The inflation rate now seems to be going down. What will you try first to handle new price announcements?

Accept any change.
Negotiate any increase to less than 5% increase.
Shop for a lower cost supplier.
Negotiate to postpone any increase.
Ask for a price reduction.

Wait Long Enough for a Better Response

Date: 06/01/2021

Buyers are frequently under pressure to place orders for material or services. It is usually from the requester who wants to make sure the order is received. But the pressure may also be self-inflicted.

As long as you are sure you can obtain the needed goods or services to arrive when really required, don’t rush making a decision about where and when to place the order. Find out when the requester must have the order filled before you feel compelled to place the order.

Suppliers may delay giving you prices or submitting a quote for various reasons. First, they may take longer to prepare a quote than you realize. They want to make sure that they calculate their cost as accurately as possible and still make a profit. They want to be able to give you a price and terms as attractive as possible to obtain the business rather than their competition.

Or they deliberately take their time to help with negotiations. They figure that you will need to place the business soon and will not be able to wait very long before placing an order, regardless of the terms.

Of course, the order processing time for material or service needs varies. New items never purchased before may have long lead times which must be considered. The need for your organization’s new items normally are planned well ahead of time which gives the buyer more time to shop and negotiate. On the other hand, items required for maintenance, for example repair parts or services, are usually needed very quickly. That situation requires quick action.

Waiting for suppliers to come up with a better offer can yield a significant saving. However, sometimes accepting or demanding an instant quote gets better results because the supplier doesn’t have time to analyze costs. This may be the way to go if you are familiar with what a favorable quote would be.