Top 10 Do’s and Don’ts when negotiating with suppliers

 

Procurement of goods and services is becoming increasingly digital and short-term in companies. If you are not a professional buyer, but you are in a position to negotiate with suppliers, consider these top 10 Do’s and Don’ts as a guidance when dealing with your suppliers.

1. Don’t tolerate only one offer. Do get at least three different offers for comparison.

While you search for products online you will find variety of recommendations where to buy what you need. Instead of receiving only one offer from one supplier you shall insist do ask for at least three offers. This helps you compare the different offerings and empowers you to make the best choice.

2. Don’t accept the first price given to you. Do insist on a price reduction at least twice.

You might have the tendency to accept the first price unchallenged in order to save time and receive the desired product as fast as possible. What could you do better? Be bold and ask for a price reduction at least twice during the process of ordering.

3. Don’t tell a supplier they are the only option. Do mention you have multiple to choose from.

You are ordering only from one supplier? Don’t let them know they’re the only one! You hold the power in your hands if you choose to mention that you have more offers on the table. This will put the supplier in a competitive situation and you are more likely to receive a better offer.

4. Don’t accept unfavourable payment terms. Do demand better conditions.

When ordering products from you suppliers, consider it is of their interest to request advance, instant or short-term payments. Reflect what’s best for you and don’t hesitate to demand for at least 30 days payment term.

5. Don’t simply agree to supplier requests. Do ask for more information.

It might be possible that suppliers want you to agree to auto-renewals or volume-commitments. Don’t agree to this request without having asked for cancellation clauses and volume discounts.

6. Don’t share sensitive data without contract. Do insist the supplier signs a NDA.

Be careful to disclose confidential data without requiring the supplier to sign a non-disclosure agreement (NDA). You have the right to ensure this document is signed from the supplier’s side before sharing any sensitive information.

7. Don’t sign contracts without reading them. Do review them carefully.

Never ever should you feel pressured or be lazy to sign contract without having read them carefully. It is advisable that you take your time to review legal conditions and even ask a lawyer for large volume contracts to ensure you didn’t bind yourself on terms that you don’t agree with.

8. Don’t accept suppliers’ T’s & C’s. Do enforce your own guidelines.

Whenever you receive an offer the supplier will attach their terms and conditions. You could either accept the supplier’s T’s & C’s or you negotiate your own T’s & C’s in the offer

9. Don’t order from dubious business partners. Do check out your relevant suppliers in advance.

Whenever we are on the search for a product there are aspects we may find suspicious. The applies especially to ordering online. Therefore you should be careful to order from dubious business partners and review relevant suppliers for inconsistencies that could present a risk to your business.

10. Don’t order without an approved purchase order. Do raise a request for approval.

Through B2B e-commerce offerings, purchasing goods and services for the company has become seamless for the individual employee. This raises the risk of internal chaos when products are ordered out of budget and without any approval. Raise a request when ordering online and establish transparency for all ordering processes.