What's your Problem?

How do I negotiate my suppliers' prices down?

by Jeremy Bullmore

Q: I'm in the unpleasant position of needing to negotiate down the costs of my suppliers. I have a small company and longstanding, friendly relationships with them all, often meeting them in the local pub. I am dreading doing this but necessity dictates. How can I do this without causing too much pain?

A: How much simpler it must be for those in charge of vast, remote companies whose main contact with suppliers is through formal contracts and the impersonal payment of invoices. Do you remember the Ferris wheel scene in The Third Man? When human beings are reduced to anonymous specks, far, far away, it becomes a great deal easier to come to terms with hurting them.

It's far too late to advise you never to let supplier relationships develop into social ones - and I'm not even sure that would be good advice, anyway. The worst thing you could do is funk it and just send them letters out of the blue, as if you'd never had a pint together, with the new terms set in stone: 'Kindly sign below to signify your acceptance and return at your earliest convenience.'

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