Being profitable in any business never depends on simply one revenue source, division, or process. Organizations need strengths to be balanced throughout for sustained growth and profitability. But one practice at the center, the heartbeat of profitability if you will, is being able to sell your wares at a money-making rate. There are two variables that go into this: Obviously, the price you ask your customer to pay, and maybe less obvious, the price you ask to pay the vendor. That’s right! You don’t have to go with everything your vendors put on the table. It’s a two-way street.
Have you ever asked your vendors and suppliers to sharpen their pencils and improve their price for the services you need? If not, you may surprise yourself with the result of that question. There’s likely money out there not reaching your bottom line because you haven’t even tried to get more for less from your suppliers. In the end, it’s much easier to reduce your expenses then to sell more products or services. You’re in luck. There are some things working in your favor to help accomplish that, and soon.
The time to negotiate is now
The industry has been slow with the depressed economy these last few years. Vendors and suppliers were not immune to this. You’re in business together, with your vendors and suppliers. They have been struggling, too. And just like you, they are willing to make the occasional concession to secure business. This offers you more of an upper hand today than you would normally have.
Another reason to do this now is that time may be running out. Signs suggest improvement in the broader economy is on the way. Once that light at the end of the tunnel gets bright enough, your grounds for haggling with suppliers will be shakier. The improvement could also mean that all those homeowners who held out on making home improvements make the move to do so and when that happens, you want your margins to be just right.
Load your negotiating gun
Talk to other SGI member in your market and outside your market to discover what they’re paying for materials. Do some research online to discover some national averages of basic pricing. With this information, you’ll be able to speak intelligently with your representative, making it clear to the supplier from the outset of what your expectations are. You won’t be sharing all of this data, but it will give you a better idea of where you may have room to improve margins. Going into the call with goals gives you a better chance of getting the conversation to the place you want it.
Drive a hard bargain
Now that you have vast wisdom and understand that the times are on your side, don’t be afraid to be shrewd. In order to get what you want, you have to go and get it. One of the scariest things to do is to suggest that you will switch to another vendor or supplier. Fear not. You’ll be surprised how effective just the suggestion will be. Fear of undesirable outcomes is one of the most powerful parts of negotiating so avoid it and put that ball in the supplier’s court. The fear of losing your business will be too much for the representative to bear.
Of course, this all has to be done with tact. You can’t pick of the phone and say, “Your prices are too high! I’m switching!” There has to be a mutual respect between two negotiating parties. Your knowledge will help significantly, but how you treat your counterpart also counts. It’s not too different from making a sale in the home. You’ll want to build trust and comfort. You know how you do this best. Then, slowly make it known that you know what you are talking about and consider how hard you need to push and do it.
One last note: If you haven’t consulted with your BuyMax Alliance team regarding their pricing, be sure to do so! You may be missing out on huge savings and/or rebates! You can call them at 877-4BUYMAX or visit www.buymax.com for more details!
Now, go get your deal!