Recently, I was watching the news and there was a segment on about these companies that will buy your old gold jewelry and send you a check. The news reporters got an unbiased jeweler to give them $400.00 worth of gold and they then sent it to a variety of these gold buying companies that advertise on the web and in newspapers. After a few days, they received checks back from these companies ranging from $26.00 to $315.00 – all below the real market value for the gold they sent. The news show then visited some local jewelers and received better pricing (I think there is a lesson there) but none gave them the $400.00 that the gold was worth.
Now let’s say you did not know the gold was worth $400.00. You hopefully would have sent it to a reputable company that gave you close to what it was worth, but in the above example the best offer was still below 22% below what they should have received.
The point here is that accurate information as to the value of a service or a product is key to negotiating a competitive contract. Relying on any vendor’s renewal or proposal to give you an accurate gauge on the value of their services is Fool’s gold.