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How to negotiate the best possible deal with suppliers
By Peter Brook
No matter at what level you are dealing with a customer, remember that what is good for you is not automatically good for the customer. By taking the customers views and opinions into consideration early in the planning of any event or activity it is possible to negate this and make it clear what is in it for them.
The fact still remains that it is the buyer’s duty to negotiate the best possible deal with a sales person. Buyers in large retail groups are specifically trained in making objections and behaving in a way that tries to undermine the seller’s confidence in order to get the best value for their business.
Early in my career I was working as an area manager for a large retail group in the UK specialising in the sale of beverage alcohol. I had the opportunity of spending four months working on secondment within the buying team for the business and the first thing I was told on the first day was to say ‘No’ to everything as there was always a better deal to be had from suppliers.
As a generalisation we can assume that there are ten ‘golden rules’ which buyers either consciously or sub-consciously think about:
1. Always say ‘No’ first. If you say yes right away you have given away value to the supplier. You have to assume that they had left room to negotiate their offer.
2. Never show enthusiasm in front of a supplier. If you show enthusiasm the supplier will take advantage of you and not offer you the best possible deal.
3. Always talk price and margin. No matter how many features and benefits the supplier offers you, only talk about price and margin. Do not give the supplier an opportunity to justify a better price or margin for a specific reason. Tell them you are not interested in what is so special about the product or promotion the suppler is offering, you are only comparing prices with competitive offerings.
4. Consistently ask for the impossible. A supplier’s confidence will be undermined when you never seem to be satisfied with whatever offer is put in front of you. In order to ‘please you’ the supplier’s initial offer will already be a good one, because they know what reaction they will get from you.
5. Tell them ‘You will have to significantly improve your offer’. Always expect the supplier to have plenty of room to negotiate. Tell them to give all of that up right away.
6. Always be someone’s second fiddle. Always make it clear that you report to someone above you who has set you clear goals and objectives. Even if you would personally like the offer, you would still have to answer to someone higher up.
7. Never close a deal without getting something in return. Make it known that you are doing the supplier ‘a favour’ by accepting their offer, you expect them to do something extra in return.
8. Play the ‘good cop, bad cop’. Work in pairs and confuse the supplier by each behaving very differently. One plays the ‘good cop’ who is open to reason while the other is completely unreasonable and demands outrageous things from the supplier.
9. Use the salami-slicing tactic – break everything down. Never accept a package deal, judge every component on its own merit and negotiate each item separately.
10. Use the Columbo tactic. After the supplier thinks they have closed the deal and have given everything they are prepared to give, ask for something new or extra. Nine out of 10 times they will give it to save the bigger deal.
Peter Brook heads REL Sales Consulting and is author of Turn Your Sales Force into Profit, published by Infinite.
