How to Get the Best Pricing and Terms from Your Supplier

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Use these tips and tricks from the beginning of your relationship with your supplier and as you continue to develop that relationship over time.

Be professional, clear, and concise in your communication. Pay attention to spelling and grammar.

Do not open your conversation by asking about the minimum order quantity (MOQ).

That information will surface over time, as you continue email correspondence or Skype conversations. You don’t want them to think of you as a small fish who is just looking to get 50 or 100. Because they will move on to bigger fish who seem like better prospects.

Do establish your price tiers right away. This lets the supplier know that you are not focused on the MOQ. You’re thinking ahead. It gives your supplier an initial impression that you are thinking big, and you’re not going to waste their time.

A really effective technique is to speak about your first order as a test order. Use those words in your initial contact with a supplier or in a follow up contact. Let them know you want to test the market. This shows them something about how you do business. It alludes to some larger orders in the future. And it can help you get a smaller order up front or negotiate for a low upfront test order with an agreement in place for your next order.

No matter where you’re at in your business — let’s say a year down the road you’ve got multiple products going — you’re not going to jump into a brand new product, order 10,000 of them, throw them in some packaging, and shoot them off to Amazon. You’re going to want to test the market. You’re going to want to test your packaging. Who knows, there could be a defect with that item. Nobody’s going to go up there, sight unseen, and order a boatload of products, hoping for the best.

Negotiate, but be flexible. You might agree to a certain order size, but have the manufacturing of that product spread out over a certain time period. Maybe they’re not willing to go lower than 1000 MOQ, but you only want 200 to start. You can offer to take the 1000 pricing and draw up an agreement where they make 800 of those units over the next 6 months, 3 months, or whatever is appropriate for your situation.

You could potentially agree to a particular order size, and have the manufacturer store it and ship it out in portions over time. Sometimes they can do that for you.

Do not be unreasonable. You may need to play hardball at some point with some suppliers and really negotiate. But remember that flexibility, especially at the beginning, can really pay off as you establish yourself and prove that you are a great customer. They will want to prove to you that they are a great supplier.

Most things are negotiable over time. You might be dealing with this supplier for 3 months,

6 months, or a year before you try these kinds of agreements.

Tailor your first email to each supplier. Talk about a specific feature of their product or something that differentiates them and you’ll get a much higher response rate.

Here’s an example of an initial supplier email:

“Hello, my name is Shane Oglow. I’m contacting you on behalf of my company. We’re currently looking to expand our product range, and we’re interested in your spatula sets.”

Then mention a detail about the product you’re looking at that differentiates it from other products (e.g., handle length, colors) and/or ask something you’re truly interested in knowing.

Then go on to say something like, “This is a new market for us, and we’d like the opportunity to put this product through our customer test phase before aggressively expanding. We require an order of 200 units to complete this test. We look forward to hearing back from you at your earliest convenience. Thank you,” and end with your name.

That’s really it. It can be that simple and that basic. Just a few sentences to get the ball rolling.

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