Negotiating Lower Prices
Would you like to learn how to negotiate lower prices? Negotiating lower prices is an art we have lost in the United States. We just don’t do this anymore. The only times I did this in my entire life before I got into this business was when I bought my cars and my house. Other than those experiences, I went to Mexico when I was 16. While in I wanted some pocket knife they were selling and I was specifically told to begin negotiating lower prices by one of the senior members of our group. The Mexicans at the open store we were shopping at were used to this process.
They had no set prices just suggested prices. So, the knife was offered to me at 10$ and I ended up walking away with it for around 5$. I tell you this story because I want you to apply the exact same practice while shopping for a product. Throughout this blog post I will discuss several ways for you to improve your negotiations with manufacturers.
Let’s start with the opening comments. When you are speaking with a Chinese manufacturer from Alibaba you need to sound as professional as possible. You do not want to divulge to them that this is your first time buying. In fact you want them to think that you aren’t even the person purchasing the product. When I speak with these suppliers I tell them something along the lines of “Hi! My boss would like me to purchase xxx knives from you. He would like me to find your lowest price for xxx amount of pieces”.
Immediately this strategy does several things. First they think you are an established business with several employees. Second if you say something that makes you sound like you don’t know what you are talking about they will be more understanding because, you aren’t doing this for you, you are doing this for your boss who is a pro.
Last but not least, if they tell you a price you can say please wait while I speak with my boss. Then you can come back a couple minutes later and say my boss doesn’t accept this price but he accepts xxx price. They will probably say no we can’t do that and you can use the excuse hey my boss is a pain in the butt and won’t budge on that price. It helps put the burden of responsibility on your fictional boss and not you. This will help you while negotiating every single time.
IF YOU ARE … Private labeling
I would like you to keep in mind though that if you are trying to private label a product expect to pay a bit more. They will need to create that product specifically for you and the minimum order quantity (MOQ) will have to be a bit closer to what they have advertised.
IF YOU ARE NOT…. Private labeling.
I know I was hesitant at first going with specific suppliers because their MOQ was too high. Especially when you are jumping into a new product and you are concerned if it will sell. Just remember if you are not private labeling a product the MOQ is just a suggested quantity. Most suppliers will allow you to take about half off of the MOQ. So, if they sell 500 MOQ you could expect 250 MOQ. Be warned though this may or may not harm your price. The benefit of this entire system is large bulk orders. Buying in bulk will obviously drive the price down.
Still though, many suppliers don’t care as much as long as you are still buying from them and they know that you will with them for the long run.Ultimately it is your job to get the best price possible. This will all cut into your profit margins. I hope you have at least a basic understanding of the art of negotiating lower prices. We discussed how to communicate with suppliers, how to begin negotiations and how to get a lower minimum order quantity.
After you have been doing this for a while you will develop the tools you need to be successful. It all comes with time and experience. You will constantly give yourself a million excuses of why not to jump into purchasing a product but, after your samples are ordered and you are satisfied with a product just DO IT!
The very worst situation will be you getting back almost exactly what you paid for everything by discounting your products. If you followed the steps I covered in my previous blogs you will never be scammed either.
So with that good luck and happy hunting!!!
P.S. ALWAYS I repeat ALWAYS be extremely, over the top polite. Respect them and they will respect you.