Buying isn’t always easier than making it yourself

“We should buy that company,” a sales manager of one of my product lines suggested. We were discussing the margin a supplier made, leaving little room in our margin when reselling the product. I explained that our supplier does the same kind of calculations, meaning that the price we would pay would be at least their total margin over the next few years. And the depreciation of the acquisition costs would put even more pressure on our margin. Moreover, our competitors buying the same product would be less willing to continue buying from us, making it harder for us to realize the same margin as the current supplier. So, not a good idea.