Not only does the average school procure from suppliers they have worked with the previous year but most take the first bid offered to them. Whether you’re pleased with your supplier, are too shy to negotiate, or simply too busy—taking the first price offered is likely costing you. School budgets are tighter than ever so these price negotiation techniques can help.
Even if the supplier you’ve considered has the lowest price and highest quality services, just asking for a discount almost always generates a 10% to 15% price reduction! Why? Respectfully, the average supplier considers schools to be recession-proof cash cows. They know that if they provide a quality product or service you are likely to rehire them next year. They’re willing to pay for your retention and loyalty.
Negotiations are a give and take, so ensure you offer your supplier something in return for your discount request. You may be wondering what you have to offer, as you’re the one hiring them? Not to worry, as what you have doesn’t cost a thing. The average customer is slow to pay their invoices, so most suppliers build payment delays into their pricing to ensure cash flow. Simply remind your supplier that you pay their invoices on time every month and use that as a bargaining chip to ask for your desired discount.
As a general rule, the larger your order quantity, the lower your price quote. So, use this as leverage. For example, request a quote for 20% less of the cleaning supplies you’ll require for the year. Then, when you receive your quote, offer to increase your order by 20% for a 10% discount. This strategy works almost every time.
The price negotiation techniques above are highly effective for school districts. However, they are only the tip of the iceberg. Save time and simplify every aspect of procurement by allowing The Procurement Co.to create strategic and custom tenders on your behalf. We present your detailed needs to suppliers, request line-by-line bids, and analyse and compare bids for you. This includes introducing you to a database of suppliers that may not currently be on your radar. The final decision is up to you.
There’s no need to be a pro to negotiate. Changing your mindset and applying these simple techniques will take you far! And if you’d rather avoid face-to-face interactions and prefer to send your negotiation requests by email that’s ok too. While the tips above will work almost every time, the average school saves 25% on their supplier contracts when working with The Procurement Co. The money you save can be invested back into your school to improve the quality of education for your students. Reach out to The Procurement Co. today if you’d like to learn more!