If you own a business, you may be concentrated mainly on your customers. In order to make a profit, of course, you have to be able to attract and keep customers spending. However, this laser focus on customers could be preventing you from cutting costs and saving money, which is another way to increase income.
All businesses need supplies and in order to keep running costs down it’s important that they seek out a steady and reliable supplier who is willing to offer a competitive price on the goods being ordered.
Many people feel uncomfortable trying to negotiate or drive a price down from a supplier. The majority of small business owners simply accept the price their supplier charges and adjusts their own budget accordingly. They may believe that the supplier will not go down on their prices, or they may simply be too nervous to attempt negotiating.
Do not be afraid of negotiating with your suppliers! This is truly one of the best ways to cut costs and increase your overall income. Follow these tips to getting the best deals possible from any supplier you work with.
1. Research Their Competitors
This is a very important step, and should never be skipped if you are intent on negotiating a better deal. If you try to convince your supplier to sell you ink cartridges for a pound a piece, they are going to laugh in your face and walk off. First of all, find out what others are charging for the same products you buy. For products that come in many varieties, make sure you are comparing the exact same products. Compare your whole basket of goods over a period of time and not just a couple of items!
Once you know what the going price is for a number of items, compare that number to the price your supplier is currently charging. If you can buy your cartridges elsewhere for cheaper, tell your favourite supplier this outright. You are their customer, and they want to keep you, so they will attempt to do whatever they can to retain you. This is the same concept you apply in your business to your customers I would think?!
2. Don’t Be Too Eager To Agree
While you don’t want to get a reputation as being extremely hard to please, you also do not want to earn a reputation as being gullible, or easily taken in. When you have asked for a discount from a supplier, and they counteroffer, do not agree with their first offer, even if it is what you expected, or better. Continue to negotiate until you feel like you have gotten the price exactly where you want it. This is what people do every time they buy a car, and negotiating with your supplier is really no different than negotiating with a car salesman.
3. You Will Never Receive Anything Without Asking
Above all, do not be afraid to ask. Remember, the worst possible thing they can do to you is refuse your offer. Even if they do, ask again. Not necessarily that same day, but sometimes on the fifth or sixth try, the supplier will relent and give you what you are asking for. Never be afraid to ask, because without asking, it is a certainty that you will not receive a discount.
4. Consider Other Ways To Lower Costs
Your supplier may be able to give you a discount if you change the frequency of deliveries or the time of the deliveries. Don’t do this if it doesn’t make sense for your business, though. There is no need to get twenty new ink cartridges delivered every week if you are only using five a week. Negotiate an amount and frequency that works for both of you. If there are other companies in your area that order from the same supplier, see if you can have your order arranged at the same time and split the delivery cost.
5. Threaten To Leave
If you have tried all these tips and your supplier will not budge, tell them you will no longer do business with them. If you do tell them this, however, make sure you follow through or they will see you as a weak and inconsistent buyer. If you have discovered a new supplier who offers better prices, and your current supplier will not budge, then it makes sense to switch suppliers anyway. However, sometimes it pays to try to negotiate with your initial supplier first, as they may give you an even better deal in order to retain your business.
By following these five simple tips, you can really make a difference in your monthly budget. Decreased cost equals increased income, so give these tips a try and see how you do. Leave a comment and let us know how you negotiate with your suppliers.
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