The Procurement Glossary » Vendor Lock-In
Vendor Lock-In
Suppliers & Vendors
Definition
A situation where switching away from a supplier is difficult or costly, reducing the buyer's leverage and choice.
Explanation
Lock-in arises from proprietary technology, high switching costs, data portability barriers or deep integration. It weakens negotiation and raises risk, so buyers design against it with standards, exit plans and data-portability terms.
Example
Proprietary file formats create vendor lock-in, so the buyer negotiates guaranteed data export in the contract.
Related terms
- Exit Plan — A pre-agreed plan for winding down a supplier relationship smoothly, covering handover, data and continuity of supply.
- Sole Sourcing — A situation where only one supplier can provide the required good or service, leaving the buyer no competitive alternative.
- Total Cost of Ownership (TCO) — The full lifetime cost of a purchase — not just the price, but delivery, installation, operation, maintenance, downtime and disposal.
- Supplier Risk — The exposure a buyer faces from a supplier's potential failure — financial, operational, compliance or reputational.
Frequently Asked Questions
What is Vendor Lock-In?
A situation where switching away from a supplier is difficult or costly, reducing the buyer's leverage and choice. Lock-in arises from proprietary technology, high switching costs, data portability barriers or deep integration. It weakens negotiation and raises risk, so buyers design against it with standards, exit plans and data-portability terms.
Can you give an example of Vendor Lock-In?
Proprietary file formats create vendor lock-in, so the buyer negotiates guaranteed data export in the contract.
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