Expert strategies to influence and negotiate the best prices with your suppliers:
- Know the difference between your bid price and buy price.
- If you’re awarded a project, go back to the supplier and ask for the buy price. It is likely there will be more room to negotiate at this stage.
- Decrease their risk & increase sales volume
- Will they do long term contracts?
- Mention foreseeable repeatability, if you win this project, will it lead to more from this GC or Builder?
- Buy in bulk – learn more on our recent blog post here.
- Relationship Building
- Be professional and responsive.
- Customer Loyalty
- Do they think you’re just shopping around for the best number?
- Prompt Payment
- Can you offer credit references? I.e. A different supplier or industry partner verifying that you have a history of paying on time and continuing business loyalty
- Offer referrals
- You will help spread the word about their great service and product availability
The supplier isn’t the only who should benefit from your relationship – ask what’s in it for you?
- What are their delivery times & rates?
- Discounts? Is the pricing ever based on volume?
- Difference between price flexibility for low margin & high margin items?
- How long will a pricing offer stand? What if the job gets delayed?
- What’s their backorder percentage?
- Return policy for damaged product?
- How quickly can they get pricing back to you? (they obviously don’t want to be shopped either)
- Can you leverage competitor price matching?
By: Liz Zofka