Have you ever found yourself at the bargaining table, but ended up with a deal you weren’t happy with? Here are eight keys to ensure you walk out with a win-win situation in every negotiation.
1. Do your research
It is important to be aware of the cost it takes to produce the product you are wanting to buy. By knowing the cost of the production and the prices which other suppliers are selling the item at, you will know how much wiggle room your supplier has to give you the best offer.
2. Know what you are willing to compromise
It is important to set out your objectives about your expectations on the following items before you go into a negotiation:
- value for money
- delivery terms
- payment terms
- after-sales service and maintenance arrangements
- lifetime costs of a product or service, and
- whether or not the product or service is essential to your business.
When you have created a list of your expectations for each item you will know which things you would be willing to compromise on to get the best deal.
3. Build a good rapport
Think of negotiating as going into a partnership with your supplier where you will both benefit from a good agreement. If you are negotiating too hard and trap your supplier in a corner where they give in to your every request, they may consider you a problem customer and not offer the best service to you. This can harm your business in that when you need help to get out of a bind your supplier may be less likely to assist you.
4. Sell yourself as their biggest customer
By letting your supplier know that you will be offering them repeat business over the long term, they will be more keen to negotiate with you. If you are a new start-up, show them a reasonable sales projection so that the supplier will see how much you will potentially purchase from them. If you have a track record of your sales, then you can use this in your negotiating arsenal.
5. Do not take the first offer
It is important to get different quotes from different suppliers so that you can ensure you get the best price. By letting your suppliers know you are shopping around for the best deal, you will invite competitive pricing.
6. Price is not everything
If your supplier will not budge on the price of the product, you can always negotiate on delivery speed or a discount for bulk purchases. You could also negotiate payment terms which would assist you with your cash flow.
7. Pay big deposits when possible
Suppliers, like any other business, are always concerned about how quickly they will be paid. If you can offer your supplier a 50-75% deposit for the product you wish to purchase, you could get some benefits in return.
8. Get everything in writing
After a negotiation, it is important to put everything that was agreed on into a written agreement which both parties will sign. Make sure a business lawyer reviews your agreement before you sign it to ensure that everything is in order.
Negotiations may be tough but by following these eight keys you will be well on your way to a great deal. Remember that if the deal does not suit you, you can walk away from it.
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