8 Ways to Negotiate the Best Deal with Your Suppliers
Suppliers have an important role in the smoothness of business processes, no matter the industry. As a business owner looking for a supplier, you need to be well prepared before negotiating with them in order to get the best deal.
Negotiation is a very reasonable activity done in every business. Whether it be with clients, partners or suppliers. When it comes to negotiating with suppliers, you need to know some good tactics to get the best deal possible. To help you get the right outcome, consider these following tips.
1. Clearly Communicate Your Needs
In order to get the best deal from suppliers, you need to understand what you need first. Before you meet them, you should have determined your product specifications so you won’t babble while explaining your requirements to them. The supplier may offer you a variety of additional products, but if you are well aware of your needs, you will find it easier to sort them out. You will most likely get accurate quotes if you know exactly what you’re looking for.
2. Know the Market Price
Before you meet a supplier, you should have figured out the market price of the products you are looking for. How do their prices compare against their competitors? This is necessary to help you determine how much discount you should ask from the supplier later.
3. Ask for References
Before negotiating with a supplier, you should ask for some of their customer details for your reference. Their customers may be able to provide you with some information related to the price and the quality of the products you’re looking for or even their experience with the supplier.
4. Don’t Just Focus on the Price
If the supplier won’t budge on the price, don’t be disappointed right away. Think of the product features or any other benefits you can expect from them. For example, if you look for a software, you can ask the supplier to provide you with free software updates. You can try requesting an extended warranty and even a discount when you purchase in bulk or pay early.
5. Offer Higher Deposits
If you want to keep focusing on the price, you can try offering higher deposits to your suppliers, for example 50 to 70 percent of the total price. The higher the deposits you offer, the higher your chance of getting discounts from the supplier.
6. Position Yourself as a Supplier
Try not to see the negotiation as a battle (it’s clearly not), but as a collaboration. Just like you, the supplier also wants to make profits. Try to think like a supplier and spend some time to figure out what they need as well, so both of you can make a mutually beneficial deal.
7. Talk to Multiple Suppliers
Don’t just ask for a quote from one supplier. DC Fawcett of Paramount Digital Publishing says that if you want to get the best deal, then you should meet several suppliers at once so you can compare one to another. It’s okay to let one supplier know that you’re also getting quotes from some other suppliers. This will encourage them to offer you more competitive prices.
8. Maintain Good Relationships with Them
If you have found the right supplier, then your next job is maintain them. Don’t just focus on getting benefits, you also need to make your suppliers feel good working with you. Try to treat them as your partner.
Having good relationships with suppliers will have a positive effect on your business development. To improve relationships with suppliers, consider implementing automated solutions in your business. Automated systems help you keep all your supplier data in one place and provide an online portal that makes it easier for you to communicate with all your suppliers.
What are the challenges you encounter when negotiating with suppliers? Any other negotiation methods that you use to get the best deal?