations to achieve desired outcomes.