You're trying to secure a deal with a hesitant vendor. How can you convince them to offer discounts?

Suppliers often hesitate on discounts due to three main reasons: low margins, customer risk, or working capital concerns. Understanding the root cause is key to finding a solution. Example: Overcoming Risk and Working Capital Issues One industrial supplier initially saw a customer as too risky. The customer demanded long credit terms and quantity guarantees, straining the supplier's working capital. We advised offering a price differential based on payment terms. The customer could get a 7% discount by paying upfront. This allowed the supplier to maintain their 5% margin even with the discount, while the customer got a better deal. A win-win for both parties. Customer is financing supplier at 32% solving their working capital issue.

At Makita Middle East/Africa, I led a critical security overhaul after discovering a severe vulnerability in our network. As the lead on a cross-functional team, I coordinated a comprehensive risk assessment and developed a multi-faceted remediation plan. We swiftly addressed the immediate threat while enhancing our long-term security posture with updated protocols and advanced threat detection. This experience not only reinforced our cybersecurity defenses but also highlighted the importance of proactive risk management and collaboration in overcoming complex challenges.

Convincing a hesitant vendor to offer a discount could damage your relationship in the long run. While offering discounts might seem like a simple way to win the deal, it could make the vendor feel undervalued, especially if they’re already hesitant. For example, they might question whether you're focused on price over quality, and that could hurt trust. They could also fear setting a precedent for future deals, making them less willing to negotiate later. Instead, focusing on long-term partnership benefits, volume commitments, or offering value in return might be more effective without eroding goodwill.

Here's a summary of the strategies to convince a hesitant vendor to offer discounts in 5 lines: Leverage volume and long-term commitments. Highlight the benefits of the deal for the vendor. Offer alternative payment terms or trade-ins. Use competitive pricing and negotiation tactics. Consider bundling or referral bonuses.

In a genuine negotiation, like the vendor shall not overpromise so should do the buyer. Don’t try promising the moon and the sky for future business in front of an immediate discount: no experience salesman will get this hook. If you are interested in the value proposition of the vendor talk with him frankly and try setting up a common roadmap in front of concrete deals. Think also about gaining your benefit (discount) in a stepwise approach in front of a growing volume of deals, to. Show there is commitment on your side to a win win solution. Finally think in term of value more than price: the vendor may be bringing to you significant benefits like reliability, reputation and so on which are way more valuable than a discount .

Look for a win-win with your vendor. Maybe there are times when the vendor needs to have the sales volume and you can accommodate your orders to meet their timeline. Developing that trusting relationship with the vendor is essential. Maybe you can help the vendor get new clients or beta-test products.

This is key: when negotiating think out of the box and be ready to have some of your contract clauses negotiated too. Make a list of the clauses/terms which you can’t deviate from and o e of the desirable ones and use the second to find optimization in the pricing, by evaluating which ones may influence the final price more. Sometimes just relaxing some contractual terms which you may want to include just because you always fiddling that, may be a very powerful optimization strategy. Finally don’t think in term of price but in term of value: spending a little bit more in front of your client satisfaction may be better than forcing the vendor to offer a discount and having him committed to do just the bare minimum.