How to trade any product?
Purchasing management

How to trade any product?

Negotiation is omnipresent and indispensable in business relations. Indeed, whether it is in real estate to negotiate the sale price of a house or a flat or to negotiate a mortgage with the bank for the purchase of a new home, negotiations are involved. This commercial negotiation also exists in the restaurant industry. It is necessary to negotiate with each supplier in order to limit the cost of purchasing articles and thus increase the margin on these articles when they are sold.

How do you negotiate your food or other products? This is one of the first steps to improving profitability. By starting to get better purchasing conditions, the impact on the margin can be enormous. That's why it's important to learn some techniques and tricks to get a better price. In this video you will discover a little secret technique to get better results quickly.

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How to negotiate face to face with the supplier? The supplier is often better trained than the buyer and knows the psychology of negotiation better. With a few simple tips you will get much more out of the deal than a natural discussion. The method is simple, but the steps must be well sequenced to achieve the optimal result.

So how do you negotiate anything?

This is an article on negotiation. Previously in other articles, we explained how to improve your gross margin. And the last point was how to negotiate well with your suppliers. This article describes a powerful negotiation technique that will allow you to reduce your purchasing costs.

In this example, you are in discussion with a supplier. The price of the item under negotiation is not defined.

1 - Never make the first offer

You should never make the first offer. Let the supplier make the offer to sell before you talk about price.

2 - Leave the first offer to the supplier

For example, you negotiate the purchase of a food product. To begin with, he offers you his first selling price: €20 per kilo.

3- Always answer in the same way

Answer in the following way: "How can I pay 20€ if ...Y.. (here you must replace the ... with your arguments)

Y can be so:

  • the menu is 20 €.
  • We compare this dish to some other dish
  • I have already negotiated my selling price with my customers

You have to stay in a friendly tone and never talk head-on about the price. Only say in a slightly roundabout way that the price is much too high. (Don't forget that this is a game.)

4 - Silence waiting for the seller's (commercial) response

Then keep silent to get a response from the salesperson. Silence is very powerful, more so than you might think. No one likes silence and when the salesperson sees this, they will obviously try to fill the silence. He will probably come up with a second sales offer.

5 - Second offer from the salesman

So, if you don't say anything, the seller will offer you a second, more suitable purchase price: for example, €18 per kilo.

6- Making an offer that must be refused

Then, still do not accept the price and make your first offer. You make an offer that must be refused. For example, you offer a price of €12 per kilo. You know very well that the salesperson will refuse.

7- Silence again

Leave a long silence to wait for a response. Now the salesman should make you a third proposal?

8- Third proposal of the transferor

Tired of your silence, he will offer you a third price, for example €16 per kilo. The salesman should argue by saying: "this is my best price", "I can't do better". He will find all sorts of arguments, "my boss will say that I have exceeded the limit", "you are very hard!

Salespeople have their own negotiation techniques, don't worry, they are much better than you. And anyway, even if you feel a little guilty, they will always be better than you. They also use negotiation to increase their margin on the sale.

In addition, these are often much larger companies than yours in general and they train their teams for customer sales.

how to trade any product

9- Do not let go

With this third €16 price offer, you take a calculator out of your drawer or a small piece of paper with a pencil. Then you pretend to do some calculations and finally you come up with a precise number. For example €15.80. A very precise number to show him that :

  • you can't do better than that,
  • you've been calculating as accurately as possible,
  • this is the last offer

You make your last offer at 14,80€ and you don't give up.

Then, during the negotiation, you don't talk about the price. Talk about all other points and elements except the purchase price.

For example, if this supplier wants to deliver on Wednesday. You say to him "I saw that you deliver on Wednesday and I absolutely must be delivered on Thursday" and you remind him every 5 minutes: "I absolutely must be delivered on Thursday".

Find an argument he can't satisfy you on.

You know he can't do it, you repeat it so he knows he can't satisfy you on that point. And the last resort for doing business with you is to offer you a better price. He knows he can't deliver on Thursday, so he has no choice but to offer you a better price.

So, show that you can give up other criteria except price to show that this price is really a limit not to be crossed for you. You will yield on the delivery day, on the quantities, on the delivery schedule, on the invoicing but never on the price.

Conclusion: How to negotiate?

In conclusion, this technique is one method among many others. Also, the important thing is to practice and have fun. At the beginning, you are a little nervous, but with practice, you get better each time and the exercise becomes a game for both a good buyer and a good salesman.

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Koust allows you to optimize the profitability of your establishment.
The idea is simple: better control over quantities and costs by having more control over procurement and production.

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