As I’m sure you know, business owners are always looking for the next way to minimize expenses, and maximize overall profits. One of the most effective, yet most commonly neglected ways of doing this, is renegotiating with your suppliers. If it’s been a while since you did this, it may be high time you go back to the bargaining table. Here are some of our best tips for gaining the upper hand in these negotiations…

Present yourself as a valuable customer

Just like any business, suppliers want to sell as many of their products as possible, and they’ll place a lot of value on any customer who will help them towards their goal. Whenever you’re negotiating with a supplier, particularly in your first round of communications, be sure to present yourself as someone who will give them a lot of business in the long run.

Obviously, this can be harder depending on the supplier, for example if you needed one order of extension ladders for a single project. However, you can still sweeten the deal by promising to recommend the supplier if you’re satisfied, or offer your name on a customer testimonial. Just make sure you have something to back this ploy up, like logical projections showing your increase in demand for their products.

Think outside of pricing

If you have a supplier who has to stick to their pricing model, you can try negotiating on other things that will help you to lower expenses. One example is negotiating to reduce the amount of a down payment, a discount when you make larger orders, improvements to the warranty, faster shipping and so on.

Even the most stubborn of suppliers will have some part of their service they’re willing to negotiate on. If you’re granted longer terms, it can free up a lot of your capital, allowing you to invest more in the big steps you’ve planned for your business’s future.

This, in turn, can allow you to pay supplier invoices earlier, giving you more leverage for negotiating further discounts. If your supplier is unbearably stubborn in their ways, then it’s a good prompt to start looking for a replacement!

Don’t accept their first offer

Not accepting the first offer is a golden rule in any negotiation process, and you should certainly apply it when negotiating with your suppliers. You should be quick to come up with a compromise, or simply ask them to get back to you with a better price and leave the discussion. Just make sure you’re not being insolent for the sake of it, and have some justifiable reason to mention.

You may want to point out that you’re offering them years of consistent business in the future, that you’ve made some substantial purchases in the past, or that their offer covers features and services that you don’t need or don’t want to use. They’re not going to offer you the best deal straight away, so don’t be taken for a fool and keel over too quickly!