How do low costs of switching orders affect the bargaining power of suppliers?

Low costs of switching orders between suppliers inherently give buyers more options and allow them to change suppliers without incurring significant penalties or costs. This increased flexibility diminishes the bargaining power of suppliers because buyers can easily find alternatives if a supplier tries to raise prices or impose unfavorable terms.

When switching costs are low, buyers can negotiate more effectively, using the threat of switching to another supplier as leverage. Consequently, suppliers must remain competitive in pricing and service to retain their customers, resulting in a weakened position in negotiations. Thus, low switching costs empower buyers, which is why this answer is appropriate.