Bargaining, auction or long time partnership? Basically you can reduce all to this question when it is about to consider the value of your business relationship.

Bargaining or auctions to get the best possible prices are not necessarily negative negotiation tactics. But the way you do it may harm the business relationship. So instead of thinking of “if to do it” maybe re-think on “how to do it”.

In a long time partnership with a supplier, bargaining for the prices might not be the best approach as a true partnership will bring you on a long run more value added than one time extra margin or extra sale volume. What you may gain via an aggressive price or commercial terms improvement you may loose on the other essentials aspects of the business.

In order to avoid subjectivism, just put yourself the below questions:

1. Did the vendor assigned an account manager for my company or I am just discussing with whomever?
2. Is this vendor understanding the way we are doing business and does he support this?
3. Is the vendor transparent and gives you all the necessary figures (not the confidential ones, like your competitor’s) in order to make the best decision when negotiate?
4. Does this vendor periodically asks for information regarding stocks, sales and margin, is he pro-active?
5. In the current economic crisis, has the supplier understood the difficulties of the retail and acted flexible?
6. What is total market share of this supplier? Has this supplier the capabilities to grow with me?
7. How your turnover will be influenced if you will not buy products/product categories from this vendor?
8. How the position in the market of the vendor will be influenced if they will stop doing business with you?
9. In what way you can replace this vendor if the case and with what impact to your business (remember, facts and figures)?
10. What is the history of support/ lack of support for daily business issues?

Choose your partners carefully, not any supplier is made to become a real partner. Partnership involves cultural and personal chemistry. It involves effort and commitment, honesty and teamwork.

Have you ever been in a situation to re-size your number of suppliers? Did you use some extra factors in order to choose which supplier is out and which is staying? Please let me know in the “comment” box below.

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