Learn how to negotiate with your suppliers in order to reduce your costs and increase the profitability of your establishment.
When was the last time you renegotiated with your suppliers? It's one of the best ways to reduce your costs and improve your profitability. Negotiation is something totally accepted in the professional world, even necessary. Here are 7 tips that we think are important to know before starting negotiations with your suppliers.
The first rule to keep in mind is that no matter how much business you represent for your supplier, if you are a problem customer, you may not get the best deal because it is too much work to do business with you. It is therefore essential to maintain a good relationship with your suppliers. To do so, make sure you pay your invoices on time, be transparent and consider this relationship as a partnership.
To get competitive prices, you need to talk to at least 3 suppliers and let them know that you have other proposals. Explain to them that you will choose the most competitive offer. Be careful to consider quality when making your decision.
You have to know what you need if you want to get the best deal. Note upfront the specifics of the products you want when dealing with suppliers. They may offer you other products that are not part of your requirements. If you know your specific needs, it will be easier for you to say no.
To renegotiate with one of your suppliers, nothing is more effective than to highlight the turnover you have reported over the year. Start by analyzing the total amount of orders placed with this supplier. You will then have a strong argument to negotiate different points of your contract. Melba allows you to quickly analyze and extract this information.
Spend time learning about a supplier's objectives to increase your mutual benefits in a deal. For example, if the supplier doesn't budge on price, focus instead on other areas, such as the down payment amount, a bulk purchase discount, and other points that can offer even more benefits to both parties.
The best information you can get about a supplier comes from their customers. Before you engage in any negotiation, you should always ask the supplier to provide a list of customers that you can reference for the type of product you want. Customers like to talk about the products they are satisfied with and most often they will share their prices with you.
It is often said that the person who wants something the least gets the most. This is often true when it comes to negotiations. Show your interest and make suppliers feel that the door is open, but if possible, show that you have other options if those negotiations fail.