Are Buyers Shaving Your Margins

Are Buyers Shaving Your Margins

Have you noticed the changes taking place in how buyers negotiate around price? Today’s negotiations are more pro-longed and the agreements reached short-lived.

Shrewd buyers have learned that negotiation is like salami – the best way to get what you want is slice by slice. Achieving the lowest supplier prices requires an aggressive and sustained approach over time.

Buyers are continuously looking for more but willing to pay less. They are eating into supplier margins directly by looking for price concessions, but also indirectly by altering contract terms; such as service level agreement levels, or payment terms (e.g. from 35 to 45 and to 50 days!).

Negotiations can seem un-ending with downward negotiation of the tender price by the manager-buyer, followed up by a round of further negotiation by procurement. It is aptly called The Salami Technique.

We have written a whitepaper on handling The Salami Technique here, or you can read the summary on our Buyer Insights portal.

The ASG Group specializes in helping sellers to communicate their value and protect their margins. Please contact us if you would like to explore way of boosting your sales negotiation.