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How to negotiate effectively with a supplier

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  • Posts: 58
  • Joined: 27 Oct 16
  • Karma:
13 Dec 16 05:40:04 am
Getting the right suppliers is the make or break of your budding business. As new online sellers, it is important to end up with reliable and trustworthy suppliers giving good value for one's initial investment. Novices would be clueless on what goes on in a negotiation with a supplier or even the first point of contact with them. Try to read through the tips and be sure to practice them for you to negotiate effectively with your prospect supplier.

Tip #1. Establish relationship

In every type of dealings, establishing and maintaining a good relationship would always make things work. Find the supplier's contact details and contact them right away. Contact a supplier by phone first - that way you can get gauge how responsive they are as well as get the feel of how their system works. Try to maintain an open line of communication to build up camaraderie. Always ask for the same person you've spoken initially and better yet - get their direct phone line or contact detail so you won't go the long way to reach them.

Tip #2. Present yourself

Not only are your suppliers selling their products to you but you should also sell your business to them. Make sure they are convinced that you will give them repeat sales so a description of your current market and business would be needed. If you are still starting up then present your business plan and your sales target and projections.

Tip #3. Quote at least 2 more suppliers

When you negotiate, make sure you have quotes on at least 2 other suppliers who offer similar products. Let them know that they are not the only supplier you have contacted so they will loosen up when it comes to negotiating terms especially price. It would not hurt as well to tell them that you have a pending better deal with another supplier just so they will try to bring in a better deal for you. Just be cautious not to drive them away when doing this.

Tip #4. Bargain on price

Ask for a price on a certain quantity of order then work your way downwards till you meet the price you can afford. i.e. Ask how much they can offer if you order 50pcs. If they give you a reasonable price then try to negotiate if they can give it at a slightly higher price at a lower order quantity. You can play this question to determine their level of pricing and how they price their items. It takes patience though so keep practicing this!

Tip #5. Challenge their authority

This is tricky since your supplier might retreat but you can always try this pleasantly. Challenge your contact person if they are authorized or have the authority to approve the deal you want. If done right, this would actually challenge their capacity in the company and chances are they would do something to meet the challenge.

Happy Negotiating everyone! When all else fail, you can smile and find another supplier to contact. Remember, it is just a numbers game. The more you contact, the higher your chances of meeting the right supplier for you! :) Feel free to add more tips, too!


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