Closed-book tendering is quietly costing organisations far more than they realise.
Procurement has evolved dramatically — yet many procurement processes haven’t kept pace. Closed-book tendering has long been seen as a fair and competitive approach: publish a tender, compare proposals and select the best price. In theory, it works. But in today’s supply chain landscape, where almost every supplier sources from the same national distributors, the model no longer produces true competition. Instead, it invites inflated pricing, tactical behaviour, outdated contract lists and internal friction.
Open-book trading offers a smarter, clearer and far more modern alternative.
The Hidden Flaw in Closed-Book Tendering
In most indirect procurement categories — from office supplies and FM consumables to PPE, branded materials and tech accessories — suppliers all buy from the same major distributors. This means every bidder is effectively quoting from an identical cost base. Distributors often protect their margins, meaning they rarely support aggressive pricing for new contenders. As a result, suppliers submit proposals based on padded or unverified costs, and clients end up comparing several versions of the same inflated price list without realising it.
This illusion of competitiveness leads to a familiar pattern: outdated product lists, inconsistent pricing, non-core costs spiralling, frequent product substitutions and frustrated end-users. What appears to be a competitive process is actually a tender built on identical starting prices presented in different formats.
Closed-Book vs Open-Book: What £1M of Spend Really Looks Like
A typical organisation with £1 million in annual indirect spend might assume their tendering process secures value. Under the closed-book model, however, that £1 million usually sits on a true cost base of £650,000–£850,000. The difference — often £150,000–£350,000 — becomes hidden margin absorbed through distributor mark-ups, reseller margins, recovery pricing and tactical cost manipulation across non-core items.
Operationally, this shows up as end-user complaints, outdated SKUs, sudden item swaps after contract award, and unpredictable overall spend.
By contrast, open-book trading starts with the true cost of products and services and layers on a fixed, transparent service fee — typically £72,000–£144,000 per year, depending on scope. This creates predictable, auditable spend and eliminates hidden margin entirely. Clients gain visibility at SKU level, enjoy stable pricing, and maintain the freedom to keep preferred suppliers while benefiting from aligned incentives and quarterly cost reviews.
In simple terms: closed-book tendering leaves organisations paying £1 million. Open-book models generally bring the total closer to £750,000–£900,000 including full support.
The Catalogue & Pricing Problem: Why End-Users Push Back
One of the most common frustrations in closed-book environments comes from end-users who notice lower prices online for the same items. They’re often right. Contract lists age quickly, items become obsolete, and recovery margins distort pricing across the catalogue. Suppliers are forced into tactical decisions that don’t reflect real market costs, and trust erodes between procurement teams, suppliers and internal stakeholders.
Open-book models eliminate this tension entirely because pricing simply equals cost — nothing more.
Why Suppliers Behave Tactically Under Closed-Book Models
Suppliers aren’t acting in bad faith; the closed-book model forces tactical behaviour. To win a contract, they must undercut on high-visibility SKUs and compensate by inflating prices elsewhere. They often quote blind on baskets based on last year’s data, guess at future demand, and resort to margin-recovery tactics that introduce instability and frustration for clients.
Open-book trading removes these distortions. With the supplier’s margin fixed upfront, there is no incentive to manipulate pricing or item selection.
How Open-Book Pricing Builds Trust Through Evidence
Despite its name, open-book trading is not founded on trust — it’s founded on verifiable data. Clients gain access to distributor files, electronic cost-base reports, SKU-level breakdowns, independent benchmarking and audit rights. Quarterly three-way reviews between client, supplier and distributor ensure continued accuracy. This provides not only transparency but also live verification of every cost.
Why Tenders Based on Last Year’s Usage No Longer Work
Traditional tenders rely heavily on 12-month usage reports, but these are rarely reliable indicators of future needs. Usage patterns shift, product ranges evolve, sustainability initiatives reduce consumption, and legacy items quickly become obsolete. This means suppliers quote blind, clients evaluate blind, and contracts are awarded blind — perpetuating a cycle of inaccurate pricing and misaligned expectations.
Open-book trading avoids this entirely. With live usage feeding directly into live cost, organisations avoid outdated contract lists and eliminate unwanted surprises.
The Long-Term Value of Open-Book Trading
Open-book models offer organisations far more than price efficiency. They deliver clarity, trust, predictable spend, reduced administrative burden, improved data, fewer disputes and better alignment between supplier and client. Suppliers are rewarded for service, innovation, responsiveness and operational value rather than hidden margin — shifting the focus to long-term partnership rather than tactical cost engineering.
This is what modern procurement should look like.
The Bottom Line
Closed-book tendering made sense in an era where suppliers had genuinely different cost bases, usage was predictable and contract lists remained relevant for years. That world no longer exists. Today, open-book trading is transparent, auditable, aligned with real operational needs and demonstrably more competitive.
For organisations looking to modernise procurement, improve trust and unlock real value, open-book trading isn’t just a viable alternative — it’s the future.
