10 Tips to Negotiate Prices in Retail
Being prepared and informed is the greatest advantage
Negotiation is an age-old practice that is still common in the marketplace in many countries today. In the United States, most consumers want to avoid the haggle and will simply accept the price on the tag. It is the successful retailer that has learned how to play the game of give and take with their suppliers. Learn how to negotiate with vendors at a buying show or market to receive the best pricing and terms on products with these negotiation tips.
Being prepared and informed is the greatest advantage a retailer can have going into vendor negotiations. Learn as much about the supplier and its products as possible. How do their prices compare to the competition? What level of service do they provide their customers? Vendor negotiation preparation also includes setting goals to determine what you want and what you can live with.
Always Tell the Truth
Deception tactics, such as bluffing or falsification, may do more damage than good in the vendor negotiation process. Lying is not only unethical, but it can be difficult to maintain. While being honest, be careful not to give away your bargaining power. It's not necessary to tell everything you know, but when you do tell; tell the truth.
Show Your Potential
If you are meeting with a potential vendor for the first time, odds are they may know nothing about your company. Begin the negotiation with some history of your retail business. Explain any future expansion plans and let the vendor know how doing business with you will help them.
Ask About Incentives
The whole idea behind negotiating with manufacturers and suppliers is to receive the best price, payment terms, advertising allowances, and even exclusivity. Start by asking what incentives you qualify for and let the negotiations begin from there. Don't be afraid to ask for what you want. Make sure you get some dating on your invoices as well.
Mention the Competition
It is okay to mention the vendor's competition in the negotiation process but don't disclose any pricing or other confidential details. There is nothing wrong with letting a supplier know their competitor is in a good position, whether it is real or perceived. You may want to show the vendor a report on the performance of the competition, so they know their potential in your stores.
Find a Fair Compromise
Just like the retailer, the vendor must make a profit to stay in business. Vendor relations should be treated as a collaboration rather than conquest. As you negotiate a good deal for your retail business, consider the outcome for the supplier.
Think Long Term
Establishing a solid, trustworthy relationship with a supplier can only help your retail business. Vendors, who feel the customer will be loyal, may concede to even more incentives to maintain a long-term partnership.
Take Your Time
Never feel pressured to buy from a salesperson. If you're not satisfied with the negotiating process, ask for time to think about the offer.
Get It in Writing
As the negotiation process comes to a close, make sure the offer is put to paper. Don't sign any sales contract unless it matches the verbal agreement.
Practice, Drill, Rehearse
Not everyone is a natural negotiator. It takes time to learn when to speak, when to be silent and how to read body language. The more you negotiate and sharpen your skills, the better you'll get.