How buyers get sellers to sweeten the deal

To be clear, I'm primarily referring to purchasing agents and purchasing departments. These folks have mastered the art of getting sellers to sweeten deals. It's next to impossible to get most of them to appreciate the value of your products/services. They aren't evil; they are simply doing their jobs. They've been trained and are expected to purchase items at the lowest possible price. Using some or all of the following techniques makes it possible for them to mess with unsuspecting sellers. The key is to be aware of these tactics so they don't catch you by surprise, weaken your resolve and get you to think that lowering price is the way to win a deal. Purchasing departments:

  • Won't give any supplier 100% of the business. By keeping at least two suppliers they are able to play one against the other should issues arise, etc.

  • Request better payment terms and may even threaten slower payment unless you lower your price. Know which is most important to your company at that time, maintaining high rates or cash flow availability.

  • Tell you they have another quote that came in at a lower price. Often they won't share how much lower the quote is, or, if they do share they likely tell you a number that is significantly lower than yours to see how much you'll move.

  • Will be vague on a few items on the bid. They hope that suppliers will provide new ideas or recommendations that they can then use against other suppliers. Ask for clarification.

  • Get quotes from 5+ suppliers. They do this to make sure they are getting the lowest price and to compare terms; more often though they do this to validate their current supplier. Determine how many quotes without orders you should submit before you stop quoting. Protect your time and resources.

  • Demand your lowest rate in exchange for their high volume of business. Watch out. Don't lose your leverage. If you lower your rate make sure everything else of importance is agreed to i.e., payment terms, number of revisions allowed, etc.

  • Give a fictitious purchase date or stall making a purchase. They do this to make sellers nervous about making their goals and because it works. Watch out for opportunities that get pushed back to a later date. Question why that is happening, how real it truly is.

  • Go missing. They know how frustrating it is for sellers to play hide and seek so they become purposefully hard to reach. This, of course, gets sellers thinking that they've already lost or will lose the business. The only way for sellers to combat that pressure is to have multiple 'real' deals in their pipeline.

Pay attention when these tactics are used, push back a bit, call their bluff every now and then, know when to stand firm and know when to walk away. When they say 'Jump!' we don't need to ask 'How high?'

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