Why should you pay full price for the supplies you use in your business? In our personal lives, we’re always looking for discounts, offers and special deals – so why not apply the same principles to your business? By doing a bit of well-researched product sourcing and confident negotiating, you could save a considerable amount of money across your financial year.
Why negotiate?
There are several reasons why it’s worth negotiating with existing or potential suppliers:
- Reduced costs – this is the most obvious win for your business. Negotiation can help you reduce not just one-off costs, but annual and contract costs too, helping you to reduce your overheads and improve margins.
- Extra benefits – part of negotiation is seeing what else you can get as part of the deal. So you may start off just talking about the overall cost, but once you are near an agreement, it’s worth seeing what extra benefits you can get in order to seal the deal. This could be anything from an extended warranty on your company cars to remote servicing for your office equipment.
- Get better results – focus more on what you’re getting long-term for your money than the short-term delivery. Professional sourcing and procurement companies understand that what really benefits the business is better performance and better results. So instead of negotiating a lower price for one piece of equipment, negotiate for a better model or an enhanced service. Anyone can buy ‘goods’ – you want to buy performance.
Negotiating tactics
This is a necessary skill for any business owner – and it is a learned skill, unless you are lucky enough to be a natural. It’s because it’s a specialist task that many businesses choose to outsource procurement to a dedicated sourcing service, or decide they need a virtual assistant or someone similar with the right experience. This can save time as well as money – a good negotiator will take less time to come up with the right result. Here are some simple tactics to get you started:
- Know your supplier – make sure you have researched both your supplier and the competition. The more you know, the easier it is to negotiate. We’ve all spoken to car insurance companies after doing a quick dummy quote to see what other offers are on the market – your business is no different. Understand what the prices are and what you get for those prices from a variety of suppliers and use it to influence your negotiations.
- Don’t agree too soon – unless you are absolutely desperate for something, you can afford to take your time with supplier negotiations. Build a relationship, make sure they have plenty of opportunity to put together a good package for you at a good price and don’t ever tell them what you’re willing to pay. By agreeing to a price too soon, you could be spending money needlessly.
- Ask for introductions – when you are trying to source suppliers for your business, it can help to have an introduction or referral from another customer. This might open the way immediately for discount negotiations and it sets you up as a known entity. The supplier might have a referral deal to offer and you can start your negotiations from there.
- Be prepared to walk away – this is a must in any negotiation, whether you’re handling it yourself or hire a virtual employee or procurement adviser to help. All your potential suppliers have competitors and they will not want to lose a sale. That means they will be prepared to talk seriously to you about price and packages in order to turn you into a customer – particularly if they think you’re considering going elsewhere.
Depending on the size of your business, you can do this supplier negotiation yourself, or outsource procurement to dedicated product sourcing companies, or a specialist assistant who can handle your office supply management for you. However you choose to proceed, strong negotiation tactics and a constant eye on getting great value will not only help with your supplies and product sourcing – it will help you make a real difference to your bottom line.
If you’re short on time or need help with negotiating the cost of your office supplies, feel free to call us on 0800 994 9016 or use our contact form in the menu above.