No business can survive without suppliers because no enterprise produces everything it needs. For instance, no firm can have its own water, buildings, electricity, all types of consultants, or any other necessary service for promoting production. This need for interdependence requires that you learn how best to negotiate with your suppliers. The reason is that the supplier is just as important as the customer even though many accepted myths suggest otherwise.
Maintain Quality Communication
Do you want to succeed when negotiating with your suppliers? Then maintain the highest levels of communication quality because effective communication lies at the heart of all negotiation processes. You need to establish this to enforce transparency since you will be creating an avenue for both of you to know each other’s needs and expectations. This way, you will also create room for trust since only effective communication will enable you to get all your cards on the table. Moreover, establishing open communicating helps both of you to understand how best to deal with each other and accommodate their expectations.
Find out Actual Prices
When dealing with suppliers, you should remember that their best price offer is always the highest with yours being the lowest. Since both of you are pulling in opposite directions, you should take pricing seriously. It is beneficial to face your suppliers with the actual figures at your fingertips. This means you have to research their competitors to know how much they are charging. This way, you will be in an advantageous position to face them with facts and put them to the task to justify their rates should they be higher than their competitors’ prices.
Establish Areas of Mutual Interest
To succeed in your negotiations, you have to establish the key areas of mutual interest. To do this, it is advantageous to take time and know your supplier’s goals to allow you increase the mutual benefits of the deal. For instance, if the supplier refuses to reduce the price to your level, you can focus on the other areas of the prospective deal such as warranty duration, required deposit, credit facilities and discounts for bulk purchases.
Know Their Motivation
Knowing your seller’s immediate motivation will also assist you in dealing with them advantageously. You have to know if they want to make a sale to meet a target or they seek to establish a bigger clientele. For instance, if they are interested in enlarging their market share, then they may not necessarily be focusing on profit maximization. This means it will be easier to get better prices because they will be looking for economies of scale resulting from more long-term clients.
Always Have Alternatives
As a wise customer, always approach your vendors with alternatives on hand. Also, inform the vendor that you have other competing firms offering the same services and products, and hence, you will choose the supplier who offers the best value for your money. This way, you will have bargaining power since the supplier will negotiate with you knowing that they are not a monopoly.
Let Your Feet do the Talking
As a skilled negotiator, you should know that some negotiations fail, creating the need to “let your feet do the talking.” If your mouth will not convince the supplier to yield to reasonable concessions, then you should not fear walking out peacefully but without burning bridges. This way, the seller will see that you are not desperate and respond by revising their previous terms.
Identify Your Objectives
Lastly, negotiate with your suppliers with defined objectives. You have to determine the factors you find beneficial to you. For instance, if you want to make bulk orders, then negotiating for discounts would be an ideal point of focus. If you are purchasing complicated tech devices, then training should be a critical part of the deal.
There you are with all the insights that enable you to negotiate with suppliers successfully. With all these tips on hand, you have every reason to get the best from your negotiations.