The Art of Negotiation: What You Need to Know to Seal the Deal

Smydge Perry left the field of law to become a fashion entrepreneur. She is launching her debut collection of custom business apparel in spring 2016.

If you are an independent fashion designer or launching a new brand it can be intimidating to negotiate with established suppliers and vendors. Here are a few tips to help you negotiate a favorable deal.

BEFORE the Deal

1. Do your research on pricing and competitors

It is important to know how scarce the product or service you are shopping for is in the marketplace. If there are lots of suppliers, then you have a strong bargaining position; conversely if that supplier is the only one in your region, then your power to negotiate terms on pricing or delivery will be limited.

2. Deal with the most senior person

Preferably the owner. In the case of small businesses, it is better to know the owner who can authorize discounts or make other concessions to win your business. In larger companies, senior sales associates are in a better position to help you navigate company bureaucracy. Whether large or small, it is important to have access to someone in authority when problems arise.

3. Develop rapport from the beginning

Even in this age of technology, business relationships are still built on human relations, emotions and expectations. So, treat others as you would like to be treated and seek to establish a business relationship built on trust, mutual respect and credibility. That begins the first time you make contact with the supplier or vendor whether in person, on the phone or electronically.

DURING the Deal

1. Be clear

Be clear about your expectations on key terms such as pricing, quantity, and delivery dates. Ask the supplier or vendor for a service/sales contract or use the internet to draft a generic one yourself. Make a habit of putting all agreements in writing, demand current price lists, get receipts for any payments and be sure to memorialize all conversations with a follow-up email.

2. Walk away from a bad deal

Don’t accept unfavorable terms and be willing to walk away from a bad deal. The threat of losing a business opportunity should make even the most stubborn salesperson compromise. Likewise, you should quickly fire a supplier or terminate a deal with a vendor who delays delivery without a valid explanation. In the case of delivery delays, ask for a discount or include penalties for late delivery in the sales contract.

3. Keep things in perspective

When problems arise (as they surely will), be sure to separate the problem from the person. Don’t be emotional or engage in assigning blame. Instead, empower the supplier or vendor representative (presumably someone in authority) to find a solution for you: “What is your advice or suggestion on how we can solve this problem?” Most people will honor a solution they were involved in creating rather than having it forced upon them.

AFTER the Deal

While it may seem old fashioned, be sure to thank the supplier or vendor for their product or service. Where service has been exceptionally good offer to write a positive review or make a referral. This will cultivate a long-term business relationship. Similarly, where a supplier or vendor has poor service or products be sure to report them to the Better Business Bureau or other licensing agency (city, state or county) in your region.

In sum, you have the power to negotiate terms that are favorable to both you and your suppliers and vendors. Happy negotiating!

The information in this article is for educational purposes only and does not constitute legal advice.

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