Survey

In spite of high inflation some cost savings were obtained. How much net cost changes in the last 6-12 months did you obtain over or under the budget?

More than 10% under.
1 to 10% under.
No change.
1% to 5% over,
6% or more over.

Make Offers To Negotiate Better Deals

Date: 09/01/2015

The secret of successful negotiating is finding out what the other side really wants. In fact, they may not even realize what they want until you make them aware of it. Take an obvious example: a buyer may assume that salespeople really want a certain price for their product, but what they actually want is a larger sales volume. Once the buyer explains the potential amount of business that can be awarded, the price may be lowered.

There are many offers that may interest a supplier’s management that a salesperson may not be aware of. That is why it is important to deliver offers to the managers or executive who will show an interest in different proposals.

A salesperson may not know that his organization is having a cash flow problem that the buyer can alleviate by paying bills early, helping the supplier obtain bank loans, or pay for needed raw material.

A buyer familiar with the suppliers processes and products may help reduce the supplier’s cost and consequently improve the supplier’s profit by ordering products with unneeded features that the supplier routinely includes with the product. Everyone benefits. The buyer’s organization obtains a lower cost and the seller’s organization increases its profits.

The buying organization may not need expensive packaging that the supplier routinely includes on the product. A seller may normally wrap each piece and insert it into a colorful shelf display box, requiring the buying company to unwrap each piece before use. If the buyer agrees to accept bulk packaging the supplier should be able to reduce the price. This would also reduce the buyer’s amount of labor before using the product.

The number of possible offers for negotiation is only limited by imagination. Even when the supplier rejects a proposal, it still stimulates the seller to come up with other ideas. It encourages the supplier to negotiate a transaction that satisfies each party.