Project Managers, This Is How You Negotiate Better Prices From Your Suppliers
Every good project manager needs to liaise with multiple suppliers. When you’re managing a big construction project, there are all sorts of teams involved and only one overall budget. It’s your job to make sure every supplier comes in under the big red line. In most cases, that means you’re going to have to negotiate.
Negotiating is a skilled art-form, and it doesn’t come naturally to many people. There’s a series of mind-games and techniques that will ensure you get the best possible price. When your entire budget depends on those prices, you’ve got to take the plunge. Here are some of our top tips.
Build a strong relationship
There are two schools of thought when it comes to negotiating prices. The first is hard-headed technique. It means playing it very close to your chest, and demanding cheap prices. It’s all about the cold, hard sell. However, we’ve always had much more joy when approaching suppliers with a friendly attitude. You can still be firm when it comes down to the money. But take the time to build a relationship. They’re much more likely to cut you a deal or do you a favour when there is mutual respect.
What can you offer them?
Always look for the areas of mutual gain. Remember, they’re a business too. They’re also looking for the best possible deal. If you’ve got a strict, hard budget that they can’t match, look for other ways to please them. What else are they looking for? Maybe you can promise them the contract for you next big project. Always look at the deal from their perspective as well as yours. It helps you get inside their head and see where compromises can be made.
Research the product and the costs fully
It’s crucial that you go into the bargaining conversation with plenty of knowledge and research. When you call them up, show that you understand their product. If you’re enquiring about helical coils, show the supplier you understand the best type of metal for your project. It builds trust and respect because you’ve done your homework. It then leads you on to the next question, the cost. If you know roughly how much it should cost, you can make the first quote. If you can quote first, it’s much easier to negotiate.
Pay on time and have the deposit ready
It sounds so simple, we shouldn’t really have to write it down. But, always pay your suppliers on time. We know cash is tight on most construction budgets. However, if you ever want to secure a good deal with that supplier in the future, pay on time. If you pay late, they’ll remember. A warning sign will show next to your name every time you call for future projects. Again, this is all about good relationships. Show suppliers that you’re reliable to work with. Next time, they’re much more likely to help you out. After all, they know you’re good for the money. Lastly, have the deposit ready to pay immediately. It might be just the thing to secure the deal.
Getting a good deal on supplies is all about communication and trust. Build both with your suppliers, and your project will come in under budget every time.
