Negotiating the right deal with your suppliers doesn’t necessarily mean getting the lowest possible price as you expect. There are other components that you can negotiate as well such as payment terms, warranty period, delivery times, product quality and many more. Negotiations must result in an agreement that benefits both parties. If you want to build long-term relationships with your suppliers, you need to set up good tactics to negotiate with them. Here are eight strategies for negotiating the right deal with them.
1. Explain Your Needs Concisely
You need to understand what you need if you want to get the right deal. Know the product specifications that you want so you won’t end up babbling when dealing with suppliers. They may offer some other products beyond your needs, but if you stick to your needs, you will find it easy to say no. Suppliers will most likely give you accurate quotes if you’re able to describe the features you need specifically.
2. Figure Out the Market Price
Do some research on the price of the products you are looking for in the market. Find out the price offered by your supplier’s competitors too. This way, it will be easier for you to estimate how much discount you can negotiate with suppliers.
3. Ask for References
Before negotiating, request some of their customer data for references. If you ask their customers nicely, you can get important information about the prices, the quality of the products and the services they have been getting from your prospective suppliers.
4. Don’t Focus on the Price
Do not be disappointed if your suppliers don’t want to budge on price. Consider negotiating some other things such as faster shipping, easy payment, and any other important elements. If you’re buying software, then you can ask them to provide you with additional features, free updates, extended warranty, and more.
5. Increase Your Deposits
If getting a discount is very important to you, you can try offering higher deposits to your suppliers, for example, 50 to 70 percent of the total price. The higher deposits you offer, the bigger discounts you might get.
6. Think Like a Supplier
Stop treating negotiations as duels that you have to win. Suppliers are also looking for profits. Try to position yourself as them and spend some time to learn their needs so that the needs of both parties can be equally met.
7. See Multiple Suppliers
You must have a comparison in order to find the best deal. D.C. Fawcett of Paramount Digital Publishing says that he met several suppliers and told each one of them that he got some quotes from some other suppliers too. If you let them know that you will give them long-term benefits, they will most likely try to beat their competitors by offering you the best price. You can also use this technique to compare one supplier to another.
8. Build Good Relationships with Them
After finding the right suppliers, all you need to do now is keep them. Treat your suppliers like your partner. If your suppliers feel happy to work with you, you will most likely get more benefits from them.
To facilitate your communication with them, consider using automated systems in your supplier management. A well-automated system provides you with various conveniences such as an online ordering portal, complete supplier data storage, and many more.
So, what is your take on these strategies? Is there another negotiation strategy that you use to get the best deal from your suppliers?