In our experience, you secure the best deals from a supplier if you adopt a collaborative approach. Rather than using assertive negotiation tactics to unsettle and defeat suppliers, learn to collaborate and work as partners, developing a strong, mutually beneficial relationship that generates cost savings for your business and customers.
Here are our five top tips:
1. Collaborate with suppliers
The best thing I learned is to share data with suppliers. The statistics do all the talking! If you’re an etailer, show the traffic their product receives on your page to show the volume they could be shipping, or demonstrate the boost in volume sales generated by a previous discount.
2. Theoretical modelling
Understandably, suppliers won’t negotiate on price if the only benefit they can see is to you and your profit margins. Theoretical models are a chance to demonstrate the profit both you and the supplier can make.
It can take quite a bit of time to work up theoretical models for clients, but think of it as an investment. Remember, every model you work up gives you an opportunity to grow sales and beat competitors.
The problem with a theory is that it doesn’t put pounds in anyone’s pocket – so put your money where your mouth is. Suggest trialing a different price point to see whether the numbers stack up, being careful not to trial anything during a season that might invalidate your results. If it works, you’ve strengthened your argument, if it doesn’t go back to your models and work out why.
4. Be realistic
Be sensitive to your supplier’s margins. We all know the first rule of negotiation is to low ball. But be realistic. No one wants to see their products flogged. And likewise, you don’t want a potential supplier to walk away because your expectations seem too high.
5. Added incentive
As it’s all about collaboration, think of the extra incentives you could offer to prove your support of their product. Could you feature their product on your website homepage in return for a price decrease?
Ian Cowley is the Managing Director of cartridgesave.co.uk – the UK’s largest dedicated printer cartridge company.