If you’re looking to save money on the products and services you purchase for your business in Canada, you need to start negotiating with suppliers. Many business owners are afraid to negotiate or don’t know how to go about it. In this article, we will discuss ten tips for successful supplier negotiations. With these tips, you’ll be able to get the best deals possible on the products and services your business needs!
10 Tips for Successful Supplier Negotiations
Before we get into it, in summary, here are 10 great ways to be successful at negotiations:
- Understand what is most important for your business
- Understand what is essential for your supplier’s business
- Bring Solid Communication
- Build Rapport
- Focus on mutual benefits
- Research Costs
- Speak to References
- Stay Organized
- Get a deal, don’t grind
- Pay your Suppliers on Time
1. Understand what is most important for your business
A grasp of your business goals is necessary for building your negotiations. This allows you to go into talks and create the best case for yourself and your business. For example, are you looking for the highest quality? Or are you looking for the best price? You may be looking for a blend of both of those things.
Having a handle on what means the most to your business will frame up your negotiations to get what you want.
2. Understand what is most important for your supplier’s business
Understanding what the business goals are for your supplier is equally important. What kind of customer does your supplier target? Does your business profile match who your supplier usually does business with? Is your supplier willing to do business with anyone, or are they selective with whom they will engage?
Knowing your supplier is one of the important things when it comes to successful negotiations and allows you to position yourself with confidence.
3. Bring solid communication
Communication is critical for successful supplier negotiations. It is so easy to forget that we need to do a great job at communication. This means being transparent about when you would like to buy, what she would like to buy, and your expectations. Being easy to deal with makes the process easy for both buyer and seller. Excellent communication can also mean consistent communication on a single, easy-to-track platform. A great supplier management software will keep outstanding communication records between you and the seller. In Canada, it’s pretty standard for most communication to be digital.
4. Build Rapport
It is so essential to build a relationship with your supplier. Customers who have a relationship with their suppliers will be more successful with negotiations. Suppliers will treat their customers who are easy to deal with or have a relationship with better than once they don’t. In Canada, it’s common to make relationship-building a standard practice done throughout business.
5. Focus on Mutual Benefits
During negotiations, both parties must come away feeling like they are gaining something. It is so essential to structure your negotiation with mutual benefit in mind. Having the right mindset will ensure both parties will agree to make a deal.
6. Research Costs
Know the market for what you are buying. Especially in Canada, depending on the industry, costs may be readily available. Other times, there may not be a lot of information that is readily available about costs.
When not a lot of information is available, do the best research by getting information from multiple sources and coming to the closest average you can. It’s common for commodity costing to be readily available and sometimes other types not available.
Your supplier management software should be where you keep any record of historical costs, if available, which may help inform what costs are today.
7. Speak to References
Talking to references is a great way to understand your supplier. References will give you a sense of what the supplier is like to deal with and may provide insight into how best to deal with them.
An excellent reference will allow you to understand how the supplier views their clients and may give insight into how receptive the supplier will be to engaging in negotiations.
8. Stay Organized
Staying organized is vital during negotiations. You will maintain credibility with the sellers if you appear organized and consistent. The best supplier management software will keep multiple components of negotiations organized and available to access, including supplier contact information and historical transaction information.
9. Get a Deal, don’t grind
It is essential to go into negotiations to get the best deal possible. That said, it’s critical to understand that both you and your supplier must come away with a win. Don’t grind your supplier; approach it with the right amount of knowledge that you both must get something out of the deal. In the short term, a supplier may agree to a meager price to get your business; however, over the long term, if you gain a reputation of being hard to deal with, suppliers may choose not to do business with you because of it.
10. Pay Your Suppliers on Time
To remain accessible to do business with, you must pay your bills on time. After working through challenging negotiations with you, your seller will quickly not want to do business with you if you end up not paying your invoices within the agreed-to terms.
One of the easy ways to keep on top of your supplier terms is a supplier management software solution. These will keep your supplier payment terms documented and easy to follow.
Between working together and partnering on significant negotiations, you can secure an excellent price for your business on whatever goods you are trying to buy. Keeping track of negotiations and staying organized and on top of negotiations will help you be successful. A digital procurement solution is one of the best ways to keep track of negotiations. Tradogram is a cloud-based procurement platform that does a fantastic job of keeping you organized on and on top of negotiating.