Most consumers prefer quality over quantity and will only settle with quantity because of the economic hardships. Besides, running a business that offers quality attracts many loyal clients and consequently improves cash flow while growing profit. But then again good quality products do not come cheap but you always have the option of negotiating for better payment terms more especially if you are interested in the valuable tier 1 kind of stationery.
The best negotiation tactics
- Don’t lie- thinking that someone will understand you when you are at your lowest moment financially is close to impossible but truth be told we have all been in that position one time too many. Suppliers have also been in that position at some point as they were scaling the ladders and they can understand you if you are honest with your current financial situation.
Lying about your finances to get goods on credit can be detrimental when things fail to work as you expect them to. Be sure, therefore, to have a preexisting plan on how to recover the money, in the long run, to keep your business going and to pay the suppliers off.
Being honest about your current financial predicaments could attract less stringent terms and since the suppliers don’t want to lose a valuable customer they might propose helpful measures to get you back on track.
- Approach the relevant authority- when seeking help only two things can happen, you will either get it or not get it, so whichever way it goes, best you get it directly from the horse’s mouth. And the best way to go about this is directly dealing with the person that is in charge of finance.
You will, therefore, have to either talk to the COO, the CFO, or the national sales manager, as they deal directly with the company’s finances and are therefore better placed to know whether what you are requesting for is possible or not.
- Always have a plan B or even C – when you are in a tight situation and are looking for help it is always good to keep an open mind so that whichever answer you will get, you won’t get knocked out of balance. So your supplier could also be facing hard financial times thus not able to help you, meaning that you will have to seek help from other suppliers or even get a bank loan.
The other desperate option is using your credit card; you could go with crowdfunding, where you will raise money from a large number of people who then contribute a small amount online. You could also attract an Angel Investor, who are known to provide capital for startups and which is exchanged or the convertible debt or ownership equity.
- Table a mutually beneficial proposal–suppliers will not hesitate to jump on board if they are getting something in return. Additionally, your proposal should be sensible and actionable for both sides. Since you will be requesting for a longer payment term, you could go with an increased order in the number of goods or order goods that are highly-priced. Extended payment terms normally free up more of the working capital and which is a welcome advantage.
- Use the best communication skills- there is something about constant communication and maintaining a good open relationship, suppliers won’t be very happy when they only get to know about your business when you are in urgent need of their help.
Besides, some retailers are snobs and will not reply to emails or take or return their supplier’s calls. It will, therefore, be good for you if you invested in a good relationship early enough, be active so that when you request for a meeting to discuss your proposal things don’t feel so awkward to the point of it looking like you are begging for help, rather a discussion of the business challenges and the way out.
Understanding how your supplier’s business operates gives you the chance to have an informed conversation, so you don’t have to be keeping quiet or wandering off in the woods in the middle of the conversation. Besides having knowledge of how they operate gives you the opportunity to better structure your proposal.