Let’s face it, virtually every day in business we are called to negotiate. Whether it’s convincing a new customer to buy or working on a deal with a supplier, negotiation often plays a central role in your success. With the impact that negotiations can have, entrepreneurs should prioritize negotiation training as a way to enhance their negotiation skills.
Sound negotiation skills are often vital when working with vendors in the eCommerce business. As you may notice, contract negotiation with suppliers is not only about price. Vendor contract negotiation is an elaborate process that requires you to turn stones to unearth benefits that scale beyond lower prices.
Vendors can help you track your competitors, improve product designs, evaluate potential new products, and find promising opportunities. However, to get these benefits, you should be on top of your negotiation game. As negotiation experts suggest, taking vendor contract negotiation training can unlock your potential, no matter how competitive your niche.
This article sets out to help you to find and forge profitable relationships with vendors. The following tips are designed to help you get the best outcomes in your future vendor contract negotiations:
Before you make a move, complete basic background research. Conduct in-depth research and create a preliminary list of potential suppliers.
Find out as many details as you can about each of your potential vendors. Some of the most important details to know about your potential vendor include:
- The types of products vendors offer
- The contract’s shipping policies
- The minimum order amount
- Payment terms
Having suppliers’ information at your fingertips helps you choose vendors who are more likely to meet your business needs. Negotiation classes accentuate the importance of proper research, as this information helps you make informed choices when selecting your vendors. You should also know the qualities of products in your industry.
Look around and find the lowest and the highest prices of the product you want to buy. Conducting research enhances your knowledge about the industry together with your credibility.
Determine Your Benefits
What is your target benefit? Is your target benefit a lower price, better payment terms, upgraded shipping, higher quality, more comprehensive services or reliable delivery schedules? You should set your eyes on the specific benefits you are looking for from your vendors.
Knowing what you want from your contract helps you make more reasonable demands that the vendor can meet more often. Also, having a target benefit in mind simplifies the negotiation process.
Create a Negotiation Strategy
Putting your priorities in writing is often essential. A sound negotiation strategy should define your goals and specify where to draw the line and withdraw from the deal. Vendor contract negotiation training urges buyers to plan ahead to anticipate offers that buyers might make.
Evaluate possible outcomes and know how to negate the vendor’s possible objections. Complete your strategy by creating a list of your negotiating strengths. Leverage your negotiating strengths to get the contract that best serves your business.
In addition, understand your weaknesses and develop methods to minimize or compensate your negotiating weaknesses to win the concessions you want. Often, the criteria used to choose vendors includes vendor capability that reduces or minimises the buyer’s weaknesses.
Sometimes, negotiating with overseas vendors isn’t easy. When you are negotiating with suppliers overseas, plan ahead to overcome communication challenges posed by those vendors who don’t speak English as their first language. If your potential supplier doesn’t speak English well, you must find a way to express your ideas without being overly complex.
If the supplier only understands basic English, keep your language simple. Also, you can learn a few words and phrases in the supplier’s native language to help boost your credibility, being liked and your chances of communicating clearly.
Remember, maximising contractual value usually requires effective communication. You don’t want to force the vendor to use translation apps to figure out what you are trying to say. Find a respectful balance between your level of communication and the supplier’s understanding to help ensure that the message is clear and concise.
Articulate words confidently and strategically, while putting your listening skills to the task. Listening is often overlooked during vendor contract negotiation, but listening is an invaluable skill, and the importance of listening is highlighted during vendor contract negotiations training.
Negotiate with the Right People
Avoid wasting your time asking for a benefit from junior staff. If the account manager you are negotiation with is not the decision maker, then they have no authority to offer any benefit. Understand the management hierarchy of your vendor and target the most senior decision makers. It’s always better to be referred down than to work your way upwards through the chain of command.
Aim at Long-Term Gains
Many vendors in the eCommerce industry prefer working with sellers that provide opportunities for long-term business. As suppliers often prefer long-term business, if you are placing a one-time order, you are unlikely to receive a discount.
To boost your chances of getting a benefit from a vendor, emphasise how you want to forge a long-term relationship. Ask the supplier about the additional benefits they offer to long-term customers. Engage the vendor intelligently and help the supplier understand the value you can provide in the long run.
Angle your business strategically and give the supplier a reason to believe you are the customer of choice. By instilling confidence in the supplier, they are more likely to offer you benefits that tie both of your businesses together beyond the letters in your contract.
Often, shopping around can be done during the research process. Shopping around means exploring the available options to find the best vendors for your needs.
Issue an RFx to get bids from potential suppliers and compare quotes. Even if you have an ideal supplier in mind, get bids from other available suppliers, too.
By getting bids from multiple vendors, you are able to better leverage additional benefits from the preferred supplier. For instance, you can ask your ideal supplier to match a discount or service offered by their competitor. Examining multiple options can help you achieve significant savings or a contract that provides your organisation with measurably more value.
Milena Gallo is a marketing advisor by day, do-gooder by night. She has led teams to great success through effective digital marketing campaigns that connect new audiences with important information and opportunities for skill-building. She excels at crafting attention-grabbing messaging and has a clear strategic vision. She is also passionate about human rights and has used her marketing skills for the causes she believes in, organizing effective awareness-building campaigns on worldwide access to clean water.