Negotiating with your small business' key suppliers can be exciting and stressful at the same time. You have to ensure that you get the best deal possible (which will decrease your expenses and increase your profit) while protecting your suppliers' interests, too (meaning they shouldn't feel as if they're being forced to the corner). It's a tricky path to navigate, one where your negotiation skills will surely be put to the test. Here are four tips to help you get the deal of your dreams when you leave the bargaining table.
1. Do your research.
You can't negotiate a certain price with your supplier if you don't have an idea about the actual cost of the product. Aside from that, you wouldn't know how much wiggle room you'll have when negotiating if you left this important information out. For this reason, it pays to do your research first before sitting down with them. Make sure that you're also getting quotes from other suppliers and those they're currently doing business with so that they know you've done your homework.
2. Put yourself in the suppliers' shoes.
Let's face it. Your suppliers probably want to sell the product you're negotiating about in the highest price possible that they can sell it for. If so, you'd have a hard time negotiating on the price. When this happens, focus your efforts on other areas where you can negotiate a better deal including but not limited to the product's scope of warranty, down payment, faster shipping without additional fees, and others. You may even get a discount when paying earlier or when you purchase the product in bulk. The key is to think like your supplier. Highlight the areas where it's a win-win for both of you and communicate what you want to them in a way that they'll see you're someone who will give them more business.
3. Ready your deposit.
When you're ready to make a deposit of 50 to 70 percent, you'll have more negotiating power than your supplier. Yes, they want to sell their product for the highest price they can but at the end of the day, it all comes down with getting paid the soonest possible time. Thus, you get the upper hand when you make them aware that you have your deposit available anytime you come to an agreement that's favorable to both of you.
4. Enlist the help of the experts.
Business contracts and deals with all the legal stuff they involve can be complicated and time-consuming. So when you've come to an agreement with your supplier and all that's left is the paperwork, make sure to have your business lawyer review the terms of the contract before you sign it. This will keep you from trouble while helping you focus on your customers and the industry that your small business serve.
Don't Be Afraid To Walk Away
No matter how good your negotiation tactics are, there's still a chance that your supplier won't yield to what you want to happen. If so, don't be scared. It's all part of the process. There are a lot of suppliers out there who may be more willing to work with you. It's best to find them even if that means waiting a little longer than settling for anything less.