Do it right: Seven ways to negotiate with suppliers

Sruggling to get what you need without ruining your supplier relationships? Help is at hand...

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Last Updated: 19 Oct 2010

Do what you must. The big supermarkets may attract vitriol for squeezing dairy farmers by the udders, but in a sink-or-swim predicament, you have no choice but to cut costs. Just be open with suppliers about your reasons.

Give them time. Write in advance to prepare them for a fall in income. They may be struggling too and will need a plan B.

Communicate properly. Talk it through as real people. Business is all about relationships, and you'll need these contacts when things pick up again. Genuine sympathy will help you hold on to those treasured relationships.

Stick to what you can afford. Being open to negotiation may seem more humane, but it will be easier on everyone if you do your sums and set out your stall from the start. Make it clear that you won't budge.

Stay cool. The stakes may be higher now, but stick with your approach. A downturn is the worst time to panic yourself into a poor decision.

Bargain on something other than price. If you can't get prices as low as you'd like, can you find other points of leeway? Delivery times, payment terms or the size of the order can help you strike a happy medium.

Have an alternative. What will you do if they've got no room to move either? You can accept it and cut your own costs elsewhere, or find another supplier. Downturns make conflicting interests even harder to juggle - so make your back-up plan as clear as any.

Tags:
Strategy

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