What if you\u00a0![\"Handshake\"](\"http:\/\/blog.123print.com\/blog\/wp-content\/uploads\/2015\/02\/Hand-Shake-150x150.png\")
just received an email advising you that your costs are being increased on one of your best-selling items? You might sit back in your chair and think, \u201cwow, we were just starting to make real profit there.\u201d But not wanting to rock the boat, you shrug it off, update your files and start drafting the memo to affected personnel. Your mind is focused on thinking of other ways to save money.<\/p>\n
1, 2, 3, Stop! You have options and most suppliers will take the time to hear your side of the story. Here\u00a0are\u00a0a few negotiation tactics that will serve you well for today\u2019s example and others that pop up in the future.<\/p>\n
Tip #1 – Get the Facts<\/strong><\/p>\n Before you attempt to negotiate with the supplier, pull together all of your\u00a0historical data. It will be beneficial to know how many sales you had or how much inventory you used over the course of the last six to\u00a0twelve months. When\u00a0you can identify your past and current sales trends by month, you have critical information to\u00a0support your position.<\/p>\n Tip #2 – Look at Other Suppliers<\/strong><\/p>\n Get at least two other comparable quotes so that you can see if arguing your case is worth the effort. Perhaps you were getting the deal of the century, but did not realize it. Nevertheless be prepared to speak to what the competition is offering you.<\/p>\n Tip #3 \u2013 Price is Not Everything<\/strong><\/p>\n As I mentioned in my\u00a0\u201cUnderstanding your COGS\u201d\u00a0blog last week, there are other ways to trim your \u201ccost of goods.\u201d A few areas where\u00a0you can easily negotiate\u00a0include: use different raw materials, buy higher volumes or accept longer delivery times. Know your bottom and top prices and work from there.<\/p>\n Tip #4 \u2013 Know What Your Supplier Needs<\/strong><\/p>\n Most suppliers are not just going to give you up as a customer, especially if you have a long tenure with them and have a good paying history. Don\u2019t be afraid to just ask the question, \u201cWhy are you raising my prices?\u201d If the supplier is raising pricing because volumes have dropped, negotiate a rebate program if you can meet or exceed their volume demands. If they need to hire extra labor to meet your production dates, look at expanding your delivery times during non-peak times in your business.<\/p>\n Tip #5 \u2013 Barter Your Way to a Win<\/strong><\/p>\n Do you remember the old fashioned way of bartering?\u00a0You might\u00a0be surprised at how well this technique still works in today\u2019s business world. Offer to run a special targeted sale of the supplier\u2019s product in exchange for discounted rates for a set period of time. Ask if they will share in advertising costs to promote the product in another marketing channel.<\/p>\n My\u00a0best advice? Don\u2019t give up so easily, and just ask for what you want.<\/p>\n If you get the opportunity to take a negotiating class, please do so. It is well worth the cost, and will pay for itself over and over in both your business and personal endeavors.<\/p>\n