Merchandising?Getting a Good Deal
by Loida Noriega-Wilson
When FORMER U.S. Secretary of State William Seward negotiated with Russia for the purchase of Alaska in 1876, was the price he paid fair? Wasn't $7.5 million too much to pay for ice?
I've learned during the course of negotiating prices for more that 25 years that time is the true test of a good deal. Remember when you found an item that was going to be the next best seller? You worked on the deal for weeks, maybe months. Through sheer persistence you negotiated the price you wanted. Then the delivery was late—so late you missed your selling window.
What happened? Unreliable vendor, of course.
Or what about when the goods arrived on time but you couldn't sell them because the quality was not what you specified and not to your company's standards. What happened? Unreliable vendor.
Then there is the story you love to tell: the great deal you made that was the No. 1 best seller that season. Everything was perfect ... except for the low profit margin that we won't discuss. We've all had these experiences.
Let's talk about "widgets." You're the widget buyer for your company, and you've just developed the best widget of your entire career. Now you must get it made and delivered before Christmas at the price you want. Only one problem: You're not sure what the best price really is for this product.
Following are six steps to negotiate the best possible price for your widget. I've tested these steps and found that whenever I don't follow my own rules, I always lose. I've used these rules when training new buyers, and it gives them a guideline for successful negotiations with their vendors.
#1: Do Your Homework
This is the most important and the most time-consuming rule to follow. But it will lay the foundation for all your negotiations. Consider the following questions: