What Is Price Negotiation?

Relevant parties consult each other on a certain thing or matter on a price issue of common interest to both parties, exchange opinions, seek solutions, find a price range acceptable to both parties, and the process of reaching an agreement is called price negotiation.

price negotiation

Price negotiation refers to the process in which related parties negotiate with each other on a price issue of common concern to both parties, exchange opinions, seek solutions, find a price range acceptable to both parties, and finally reach an agreement. Price negotiation, as the vulgar point is, is "bargaining." I believe that everyone is familiar with bargaining-it is indispensable to work with partners to bargain, and it is inevitable in life. Bargaining is the key link in the negotiation. From the perspective of the company, it can save one point and one point. In the tug-of-war of price negotiation in work, how to give yourself an advantage is believed to be the concern of many friends. Tian Zhuangzhuang, a senior consultant of Ask.com, shared his effective skills in price negotiation. ^[1]

Negotiations are all about the specifications and quantities of the products or services being traded, prices, delivery times, and payment cycles. The outcome of negotiations is more important than the initiative.

For price negotiation, naturally the less price we want to pay, the better. Of course, there is no absolute thing in the world, and sometimes the price cannot be bargained to drive the supplier to a dead end. If it is a long-term cooperation, pay attention to the goal of achieving a win-win situation. ^[1]

Different parties involved in business negotiations have different factors influencing their prices. The determinants of commodity prices are different from the determinants of service prices. The main factors affecting commodity prices are the following.

The pricing strategy includes cost-oriented method (variable cost + profit), demand-oriented method (how much buyers are willing to spend), market-oriented method (find similar products on the market as the benchmark), and so on. The cost of general commodity suppliers is transparent, and it is easy to calculate using activity cost analysis, or just ask your peers to inquire. For a product, how much is the raw material, how much auxiliary materials are used, how much processing time does it correspond to, and how much is the corresponding worker's salary, the same industry and the same product are similar. Calculate the profit on the basis, which is usually the low price of the supplier. ^[2]

"You can give me a little cheaper, I can buy cheaper in the market, if I don't reduce the price, I can only choose again", customers often use this sentence as the killer of the game. In the face of this trick, suppliers often succumb-just do it for the market. This is the case, and often only a small profit.

Is this client's killer really unable to catch it? Not really. How to pick up, listen to me!

One of my customers is a sealant. The quality of the coupling agent used is not high. Many domestic manufacturers can provide coupling agent models that meet his product requirements. When choosing a supplier, this customer has a great advantage. What he has to care about is how to find the cheapest supplier.

He has made inquiries to many suppliers who do coupling agents, and of course we have made inquiries in our company. The price of our company's products is considered to be moderate among these suppliers. His purchase is KH-550, and he is going to buy 300 kg first.

"You are manufacturers. They should have an advantage in price over other manufacturers. How can they be more expensive than some dealers?"

President Wang, I also think that the prices of coupling agents in the market are very different now. For dealers, my suggestion is that although you do not have high requirements for the quality of coupling agents, you must also ensure the stability of the products. The manufacturer who picks up the goods is not fixed, which one is cheaper. The stability of the product is definitely not as good as the manufacturer. You also hope that the product you buy has a good stability, right? "

"It won't be higher than them. How can the price of the dealer be lower than the price of the manufacturer?"

"Mr. Wang, the problem you said does exist. I will pay you a bill: we will supply you, and we will also give you technical guidance to ensure that you can achieve the best results when you use it; Invest in a certain amount of money to study the improvement of product quality and stability, so as to continuously improve the quality of our products and indirectly improve the quality of your products. The dealer will not spend money on this research, you said yes ? "

"Compared with other manufacturers, the price is not cheap! Other manufacturers can also provide these. You can give me the lowest price, if you can do it, I will get the goods from your side."

"Actually, Mr. Wang, you can think that the same product can be used and used very well. It is different. If your customers use your sealant, the requirements are not very high. I also suggest you find a cheaper one. Coupling agent; if customers have higher requirements for your product quality, then consider our products. After all, we are also OEMing Xinyue, and I have mentioned it to you. Of course, we invest R & D and control of product quality are more than other manufacturers.

"I also know Shin-Etsu, the quality of their products is really good. If you are cheaper, we will sign the contract. If it can't be cheaper, then we can only do so."

"I also know that President Wang must definitely consider the cost. Of course, our cost may be higher than that of other manufacturers. If this is okay, I will give you another 2 yuan per kilo. The cost on your side will be saved a bit. Our side Just take a quantity, and you can help too. The quality of our products is also here. In the future, if you use a lot, I will help you apply for a lower price from the company. "

"Then let me make a contract first, and then give me a discount when I pick up the goods. This time, let's see how large-scale production is."

This customer chose us for the first time. In fact, the final price is not very low, and there are still some profits. For this case, make the following summary:

1. It is normal for customers to request low prices. When customers talk about prices, we talk about other aspects. Try not to engage in a tug-of-war with the customer;

2. "Yes" first, then "but", that is, first affirm what the customer said, then display their reasons, so that the customer can understand the reasons for the high price of the supplier, and let the customer follow their own thinking;

3. Appropriately give customers some discounts. Under the premise of guaranteeing profits, appropriately lower prices for customers. A little less profit, a lower customer cost, and a smoother transaction.

In the game between suppliers and customers, if customers are asked to follow their own thinking, they tend to develop in their own favor. Even if you make some concessions in the end, you won't be too passive, just to ensure the market and only "small profits" remain.