If you’re a business owner, goods and services likely account for a large portion of your expenses. For this reason, it is imperative that during a business negotiation with your vendors that you bargain well when it comes to terms.
Any reduction in costs translates into higher profits for you, so it can definitely be worth your time to try and negotiate better deals with current and prospective suppliers. Be careful however not to ask for too much; you don’t want to end up putting your relationship with a valued supplier at risk. The key when entering a business negotiation is not to accept a supplier’s first offer, even if it’s a good one. You may find yourself paying more down the line because you’ve presented yourself as someone who easily accepts their terms, and a supplier will remember that. Ask if you can get a discount on your goods or services because you’re a new customer, a loyal customer or a repeat customer. The worst a supplier can do is say no, and there is the possibility that they’ll offer at least a small discount which can add up in the long run. Another good tactic is to demonstrate your value as a client and your potential for growth. If you’re a smaller business, it’s easy to feel insignificant in the negotiation process. Nevertheless, when it comes to buying, you can negotiate as if you’re a larger company because, after all, you may very well be one in the future. Make a point to show that you are indeed a valuable customer; one who is easy to work with, who pays promptly, and has good growth prospects.
Another area that may be negotiable is terms. For example, if your credit terms are normally 30 days, what would be the payoff for you if you’re able to provide full or partial payment with your order, or would it be beneficial to you if you were able to negotiate 60-day credit terms.
In the end, price should never be the only deciding factor in a business negotiation. Consider what other things a supplier might be able to do for you, such as holding stock for quicker deliveries, providing extended payment terms, or offering to lower delivery charges if you agree to a broader delivery time frame. They may even be able to add value for your customers with offers like promotional giveaways or extended warranties.