In: ecommerce28 May 2010
Ordering your first stock can be a nerve-racking experience. When I spoke to my first supplier I had no experience in this field and would have killed for some advice.
Now I’ve got more experience and have negotiated my fare share of deals, I wanted to pass on the tips, tricks and tactics I use when negotiating.
I recommend considering the following:
It’s important to do a little research on the company before you buy from the. This doesn’t have to take ages. Do a search on Google for their business. Check out their website. If their local, ask around and see if their a reputable business.
Just as important as who are they is who are they compete with. Its important to do some research on how saturated their market is. If their field is full of competitors, they will be more likely to work for your business and offer a reduced price.
If they have a virtual monopoly on their industry it will be much harder, if not impossible to get a reduced price. There is no incentive for them to negotiate.
Before you start contacting suppliers, work out your budget and stick to it. Consider factors such as how many units you have forecast to sell and at what price you will make a profit.
The tendency to order more units to get a better price can be strong. Just remember you need to be able to sell them on at a profit. If your website is new, you may not be getting the visitor traffic needed to make that happen. In short, be cautious!
See my post How much stock should I buy for my new online store? for more information.
The first time I negotiated an order I was young, terrified and very excitable. The supplier picked up on all of these. If I had been a little calmer and more composed I may have gotten a better deal.
Before you make the call, or walk into the meeting, do some breathing exercises or think about something completely different to take your mind away for a second.
When your in the situation, if you get caught on a question, just take a deep breath and carry on. Remember the supplier is as human as you, well almost!
Its important to keep talking. Ask them questions about their business. Get an idea of how busy and successful they are. Be prepared for suppliers to do the same. They want to find out if you will be a good partner to work with. They will ask questions such as how many units you were looking for? Will it be a regular order? What kind of payment terms were you looking for?
A good tactic is to ask them the questions back. For instance, if they ask “How many units were you looking for?” You could answer with “100″ and nothing more. That in itself doesn’t give the buyer any prompt to offer a reduction in price.
Talk yourself up! Why not say “I was planning on 100 units to begin with, but at what level would you offer a discount?”
See how much better that is? You are keeping the conversation going, implying that you may order more and prompting the supplier to think about discounting.
Simply, don’t be afraid to ask for a discount. Suppliers are expecting it! Here are a few of the common reasons you can use to request a discount:
I remember I got a friend over to play the supplier and we went through a few scenarios. This might help you if your a little nervous.
Depending on the type of business you are running, you could consider making a trade in return for a discount on the goods. This better applies to companies that offer a service, but its worth a consideration.
The key is to build a relationship with your suppliers. If you have a good rapport with them they are more likely to offer you a better deal.
Also, if it gets to the stage where your business is one of their biggest contacts, remember they are effectively working for you!
If this is the case, make sure they never forget the following!
What do you think of my advice? Let me know your tips for negotiating!
My aim is to share online business ideas and insights to help you suceed online.