When it comes to your business, your ultimate financial goal is to be in the black as much as possible. Your profit margin can sometimes literally be the difference between closing up shop or making it another year. So naturally you want as much profit in the books as you can get.
One thing going against this, though, is how much your vendors are charging you for the products or services you’re buying from them. The more you spend on your vendors, the less you’re ultimately pulling in, and the less you have to spend on improving your business.
Most of us know to shop around when it comes to utilities and extras like cable TV, but we sometimes forget to do the same when it comes to our business. If you want to increase your profit margin, it may be time to take a look at your vendors and renegotiate a deal.
They Want To Keep You
If the vendors you use are worth their salt, they know they have to stay competitive to survive. They also know they need every last customer that walks through their door (virtual or otherwise). So when somebody calls up and says they’re unhappy with their prices, they have to make a quick decision.
What’s that decision? The same as any business: do I work with this person on how much I’m charging them or do I kick them to the curb? As you assuredly already know, that’s not an easy decision to make. You don’t want to lose a customer, but at the same time you can’t just hand out discounts or new contracts all day long.
However, if you’ve been working with a certain vendor a long time and have a decent relationship with them, they’re more than likely going to at least listen to you. Business owners know the difficulties and challenges of owning a shop, so they’ll understand your plight.
Don’t Just Expect a Big Cut
There are several other things you can do to help ensure a better price from your vendors. Begging and pleading might do the trick once in a while, but in general doing someone a favor goes a lot farther.
For instance, some of your vendors might actually show up to deliver their products to your place of business. Instead of standing idly by and watching them work, offer to lend a hand. If they’re close by enough and you’re willing, lend a hand at the store once in a while in cases when they’re backed up.
At the very least make sure to recommend them – find the vendors on Facebook, Yelp, etc. and write favorable reviews. When you hear a fellow businessperson needs what the vendor sells, point them in the right direction. Make sure your colleague mentions your name!
And finally, don’t just ask for price cuts. Perhaps you really are getting the rock bottom deal. Instead, ask for longer repayment terms, a lower interest rate, a dedicated account manager, or another perk that makes your life easier and saves your business money in the long run.
Remember, scratching a back generally works better than just asking out of the blue. And after all these favors the vendor might be knocking YOUR door down trying to give you a discount!