When running a retail business or any other venture where you have to order in inventory frequently and keep all popular parts and products in stock, dealing with suppliers is one of the most crucial aspects of your firm’s financial wellbeing.
Having the right stock at the correct times makes the difference between landing enough sales and continually struggling to make ends meet.
It’s also necessary to focus on strategic sourcing, so you get the best deals possible and thus make enough profit to keep your business doors open over the long term. It’s vital to renegotiate terms every so often and stay on top of the contracts you have in place with suppliers. Read on for some tips for obtaining improved terms in 2022 to help your venture thrive.
Have Clear Goals
Firstly, you won’t be focused and effective if you don’t understand what outcomes you’re looking for in negotiations with suppliers before you chat with them about changing terms. It’s vital to stop and think about precisely what you want to achieve, so you know what to ask for. This understanding will also help you see where to push more for suppliers to meet you and where you’re less fussed about the results.
If you have a list of goals and put them in order of importance, you can let suppliers have some “wins” on the things that don’t mean as much to you, provided they capitulate on the one or two things at the top of your list that will have the most significant outcomes for you.
Work on Relationships
While business revolves very much around numbers and finance, it’s also just as much about relationships. Many aspects of trade depend on solid interactions with other humans, and renegotiating terms with suppliers is one of them.
Concentrate on the relationships you build with decision-makers and other key personnel if you want the companies you deal with to offer you lower prices, quicker shipping, faster delivery timeframes, access to new products ASAP, and other benefits. Get to know the people you deal with on a more personal level and take time to ask about how they are and what’s happening in their lives away from work.
Learn if people have children, hobbies they adore, trips they plan to take, and the like, and then ask about these factors later. Remembering pertinent details about people and showing them you pay attention and care will put you in good stead to be carefully considered when you ask for new deal terms.
Also, always pay supplier bills on time, so you’re known for being reliable in this manner. If you ever get caught out and need some extra time, let people know ASAP and discuss the matter with them rather than just ignoring an invoice and pretending it doesn’t matter if your payment is overdue.
Plus, be pleasant and professional in all dealings, including times when suppliers may let you down. How we react in adversity is just as crucial, or if not more so, than how we are towards people when everything is fine. Those we work with remember how we treat them when things don’t go to plan.
Invest Your Time Appropriately
With only so many hours in the day, though, you must carefully consider the best uses of your time. As such, invest your efforts most in the people you deal with more. You want excellent relationships with the suppliers you buy the most inventory from and rely the most on to satisfy your own clients.
Similarly, when it comes to how often you ask to negotiate terms and how long you spend working on new outcomes, it’s about the potential value you can get out of your time, too. It’s worth more to get a two percent discount from a company you spend $100,000 with every year than one you only spend $2,000 with, for instance.
Think About Ways You Can Help Suppliers
Negotiations are a two-way street so remember that your best outcomes will come from situations when you can offer your suppliers something and not just ask them for favors. For example, you might be able to get people to agree to free shipping for goods if you commit to paying for products upfront or by setting up shorter payment terms.
You may also be able to get a discount on item purchase costs if you buy more products from one company and thus give them more business throughout the year. You can try multiple techniques to “scratch the other person’s back,” so be creative and practical and see what might work in each different situation.
You may stress about asking for better terms and worry about potential conflict or other dramas when doing so. Yet, the reality is that most people understand that business owners are always looking to save money and won’t take your requests negatively.
Follow the above tips to make success more likely and help move negotiations along more quickly.