7 Priceless Tips To Use When Negotiating Prices with Vendors

Do you have to strike a deal with a vendor but aren’t confident in your negotiation skills? It can be intimidating but here are 7 priceless tips that you can use to get the best deal.

  1. Do Your Research

The negotiation game starts long before you meet the vendor so having information upfront can be very helpful.
Research the vendors and their products and services. Find out about their prices and how they compare to the competition.

Find out what level of service they provide or how their customers view their products.

It is helpful to know the difference between their usual asking price and the costs they would incur. This will tell you the lowest price they can go for and still make a profit.

Knowledge is power. Go into the negotiation room armed with information.

  1. Don’t Offer a Price First

The one sure way to lose that power would be to name a price first. The vendor might agree to your starting price when in fact he could have been willing to go lower.

So let the vendor name his price first. In fact, try to stay silent and look like you are thinking about the offer. To ease the awkwardness, the vendor might try to justify the price or throw in some extras.

  1. Know Where the Line is

Of course, you need to know your price limit. But even though you are trying to get the best deal, you need to also be aware of the line that the vendor will not be willing to cross.

This is where your research would come in handy. Your research will tell you when a vendor really cannot go any lower. Be prepared to settle for a price where the vendor can still feel like they have gotten something out of deal.

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  1. Ask for Added Benefits

If at the end of the day, you didn’t get the lowest price, then don’t hesitate to ask what additional benefits before you take the offer.

Vendors might be willing to throw in a few extras to encourage you to seal the deal. Negotiating is not just about the price but about the full value of the offer.

  1. Mention the Competition

There is an art to letting a vendor know that his competitor also has a good offer.

Report on the performance of the competition without disclosing any prices or details.  This will give the vendor more motivation to offer you a great price so that you don’t go to the competition.

  1. Think of the Future

It is all about relationships in business. Make sure that you establish a trustworthy and helpful relationship with your vendors.

From the onset, show vendors the benefits of working with you, including any plans. Don’t forget to inform them of your experience and credentials.

A good vendor relationship will help to boost your business in many ways. Your vendors will be more willing to offer incentives, give referrals and go the extra mile for a loyal client.

  1. Make it Contractual

Even if you have a solid relationship, a vendor contract is important whether you are dealing with a small or large business.
You need to outline the terms of your agreement including cost, services or products provided, dates of delivery, contingency plans etc.

Seek legal advice if necessary before you sign. This will safeguard both you and your vendor.
Vendor negotiation is all about a fair compromise, a win-win situation for both parties.

Okay, so maybe a little more win on your side if you use these tips.

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So are you ready to use these tips when negotiating? Are there any other tips you would like to share? Let us know in the comments!