You obviously want to get the best deal practical for your organization. Sometimes, the most profitable scenario for your organization in the long term involves having a financially healthy supply base that is enthusiastic about helping your organization succeed.<\/p>\n
This means that it\u2019s OK to negotiate hard. But, in certain situations, it\u2019s possible to negotiate too hard.\u00a0Hard negotiation, however,\u00a0may drive the optimal supplier away, inhibiting your organization\u2019s long-term success, even if you did get a slightly better price from another supplier. Here are three reasons negotiating too hard may drive the optimal supplier away.<\/p>\n
\n- Your business won\u2019t be profitable for them.<\/strong>\u00a0Sure \u201cnumber of new customers\u201d is an important metric for sales organizations. But it is not the most important one. Often, profit is. That\u2019s the amount of money left after costs are deducted from sales. If you\u2019re pushing for a price that won\u2019t cover your supplier\u2019s costs \u2013 including direct and indirect costs \u2013 it won\u2019t be worth it for your supplier to accept your business.<\/li>\n
- You seem like a \u201chigh maintenance customer.\u201d<\/strong>\u00a0If your organization seems like the type of customer that will constantly argue over prices and billing, make unusual or lots of service requests, and generally require more attention than other clients, a supplier may not care to devote a disproportional amount of resources to serving you.<\/li>\n
- Your business will consume limited capacity that could be available to more profitable customers.<\/strong>\u00a0Not every supplier would be able to fill double or triple the number of orders it receives. Limitations on available facilities, workforce, or other resources may limit capacity for new business. If such a limit applies and your business appears to consume too much of that limited capacity for too little profit, a supplier may prefer to use that capacity in a way that results in more money that drops to its \u201cbottom line.\u201d<\/li>\n<\/ul>\n<\/div><\/div><\/div><\/div><\/div>