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6 Ways to Negotiate Better Prices from Vendors

July 8, 2012

Every business owner wants to get better prices from their vendors, but few even realize that this is possible. They receive their invoice every month or week and pay the balance religiously. But there are plenty of suppliers out there, so why shouldn’t you get a better price? Here are six ways you can angle for a better deal from a supplier you already like doing business with:

  1. Just ask for it. You’ll never get anything if you don’t ask. If you’ve been with the vendor for a long time, they may ask you why you’re looking for a better price, and if they do, there are probably numerous reasons you can come up with. When you are asking for a discount though, remember that you’ve got to be realistic about what you want. You’ll face your supplier representative walking away if your offer is too ridiculous.
  2. Show off the potential of your business. Many small business owners don’t even realize that larger suppliers follow the 80/20 rule. They get about 80 percent of their business from just 20 percent of their clients. This means that if you can show them that your business has a great potential for speedy growth, then you are more likely to become a larger account for them. Just be professional with the representative you work with, pay your bill quickly and become the type of customer they love to do business with.
  3. Get ready before you ask. It is very important that you prepare for that next meeting with your supplier’s representative. You should have a good idea about exactly what you want and whether it is a reasonable expectation. Look at the prices they charge you currently and see what you need in terms of better pricing. Also spend some time doing some calculations to see how much you will really benefit from these better prices and whether there are any situations which might make it easier or better for you to deal with their higher prices.
  4. Find out if the grass is really greener somewhere else. There are plenty of suppliers you can do business with, and in some cases you may find a better supplier than the one you currently have. Even if they don’t offer you exactly the same products or services, they may have a substitute that is just as good as or even better than what you currently have.
  5. Advertise the competition. When you do meet with your supplier’s representative, let him or her know that you have checked out the competition and you know what’s out there. If you’ve been offered a better deal, don’t be afraid to let the person know that. Then just tell them that you want to give them the opportunity to do better because you have already been doing business with them for some time.
  6. Look for value added benefits. Sometimes you might not be able to get lower prices out of your suppliers, but you may be able to get something else that will make your life a lot simpler. For example, they may be willing to hold stock for you so that you can get rapid delivery or let you extend your payment terms on them.

Of course at the end of the day, there is much more to choosing the right vendor than getting the best price. Level of service, delivery, and knowledgeable staff are also important components to consider, so be sure to look at the entire picture when deciding whether to continue with your current supplier or to look elsewhere.

Looking for more business advice? Let the experts at Acceler8 help you make smart decisions about your business. Click here to sign up for a free consultation.

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