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5 Tips for Negotiating with Suppliers
How do you handle negotiating with suppliers? Any business owner needs to have prerequisite skill requirements and one of the most important and actually the most critical, we can say, is communication skills. In leading a business and pursuing its goals and objectives, effective communication is key. Whether you are speaking or writing to colleagues, clients, or your suppliers, the art of communication needs to be applied to ensure a smooth flow of conversation, elicit adherence to your command or order, and eventually materialize your intent and desired outcomes. Fostering good business communication skills pay off with a healthy working relationship between you and your stakeholders. This the ultimate roadway to improving everyone’s productivity, efficiency, and morale.
The biggest challenge, however, in business communication is the need for negotiating. In a textbook definition, negotiations are a way to resolve disputes and it is often associated with various terminologies like settlement, bargaining, agreement, and collaboration. While these words pose a heavy and taxing connotation, they should be taken lightly and positively as any negotiation indicates a chance to turn tables and leverage the business game. A successful negotiation, especially with suppliers, can have a positive effect on your company’s financial gains or simply improve the quality of the goods and services you deliver.
Often, supplier negotiations are a little tricky and are tagged a mind game because suppliers are put at a superior level in consideration of their power over the buyer. Because of this, they might take control of your dealings by pressuring you, raising prices, lowering the quality of the products, or reduce product availability.
Luckily, you have this list of negotiating tips to ensure you can shake hands with your suppliers and close a deal that is favorable to you.
5 Easy Steps to Negotiating With Suppliers
Invest in rapport and positive feedback.
Like you would with a client, you must also put an effort into building a good work relationship with your suppliers. In building rapport, suppliers can be provided with the idea that it is not only their business that is of interest to you but their professional companionship as well. Any kind of relationship guarantees loyalty and this is a great way to surface that subliminally. Meet your supplier face-to-face and keep your conversation within a 60-40 rate. Sixty percent business and forty percent personal. Halfway through, throw in positive feedbacks you have heard and what impressed you just so that he knows your considerations in tapping them. Perhaps you can also express that you are interested in how they manufacture their goods so you can be invited over or their plans for development and expansion. While you are at it, you can reciprocate this with an invitation to some of your company parties or events to ensure he understands that you do not just always mean business but a genuine partnership.
Do your research and expand your options.
However, keep it to yourself. Let your research be your guide whether or not you are making a good deal out of your negotiations with your supplier. Research should always be taken to your advantage especially for your position in the conversation. It pays to know if the price is worth negotiating for or when the other suppliers will not make it hard for you. It is still business anyway. If it is a hard sell or maybe after 2 or 3 meetings with them, respectfully mention that you will also get a quote from other suppliers and make decisions based on competitive pricing. That is if you find them too stiff or tough.
Tell the supplier what is in your deal for them.
In your meetings, you might want to cite ways where both of you can benefit from the deal you are offering and you can also indicate this in your agreement. Suppliers like early payers so you can capitalize on this advantage in your offer. Tell them you can pay early, give a huge fraction of the sum for the down payment, have him offer a discount for bulk purchases, and other ways that he might find a great benefit from. In terms of delivery, maybe he can let you have the price you want if you will be the one to shoulder and arrange the pick up of goods on your own. If you can place an order early and do not require fast turnarounds, it is more likely that they will keep your business. If you can make them understand that dealing with you can be much lighter than their other partners, it will be easier for them to accept your offer.
Be straightforward about your offer.
Suppliers appreciate it when you are straightforward especially if they are always after time and money. If they value any sale, they would make it possible with your deal. After your introduction, you can tell them how much your budget is. This can help them make a plan on how they can work on it and help you. Let them know the areas where you can allow a healthy compromise.
Allow time for both of you to think it through.
Normally, suppliers would ask you about your lead time and schedule and you might want to share with them an honest and accurate timetable so they can also provide you with their projection. In your meetings with them, ensure that all the information you think they might need in making a decision is provided so that they can go back to their office and specifically tailor an offer for you. Allow them time to process everything. Of course, they do not want to say yes right away and then bail out of it. Take this time, as well, to make a backup plan in case they might turn your offer down.
Negotiating with suppliers is vital to the success of your business. Without them, you will not have anything to deliver to your clients. This is why you must let your silver tongue roll and do its magic. Be mindful of how they react to your statements and ensure each meeting warrants a negotiation. If you noticed a certain disinterest at the onset of your conversation, you might have a hard time but if it seemed like they are open to some compromise, the negotiation will be worth the try.
Here’s an article about improving your cash in your business.
Natasha Barbeyto-Castaño is a beauty, wellness, and lifestyle writer. She took up Fashion Design and Merchandising in college and was hired as a personal shopper for a high-end department store right after graduating. Writing for the beauty and fashion sections of a society magazine and being head of content for a clothing company kept her busy before getting married and having a little boy. She learned to read at the age of 3 and wants her son to grow up sharing the same love for books. Nowadays, this organic wellness nut and attachment parenting advocate balances working from home and being a housewife. She enjoys watching psychological thrillers and foreign-language films with her husband during her free time.