Everything in business is negotiable, including suppliers’ fees. But how do you get suppliers to reconsider their prices? Here are some supplier negotiation tips that may help you get a more fair price.
1. Shop around
It is good to keep in mind that there is opportunity in shopping around. If several different suppliers are available, talk to a few of them and let them know what you are doing. Nobody wants to be edged out of a potentially profitable job by a competitor because they have set too hard a line on price. When you mention your next stop is with the local competition, you may suddenly find some wiggle room appears.
2. Consider inventory size
Before bargaining, you should consider how important this particular supplier is to your business. Is this someone you are relying on for only a small portion of your inventory? If so, getting the best deal is not as critical as with someone you are banking on for 80% of your supplies. But if this is going to be your sole supplier, it is more important than ever that you negotiate the best deal possible.
3. Come Prepared
Research what it costs your supplier to produce the product. That way you can make an educated guess as to how much negotiating room you have. You can, of course, ask suppliers directly for their prices.
4. Check their prices
Another place where you can get a solid idea of your suppliers’ numbers can be by going to their customers. If you ask them about their experience with the supplier, you may find they’re happy to divulge how much the supplier is charging them as well as how good the service has been. If there have been hiccups from a particular supplier, this may even give you additional leverage you can bring to bear in your negotiation.
5. Put more money down
The more you’re willing to deposit up front, the greater your bargaining power becomes. This eases suppliers’ fears that getting their fees from you will be a protracted battle. You become a plum client, giving you more negotiating heft.
Also, remember you can get suppliers to adjust their price based on the quality of the product, length of time until delivery and payment terms.
6. Be prepared to walk away
Be prepared to leave the negotiating table if you feel the supplier is giving you a raw deal. If you have a few other suppliers you can turn to in this situation, you will come across as more assured and are apt to get a better deal. If not, you will at least be in a position to nix the deal and walk away with a better deal from someone else.
Keep in mind that the best negotiations are ones where everyone walks away feeling as if they got something. In many cases, your dealings with the supplier will be ongoing, so remember this when closing the deal
For more in-depth information on how to handle a negotiation, check out these negotiation tips for small business success.