How to negotiate and set the right prices with a supplier?
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Setting the right prices with your supplier is the key to import-export and trade. Buying too expensive means reducing your margins and finding yourself in difficulty with the competition. Buying too low risks poor quality and a strained relationship with your supplier.
So, how do you negotiate effectively and set profitable prices for your business? In this article, we'll give you the strategies and techniques to get the best terms while maintaining a motivated and reliable supplier.
📌 1. Understand the price structure of a product
Before even discussing prices with a supplier , you need to understand what the price they are offering you is made up of . A supplier price generally includes:
✅ The cost of production (raw materials, labor, machinery)
✅ Logistics costs (storage, transport, customs)
✅ The supplier's margin (he must also earn a living)
✅ Possible local taxes
💡 Tip: A reputable supplier should be able to explain the cost breakdown to you. If they refuse or remain vague, be wary!
🏆 2. Find the right price range
Before negotiating, you need to have an idea of the market price . A good contractor does not rely on a single supplier but:
✔️ Compare several offers (3 to 5 suppliers minimum)
✔️ Analyze market prices (looking at what competitors are charging)
✔️ Calculate your target margin (including additional costs: transport, VAT, after-sales service, advertising, etc.)
🎯 Example: You want to sell LED car lights.
- One supplier offers €8 per unit and another €6.50 .
- You see that online sellers resell them between €29.90 and €39.90 .
- By including your costs, you aim for a purchase price between €5 and €6 to remain profitable.
💡 Born2Succeed Tip: Our supplier packages already include hand-picked contacts with optimized prices for resale.
🤝 3. Effective Negotiation Techniques
🗣️ 1. Never show that you are in a hurry
A supplier will immediately sense if you are a beginner or in a hurry , and will be less likely to give you good terms.
💡 Say instead:
✅ "We evaluate several suppliers before making a decision."
✅ "We are looking for a long-term partnership, we want to compare the best offers."
📦 2. Play with the volume
Suppliers prefer regular customers over small one-off orders .
💡 Tip: Offer a small volume test order, but indicate that you will increase the quantities if the partnership works well .
✔️ "We will start with a test order of 50 units, but we plan to increase to 500 units within 3 months if all goes well."
👉 Result: The supplier will lower its price because it sees the potential for large volumes behind it.
💰 3. Play on the payment terms
A supplier prefers prompt payment over installment payments. Use this to your advantage.
🎯 Technique:
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If you have cash available : negotiate a discount by paying part in advance .
"If we pay 50% now, can you reduce the price by 5%?" - If you want to secure your money : offer payment in several stages ( 30% upon order, 70% after receipt ).
🔄 4. Compare and compete
Never commit to the first supplier you come across . Even if a supplier seems perfect, ask for at least 3 different quotes .
💡 Tell him:
✅ "We have an offer at €6 per unit from another supplier. Can you match it or offer an additional benefit?"
📈 4. Calculate your final selling price
Once you have negotiated the best purchase price , you need to ensure that you remain profitable by setting a suitable selling price .
🔢 Basic formula:
💰 Selling price = (Total cost x 2 to 3) + fixed costs
✔️ If you buy an item for €6 , with €2 of costs (transport, storage, marketing) :
✅ Total cost price = €8
✅ Recommended retail price = between €16 and €24
💡 Tip: Look at competitors' prices to adjust your positioning. Don't be too low (too low a margin) or too high (risk of low sales).
🚀 Conclusion: Succeed in your negotiation and optimize your margins
Negotiating with a supplier is an essential skill for ensuring the profitability of your business. By applying these techniques, you'll achieve competitive prices while building a trusting relationship with your supplier.
At Born2Succeed, we have already negotiated for you! 🚀
Our supplier packages allow you to directly access the best prices and the right contacts , without spending weeks searching and comparing.
📦 Ready to get started? Discover our packages and start selling now!