Knowing your competition is the secret for becoming an astute negotiator. All businessmen make it their business to know the competitors they are dealing with. This knowledge gives you that extra edge while quoting the prices to the buyers. Are you competing with suppliers within your own geographical location, or are there players from other parts of the globe vying for the same orders? What is your competitive edge Vis a Vis competition and vice versa. Especially when speed to market is so crucial in a tough business environment, buyers do not have much time to haggle back and forth and bring down the prices to acceptable levels. You need to quote the right price in one shot, and you have to be accurate. If you over quote, you run the risk of losing the business to another supplier, and if you under quote, you lose money.

An understanding of the buyer margins can help you to hit the buyer targets more accurately in one go. More often than not, you may end up getting a higher price than you aimed for in the first place, and still make customer happy by meeting their targeted margin goals. What level of market your customer operates in e.g. luxury segment, middle segment or mass market? What profit margins do they need to make to run profitable business at their end? This keen business sense is similar to astute shop keepers in flea markets who quote the price by looking at the customer and estimating his ability to pay and purchase. You would have seen many sari shop owners, who will willingly open and show as many sarees to a customer whom they think will make the purchase and are reluctant to open even a few when they feel the customer is not going to make the purchase. This simply comes from knowing the customers well.

Last but not the least; great negotiation power belongs to a person who can think win-win. Armed with the knowledge above and even after being as accurate and detailed as possible, if your price quote is still not satisfactory enough from buyer target price, by all means make an alternate proposal to buyer. Give options with suggestions to may be delete a trim or change the fabric source or whatever it may be... but give alternative suggestions to meet and service the customer requirement in way which is win-win for both parties. Like Marlin Brando in Godfather when he says-I will make him an offer he cant refuse.

About the Author

Anjuli Gopalakrishna has spent more than a decade in the apparel industry, having worked with leading companies including J C Penney Purchasing Corporation, Tommy Hilfiger India Limited and Li & Fung. Her experience includes apparel marketing and merchandising, sourcing of home products, apparel, accessories and leather goods. She has extensive experience sourcing for US and Europe from sourcing destinations including India, Bangladesh, Sri Lanka, Vietnam, Madagascar, Pakistan, Taiwan and China. She is a Post Graduate in Fashion Management Studies from the National Institute of Fashion Technology Delhi (NIFT). She is now an independent consultant and trainer in supply chain merchandising to buying offices and garment exporters and also a guest lecturer at NIFT Bangalore.