I’m going to offer you a business proposal. First, let’s assume your company is qualified to meet the needs of mine, so there isn’t anything to stop us from engaging in contractual business. Now, a bit of background for context. In my business, we need to acquire 500 shares of Amazon stock in 2021. We’re not certain of the timing of our needs, but we think we’ll need to buy one share, twice a day, every week, for all of 2021. We do not have the necessary access to buy these shares ourselves but we need to budget accordingly for the year, so we’re putting out an RFP to brokers (of which, your company is one) who can source these shares for us, when we need them. This is what we envision for our RFP:
We’re asking for quotes from 25 providers with their price for each transaction of one share of AMZN, inclusive of the share. We want this price to be uniform across each transaction, so that every time we send you our demand for one share, you bill us at this agreed upon rate and we receive one share of AMZN.
Currently, AMZN is $3,200.
The average price for AMZN in 2020 is $2,800.
The average price for AMZN in 2019 was $1,800.
The price history for AMZN appears to contain some seasonality; it’s more expensive from May through September than October through April by 10-15%.
What price would you offer me for 2021?
What happens if my demands for shares are twice as high in May and June, and very scarce in January and February, but you priced your quote on an even distribution?
What would you do if three months into our contract, the price of AMZN is lower than the price you contracted with me, and I ask you to lower your price?
What would you do if three months into our contract, the price of AMZN is higher than the price you contracted with me?
Does this sound like an appealing proposal to you?
Can someone please explain to me how this is an acceptable practice inside of the freight industry?