Too good to be true

29Apr08

There are many anecdotes that teach us to be wary of unusually low prices. In my experience, this is especially relevant when you’re buying something that involves an ongoing or recurring relationship with the seller. Regardless of how you scored the deal — whether by taking advantage of a novice sales rep or using questionable negotiating tactics — someone at the provider is eventually going to re-evaluate your account. And when they see how grossly unprofitable it is, they’ll either raise your prices, reduce your service level, or terminate the relationship altogether. In each case, you’ll probably be worse off than if you had just struck a fair deal in the first place.