Question: What is one tip for negotiating with a vendor who will provide a key service to my new business?
Tell Them What You Need
“One thing I do after research is always tell them exactly what I need from the service. Make it crystal clear that everything other than “X” is a bonus. I have always found that it’s a great starting point for pricing, and you get a great response from the sales representative.”
Let Them Make the First Move
“Let them go first when giving you a quote. This way you see where they stand and don’t make the mistake of accidentally up-selling yourself without realizing it.”
Tell Them Your Story
“By telling the vendor why you’re in the business and building that personal relationship you’re much more likely to get a friendly quote than if you’re just another email in their inbox. Do everything you can to meet them or chat with them on the phone before asking for a quote.”
Ask for Help
“The old saying “it never hurts to ask” is true! Whether you’ve “made it” or are a startup on a shoestring budget, get over your pride and ask your vendor if they can help on cost. Assure them you want to do business for the long haul and build a relationship.”
Make It Easy for Them
“If you’re convinced that the vendor is one you want to work, you’ll likely get better rates and service by doing everything you can to facilitate the business relationship. For instance, offer to pay immediately on receipt of services or product instead of net-30, and offer to sign a long-term contract in exchange for a discount.”
Have a Backup Vendor
“Have a backup, even if they are a second or third tier choice vendor. Knowing you have a backup can give you more courage when negotiating. Be knowledgable about both the preferred vendor and the backup. That way, they know you are serious about them, that they have competitors and you are not desperate to use their service.”
Be Aggressive
“Be aggressive and confident. Whether it is a minimum order amount or price per unit of goods, you must get the best deal that works for you. There is growing competition in almost any field, so if you position yourself and your company as a source for a valuable business relationship, any vendor will be willing to do business with you — especially if they know you have a choice to go elsewhere.”
