{"id":848,"date":"2017-05-23T08:28:14","date_gmt":"2017-05-23T08:28:14","guid":{"rendered":"https:\/\/www.subbly.co\/blog\/?p=848"},"modified":"2022-05-25T22:09:30","modified_gmt":"2022-05-25T22:09:30","slug":"supplier-negotiations","status":"publish","type":"post","link":"https:\/\/www.subbly.co\/blog\/supplier-negotiations\/","title":{"rendered":"5 Golden Rules to Govern Your Supplier Negotiations"},"content":{"rendered":"

In a bid to join the <\/span>massive subscription box market<\/span><\/a>, you\u2019ve connected with a supplier, and they like your hustle. Now it\u2019s time to negotiate. <\/span><\/p>\n

The mere mention of the world reminds me of the hard selling environment in Glengarry Glen Ross.<\/p>\n

\"always<\/p>\n

But negotiation doesn\u2019t have to be daunting. In fact, with the right strategy in place, negotiating with a supplier can be a fun experience. <\/span><\/p>\n

Whether you\u2019re sourcing free samples, or buying items to fill your boxes, this post will equip you with five different negotiation tactics you can use to get the best price, while forging long-term business relationships.<\/span><\/p>\n

1. Aim for Distributor Pricing<\/span><\/h2>\n

Remember first and foremost to approach your supplier as a trade partner seeking trade prices. The easiest way to do this is by introducing your brand with an accompanying website or business card \u2014 depending on if you\u2019re negotiating online or offline. <\/span><\/p>\n

Also, hint at the number of products you\u2019re looking to purchase, as bulk orders will likely fetch you a better deal. <\/span><\/p>\n

When you do get the quote, don\u2019t assume that their trade prices are set in stone. Haggle with them by mentioning that \u2014 if all goes well \u2014 you\u2019ll be back for more of their wares.<\/span><\/p>\n

2. Be Transparent With Your Budget<\/span><\/h2>\n

When dealing with price, it\u2019s better to keep your budget out in the open, as this will encourage the supplier to do the same with their expectations. Keeping your budget in the dark will make the negotiation murky. <\/span><\/p>\n

\"I<\/p>\n

You don\u2019t have to lie your entire hand on the table from the very beginning, but being open and honest will only help to build a long-term bond \u2014 and that\u2019s more valuable than a one-time deal, as I will soon discuss. <\/span><\/p>\n

For example, you might want to come out and state exactly how much you can and can\u2019t spend. By giving them the maximum price you can pay per unit, a supplier might be willing to come down to your price rather than lose the sale altogether.<\/span><\/p>\n

This solidifies the importance of knowing your maximum price per box and overall cost metrics. These need to be calculated before price negotiations begin, so you can ensure you\u2019re making a profit.<\/span><\/p>\n

3. Always Think Long-Term<\/span><\/h2>\n

Good relationships are key for the long-term success of your subscription box business. <\/span><\/p>\n

When you repeatedly work with the same suppliers, you\u2019ll soon be getting more than just good deals \u2014 you\u2019ll be getting free samples, access to new products before anyone else and shoutouts on social media. Those are just some of the little perks of a long-term professional relationship that can give you the edge over your competitors. <\/span><\/p>\n

Plus, if you set up long-term contracts to place multiple orders over coming months, you might be land an even bigger discount. <\/span><\/p>\n

There\u2019s also something to be said for not playing hard-ball with your suppliers, particularly if you\u2019re operating in a small niche. That\u2019s because the smaller the niche, the fewer suppliers there are \u2014 so be wary of isolating your brand.<\/span><\/p>\n

4. Go Beyond Price Incentive<\/span><\/h2>\n

Even if you\u2019re a bootstrapped startup, you almost certainly have have more than just cash to offer in a negotiation. <\/span><\/p>\n

Remember firstly the additional promotional value you\u2019re offering the supplier\u2019s brand. If you have a large social media following, or a decent email subscriber list, then make sure they know about it. After all, it will be their products being purchased and paraded in front of that targeted audience \u2014 an audience that likely aligns with their target market. <\/span><\/p>\n

The targeted promotion that you\u2019re offering can easily result in additional business for the supplier, and they know it. They also know that they would have to pay a tidy sum in order to get such targeted marketing done otherwise. <\/span><\/p>\n

You\u2019re also offering value by association. For example, if you have a collection of small and large suppliers, then you\u2019re doing a massive service to those smaller companies by including them side-by-side with larger companies. Make sure to mention that in your negotiations. <\/span><\/p>\n

Finally, you might consider adding value to a deal by leveraging your social media following to shout out the supplier in question \u2014 which would translate into a form of <\/span>influencer marketing<\/span><\/a> for them.<\/span><\/p>\n

5. Consider a Cost-Share Agreement<\/span><\/h2>\n

Let\u2019s say you\u2019re negotiating with a large company that has a huge audience. You really want their products in your box, but \u2014 even after fierce negotiations \u2014 you just can\u2019t afford their prices.<\/span><\/p>\n

What do you do?<\/span><\/p>\n

Well, you could offer a cost-share agreement. Essentially, you\u2019d be offering them a share in the overall sales of your subscription box for a lower price purchase. This can be especially helpful if you don\u2019t have the cash up front, and now that they have a stake, they might even promote your box via their marketing channels. Which would be amazing. <\/span><\/p>\n

\"\"<\/p>\n

Now, this isn\u2019t the best way to ensure overall profitability in the long-run, and it might hurt to give away a slice of your profits, but for short-term brand embellishment, it might just work.\u00a0<\/span><\/p>\n

Negotiate Like a Boss, Without Selling Your Soul<\/span><\/h2>\n

The tips above will keep your negotiations from going sour, but to get the absolute best deal \u2014 you\u2019ll need to police your mindset.<\/span><\/p>\n

Rather than viewing each negotiation as a battle, your goal should be to lead with value and make it a win-win for both parties. Make sure that ethos comes across in your emails, phone calls and real-life meetings, and you should be golden. <\/span><\/p>\n

Finally, do yourself a favour and avoid making promises you can\u2019t keep. Do the maths to ensure you can make the necessary purchases, and then work with what you have. Either that, or risk losing the trust of a supplier. <\/span><\/p>\n

Do you have any of your own tactics you use during supplier negotiations? Share your best tips in the comments below!<\/span><\/p>\n

[js-disqus]<\/code><\/pre>\n","protected":false},"excerpt":{"rendered":"
In a bid to join the massive subscription box market, you\u2019ve connected with a supplier, and they like your hustle. Now it\u2019s time to negotiate. The mere mention of the world reminds me of the hard selling environment in Glengarry Glen Ross. But negotiation doesn\u2019t have to be daunting. In fact, with the right strategy […]<\/p>\n","protected":false},"author":7,"featured_media":849,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"article_type":[567],"class_list":["post-848","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","article_type-article"],"acf":[],"yoast_head":"\n5 Golden Rules to Govern Your Supplier Negotiations<\/title>\n<meta name=\"description\" content=\"Don't go into a negotiation with potential suppliers and existing suppliers without being prepared. 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