Supplier negotiations, as you may have discovered already, can be tough. When the supplier you’re buying from has been able to out-do the competition by grinding down their costs and implementing the latest tech, it may seem like you’re bound to them. However, there’s always a little wiggling room for B2B customers to negotiate on price, and you should be using this to make sure you’re getting the best deal possible. Here are a few tips for doing this.
Present Your Business as a High-Value Customer
Before you even start your next round of negotiations, take some time to consider how you can convince your supplier of the importance of selling to you. Through this, you could end up forging a partnership with substantial benefits for both parties. For example, you could highlight the fact that your business would be a long-term repeat customer, and outline exactly how much money they could make by reaching an agreement on price. It can also make negotiations a lot easier if you dangle some kind of new business opportunity in front of them. For example, if you’re running a B2C ecommerce store, you could pledge to market one of their new products to a niche that they haven’t touched before. Also, if you find a way to set out a contract agreement which lowers their overall price risk, it puts you in a much better position to ask for discounts.
Change Your Usual Ordering Habits
If you’re currently operating under a buying policy where your deliveries are scattered over a longer period of time, then change it by grouping more of your orders together into fewer, larger purchases. For example, if all the departments in your business currently make individual orders, set out a new policy requiring them to be grouped in an order that’s large enough to get a bulk discount. Yes, there’ll be less logistical hassle if you carry on buying stock as and when your business needs it. However, if you’re able to group orders like this, you’ll stand to save a lot more money in the long run. If there are any kind of crossovers between your suppliers in terms of stock, consider dropping the product from one and starting to buy the same thing from another. This will give you more frequent access to bulk orders. Sometimes, changing your ordering habits to save money on purchases means changing your processes, like subbing out expensive 3D printing for custom injection molding, for example.
Think of Other Areas
Sometimes, your supplier is going to be simply unable or unwilling to negotiate on their product pricing. In these cases, the best advice I can offer is to look for other areas where they will negotiate. Reduced shipping costs, or simply a more efficient shipping process could be tempting for them, as this usually has benefits on both sides of the table. Reduced down payments are also a pretty soft target. Aside from that, you could see if your supplier will give you an extended payment deadline, longer warranty, or other little changes which could improve your profit margins.