The key is to build real relationships and make strategic commitments. The brand/supplier needs to believe you are serious and have a plan to grow their business over a number of seasons; they also need to believe in you as an individual who is credible enough to deliver what is being promised. On the back of a clear business plan you can discuss rebates and discounts around sell through performance, creating the mutual opportunity and advantage for you both. To begin that process it is often best to separate the negotiation from the physical buying process, creating a clear set of proposals that can influence the buy before you set foot in the showroom. As always it is essential to have a real alternative option, if you have nowhere else to go your negotiation will be very one sided!
If you are importing your products, then you are exposed to currency fluctuations, commonly the US dollar or euro. Between September 2008 and March 2009, the value of sterling dropped by more than 26% against the dollar and 20% against the euro, effectively making the average cost of the products you imported 23% more expensive.
Sterling has recovered a significant proportion of its earlier losses but is still some way off the highs it enjoyed this time last year. When negotiating with your overseas suppliers, current exchange rates compared to the rate agreed upon previously could help make substantial savings. What’s more, by forward buying your currency, you can lock in to an agreed rate for future purchases and guarantee that you will not be affected by exchange rate fluctuations for the duration of the forward contract.
It is also worth noting that your suppliers are almost certainly feeling the pinch too, as more UK companies are priced out of the market and forced to seek alternative suppliers (42% of small businesses surveyed by Moneycorp recently said that the impact of the pound’s volatility was ‘significant’ or ‘serious’). If your supplier wants to retain your business, they need to be willing to negotiate with you.
During our current “ credit crunch” we all need to work closely together to make sure we keep achieving our desired targets. Respecting our business partnerships is key to survival in this tough market place. My best advice is to talk with your suppliers as soon as possible if you feel you need to negotiate better terms and be open and honest about your needs. It maybe that your supplier can help with discounts or may have another way of working with you to give you the value you need. It is a partnership however and your supplier may well need support from you in terms of commitment etc.