Warm reminder: Click the blue text above “FMCG Distributor Professional Consulting” to learn more about marketing and distributor internal management.
Be fully prepared before negotiation Know yourself and know your enemy, and you will never be defeated. Buyers must understand product knowledge, category market and prices, category supply and demand, their own company's situation, the price bottom line and ceiling they can accept, and other negotiation goals. I won't elaborate here. But I remind everyone to list all conditions in priority order, write the key points briefly on paper, and refer to them at any time during negotiation to remind yourself.
Only negotiate with those who have the authority to decide Before negotiation, it's best to understand and judge the other party's authority. The people buyers may contact include: sales representatives, sales managers at various levels, managers, deputy general managers, general managers, and even chairmen, depending on the size of the supplier. These people have different levels of authority. Buyers should avoid negotiating with those who cannot make decisions to avoid wasting time and also to avoid revealing their own company's position in advance.
Negotiate in your own company's office as much as possible Retailers often explicitly require buyers to conduct business only in their own business meeting rooms. Besides increasing transparency and eliminating personal transactions, the biggest purpose is to help buyers create a position of advantage. Negotiating on your own turf not only gives you a psychological advantage but also allows you to get necessary support from colleagues, departments, or supervisors at any time, while saving time and travel expenses, improving your time utilization and work efficiency.
Principle of parity Do not negotiate alone with a group of supplier personnel; this is extremely disadvantageous. Pay attention to the "principle of parity" during negotiation: that is, your number and level should be roughly the same as the other side. If the other side strongly wants to negotiate as a group, first refuse, then study countermeasures.
Do not show recognition of the supplier or interest in the product Before the transaction begins, the other party's expectations will determine the final terms. So experienced buyers, no matter how good the product and price, do not overly reveal their inner thoughts. Give the supplier the impression that after great effort, they have finally gained a precious step from you! Never forget: at every minute of negotiation, maintain a skeptical attitude, do not show interest in cooperating, let the supplier feel they are dispensable to you, which makes it easier to obtain favorable terms.
Politely reject or oppose the supplier's first proposal. Buyers can say, "What?!" or "You must be joking!" to create psychological burden and lower their standards and expectations.
Play a long game to catch a big fish Experienced buyers find ways to know the opponent's needs, so they try to satisfy the opponent on small points first, then gradually guide the opponent to meet the buyer's needs. But buyers should avoid letting the opponent know our company's needs first, otherwise the opponent will exploit this weakness to demand concessions. Therefore, buyers should not make concessions first, or not too many.
Take the initiative but avoid revealing your company's position Use questioning techniques well; "asking and seeking is more effective than asserting and attacking," and in most cases, our suppliers are more professional in their field than we are. By asking more, we can get more market information. So buyers should try to use "open-ended" questions to let the other side expose their position as much as possible. Then take the initiative, press the advantage, and give enough pressure. If the other side cannot resist, they will naturally make concessions.
Change the subject when necessary If both sides are deadlocked on a detail and cannot negotiate, experienced buyers will change the subject or pause for tea to ease tension and find a new entry point or more appropriate timing.
Avoid breaking off negotiations, but do not make hasty decisions Experienced buyers will not let negotiations completely break down; otherwise, there would be no need to negotiate. They always leave a way out for the other side to reach an agreement next time. But on the other hand, buyers must explain: no agreement is better than a forced one, because a forced agreement may have endless troubles.
Many people know the general direction in negotiation, but good buyers break the entire negotiation into parts. After exhausting you on one point, they suddenly jump to another, sometimes circling back. At this point, the manufacturer may not know their best choice and bottom line at every step.
Secondly, for the manufacturer, you should constantly tell them what you have done for them, making them feel you have paid a lot. If you can't reach an agreement, don't rush; temporarily stop the negotiation. Don't be afraid that taking the initiative to stop will have negative effects; you must "fight" to the end. At appropriate times, you should also do something surprising to make them value you. This does not mean you should not make concessions; the main purpose of "fighting" is to find a win-win strategy (but I will try to win a bit more).
Speak in a positive tone During negotiation, if you take a negative tone toward the other side's constructive or self-perceived smart opinions, it may anger them, make them lose face, and make negotiation difficult, and they may even stab you in the back. So buyers should affirm and praise the other side, give them face, and they will be willing to give you face.
Be a good listener Generally, supplier salespeople think they are eloquent and like to talk. Buyers know this and should let them talk as much as possible. From their words and behavior, buyers can hear their strengths and weaknesses and understand their negotiation stance.
Speak from the other side's perspective Many people mistakenly think that in negotiation, you should be ruthless and not give in. But facts prove that most successful purchasing negotiations can only be reached in a harmonious atmosphere. On the same terms, explaining from the other side's perspective is often more persuasive because the other side will feel that the premise of reaching a deal is that both parties get expected benefits.
Retreat to advance Some things may be beyond the buyer's authority or knowledge. Buyers should not be too hasty, should not pretend to have authority or knowledge, and should not make decisions they should not make.
At this time, it's better to retreat to advance: ask leaders or discuss with colleagues to clarify the facts before replying or deciding. After all, no one knows everything. Hasty decisions are usually not good; the wise always think deeply before deciding. As the old saying goes: "Think twice before acting" or "A small impatience ruins a great plan." It may be better to postpone to the next time—remember, often we can wait but suppliers cannot. In this way, at the end of negotiation, you can claim that you need to decide with your superior manager, buying yourself more time to consider rejecting or reconsidering a proposal.
Focus on our strengths (sales volume, market share, growth, etc.) Tell the other side about our company's current and future development and goals, making the supplier enthusiastic and interested in our company. Do not talk too much about our weaknesses; a skilled supplier negotiator will attack your weaknesses to reduce your strengths.
While affirming the supplier's company, point out its weaknesses and tell the supplier: "You can, and need to do better." Repeat this statement until the supplier begins to adjust their self-evaluation.
Use data and facts to enhance authority Always base on facts. The facts here mainly refer to fully using accurate data analysis, such as sales analysis, market share analysis, category performance analysis, gross profit analysis, etc., for horizontal and vertical comparisons.
When you speak with facts, the other side cannot exaggerate certain things, thus protecting your principles. First, as a retail buyer, before negotiation, you must be clear about your goals. You must adhere to the company's principles, and even when you have to make concessions, repeatedly emphasize the principle, and this principle is supported by data and analysis. You should always maintain a professional style, making the opponent unconsciously deepen the feeling that "he is right because he is very knowledgeable in this area."
Control negotiation time When the planned negotiation time is up, you should really end the negotiation and leave, making the other side nervous and make greater concessions. If possible, also invite their competitors to talk at the same time, and have your assistant deliberately come in to tell you that the next interviewee (i.e., their competitor) is already waiting.
Do not mistakenly think 50/50 is best Because of win-win talk, some buyers think the best result is 50/50 (splitting evenly), to keep harmony. This is a wrong idea. In fact, experienced buyers always try to get the best terms for their company, then let the other side get some benefit to report to their company. Therefore, from a retail purchasing standpoint, if the result is 60/40, 70/30, or even 80/20, there should be no "reluctance."
-------------------------------------- Like this article? Feel free to click the top right corner to share to your circle of friends; About us: WeChat name: FMCG Distributor Professional Consulting Management Account intro: 20 years of FMCG distributor operation and management experience, professionally targeting distributor internal: Click the "Read Original" below to enter our micro-community for interactive communication and questions. Learning exchange QQ group: 344257092 Reply 1 to enter the micro official website to view historical messages. -----------------------------------------