【正文】 it is instead based on creating, emphasizing, and capturing more of the economic value from a product or service for all downstream players. A supplier that takes this approach goes beyond its current catalog by inventing binations of products and services and by suggesting outsourcing opportunities 9 / 14that meet each customer抯 longterm needs better than its petitors could.Selling value is different from the traditional job of selling basic materials. To make the transition and master the art of value selling, a pany must often change the skills and even the personnel of its sales force, which will have to undertake additional knowledgebuilding activities such as conducting interviews with customers, end users, and industry experts。 visiting customers?sites。 that is, they hope to stay off the sourcers?radar screens by keeping a low profile. But sourcers are systematically moving up the value chain and will eventually confront almost all panies.When that happens, suppliers must be able to avoid surrendering value on any terms the sourcers choose. The key to success is to understand the sourcers?approach, which focuses on total value rather than lowest price, and to prepare the anization for a new 5 / 14kind of selling. In this way, a supplier can restore the balance of power with its buyers and give them greater value while not threatening its own viability.For most basicmaterials suppliers, two measures should go a long way toward rebalancing the scales: countering the knowledge of the sourcers by understanding the economics of the panies they work for and retraining the supplier抯 entire anization to sell not just volume but also more value (Exhibit 1). The amount of emphasis a supplier places on each option should depend largely on how active sourcers are in its industry. A pany that has already been critically weakened by their power probably also needs to reevaluate its core business梩 hat is, the way it makes (as opposed to sells) its products.WISE UP6 / 14Since sourcers e to the negotiating table armed with a detailed understanding of their own and the supplier抯 economics, the supplier must do the same. That is, it must understand how it makes (and loses) money from its current customers, the key factors that make them buy, and its petitors?blind spots.As we have seen, the sales reps and even the managers of a supplier often only vaguely understand its economics, because the relevant information is dispersed across functions and IT systems. Thus, for example, sales reps who must factor the cost of freight into an invoice price when their own pany pays for shipping may have only a rough idea of what the real cost might be. A detailed analysis of individual transactions at one European chemical pany showed that, for some clients, freight expenses borne by the supplier actually exceeded the invoice price when expedited arrangements were factored in. Warehousing too, though not always itemized on invoices, can sharply reduce a customer抯 value to a supplier.Indeed, suppliers rarely calculate the pocket price3 for each order or customer. But the pocket price is vital for making a key strategic decision: whether the supplier should walk away from any customer抯 business. At a minimum, information about a customer抯 historical price performance should strengthen the supplier抯 resolve during negotiations by showing where losses usually occur. If a pany 抯 customer base is very fragmented and scrutinizing individual accounts isn抰 practical, analysis of groups based on considerations such as purchasing patterns, key buying factors, or size could inform these decisions.7 / 14To raise prices or cut service levels for an underperforming customer to the point where it might defect, a supplier抯 sales force must embrace a profound cultural change and develop the ability to assess risk. The payoff is a better negotiating stance and thus improved margins. Dropping a customer always pose