If your business adds value to a product, you will have people in other businesses who supply you with goods or services.
To ensure you set up your business to profit, you want to achieve the best price for what you buy. This is where your negotiation skills come in. Here are 6 tips that may help you negotiate better.
1. Research the market
What does this product or service retail for, as a wholesale price will be better than this.
2. Walk in with a goal in mind
Know your business, know how much profit you want to make and know what you retail for.
3. Let your supplier do the talking
See if they share how they currently price their product or service. When negotiating, you want the other person to put the first number on the table. This is called an ‘anchor’ and you can generally negotiate down from this point.
4. Share how doing business with you creates more value than just the current sale
If you will talk about your relationship with them on social media, share this with your supplier. If you will feature their brand in your store or on your website, tell them. You might be surprised how much other businesses value positive word of mouth and may factor this into a better price for you.
5. Know when to walk away
If their price is too high for your business and they will not budge, then walk away and invest your energy in finding a better match for your business.
6. Be prepared to pay on the spot
This is very important to build trust in the relationship. Just like you, your suppliers want to work with people who they can trust and people who pay on time. Plus, this also puts all your negotiation effort on paper, as you now have a baseline with them for future pricing. You can even ask your supplier whether they give a discount for early payment.
Things you should know
This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering the finance options for your business.