Tips for small businesses to get the best supplier deals
Discover how you can get the best deals from your suppliers to grow your business in South Africa.
Small businesses and suppliers
Small businesses work with other businesses, also known as suppliers, providing services or products. Relationships with suppliers are important for the long-term success of your business.
So, if you’ve just started running your small business, you’ll need to know how to negotiate a great deal from your suppliers.
But, how can you make your small business more profitable by getting the best deals from suppliers?
We got great tips from Jen, the owner of Cyrus Farm Health Store, about how she manages her suppliers.
Read Jen's practical tips about dealing with suppliers.
What tips do you have to get the best deals from suppliers?
“I would say doing business with small local companies is usually better than doing business with big companies. So I would rather start with small little local businesses.
“Don't show any weakness. Just because your business is small, doesn't mean that you are less possible to do well. So stand strong. Don't let them push you around.
“I think a good working relationship goes a long way. Relationship building with the people that have been assigned to you. Also, communication is key. Ask questions. Find out stuff. Don't just assume they know what you mean. so yeah kid getting it makes life easier communication between us to you.”
How do you avoid unreliable suppliers?
“You need to find references if possible like on the internet. I mean you can go and search reviews on it on takealot.com or you can search reviews on makro.co.za or reviews on other websites for other suppliers.
"For example, one of my dairy supplies is Bandini and you can go and review Bandini. I mean they have got pages and pages of excellent reviews. So I think a little bit of research goes a long way.”
How do you maintain relationships with suppliers?
“I'm on their case every week. So I get to talk to most of my supplies weekly.
"I know all of their kids' names. I know where they love to go on holiday, that kind of thing. The fun outside of business is what keeps you maintaining relationships.
"At the end of the day, we are all people who will put their pants on the same way.
"I'm just down to earth with people. I've got great relationships with my suppliers.
"There is only one that I don't have a good relationship with. But I make sure that I'm extra caring and friendly every time I deal with that supplier. So he literally cannot say anything bad about me.”
Jen gave us some practical tips. Do you want to know more? Read on to learn more about dealing with suppliers.
Learn more about how to make the best deals with suppliers
Here are some more details on helpful tips for you to follow.
Set specific aims when negotiating with suppliers
Before you even start, put together a list of important issues for your business. These would include price, delivery, quality when to pay and so on. Will the supplier give you a discount if you buy in bulk?
Remember that you and the supplier should be happy with the outcome in the end.
Get to know your suppliers
Find out more about the suppliers and how much they would appreciate your business. The more the suppliers need you, the more leverage you have during negotiations. If the suppliers are monopolies, then they could be in stronger negotiating positions.
But, if you happen to be the suppliers' best customer, you are sorted. Always be sensitive to how much negotiation from your side they can handle.
Have you worked out a clever plan?
Write your plan down before you start to negotiate so that you can speak in a focused way. You will then know when you can't go further and must leave the deal. Emphasise your business’s strengths and know-how to defend its weaknesses.
How to negotiate
Begin by saying that you’re happy with certain parts of the deal and provide an agenda covering the main points. The supplier would do something similar.
Depending on how much leverage you’ve got, you can put pressure on specific issues. If you are negotiating a big deal, provide the most critical issues in writing.
Be aware of pressure tactics used by the supplier.
Importantly, when you agree on a point, confirm that you have it correct and write it down.
Don’t ever accept the first offer but provide a counteroffer in return. The supplier will then offer a revised price. If the price is too good to be true, start asking questions as to why the price is so low.
Double-check the deal - You find some items you don’t want from the price breakdown, which you could remove and save you money.
If you want to order bulk supplies, use that as a bargaining tool to get a great discount.
Always stay sensitive and don’t push too hard.
Check out the suppliers
Are they reputable suppliers? Can they meet all the requirements of the contract?
If that business is the only supplier, you need to ensure that the business is stable.
Contact other customers and get their references for the suppliers if possible. If the client doesn’t want you to contact his previous customers, be suspicious.