They can impact everything from the quality of your goods and services through to your bottom line. Here are some tips on how to negotiate the best deals with your business suppliers.

Know what you need

Before you approach suppliers, put together a list of your requirements. This should include what you are seeking from a supplier including: the products/services you need, the price and quality of goods, payment and delivery terms, and any after sales support offered, such as maintenance, repairs or warranties.

Consider which of these are essentials and what you might be willing to compromise on. For example, if you are a restaurant owner whose menu centres on fresh, premium and locally sourced seafood, your key considerations in choosing a supplier may be daily delivery and high quality, with price being a secondary consideration.

Dollars and sense

While pricing can play a big part in choosing your suppliers, it certainly shouldn’t be your sole driver. Choosing the cheapest supplier isn’t always the best option. Speak to different suppliers and find out what they offer. This will provide a good insight into what the average prices are across the industry, as well as what services and support each supplier can provide. In addition to this, speak to colleagues and industry peers. You may gain valuable insights from their recommendations and experiences with different suppliers.

Research the state of supply

Undertake some research into the availability of the products you need from suppliers. Are they readily available? Are there many suppliers or only a handful that you can purchase those specific goods from? Knowing the availability of products and the scope of suppliers in the market will help you understand how to best approach negotiating a deal. For example, a clothing label looking to use only certified organic / ethically sourced fabrics in their ranges will have a smaller, select range of suppliers to work with, which may influence how they approach and negotiate deals.

Know how to negotiate

When it comes to negotiating a better deal, consider your budget and what you value most in a supplier. Aim to work with a supplier whose products and philosophy are in line with this. Know what you want, understand their place in the market, their need for new business, and reflect this in your negotiations.

Go in with a few clear requests and don’t be afraid to ask for what you want. Ideally you and the supplier will work together to meet each other in the middle. For example, you may ask the supplier for a reduced price, but offer them a longer-term contract as an incentive to do so. Be prepared to make concessions of your own in exchange for conditions that best suit your business and its needs.

Don’t sign any contracts until you are completely satisfied with all the terms and conditions. Consider taking the contract away, getting a second opinion and a legal professional to review it.

Addressing the finer details

It’s important to clearly communicate what you expect from a supplier before any deals are finalised. This should be put in writing and include all the small details. For example, payment terms, penalties for failing to deliver on the contract, ownership of goods while in transit, or if the deal includes a warranty period or after sales support.

It’s also fair to ask the supplier for references you may speak with, to run a credit check on them (to ensure they are fit to deliver the products and services as contracted), and to factor in a trial period before committing to a longer-term contract.

Review supplier deals

Review supplier deals regularly. For example, check the standard of goods and service remains consistent. Stay in contact with your supplier and if you have any feedback or requests, communicate these and seek out any support promised and due to you under your contract.

Remember, the best business-supplier relationships are those where both parties feel like they are getting a fair deal and are being treated respectfully.