Supplier Relationship

The ability to supply products that efficiently satisfy consumer needs and expectations requires a skillful buyer with a high degree of professionalism.

A buyer must have the appropriate knowledge and skills to purchase the goods most suited to their target market at the right price.

Creating on-going partnerships with suppliers and strategies to cover any supply problems that may arise will enhance the profitability of your store. Without goods to sell, a retail business cannot exist.

A good working relationshop with suppliers is essential to ensuring that the store is able to provide the products that customers want at the time they need them.

What is Negotiation?

To many people, 'negotiation' means applying all the pressure that it takes to force the other party to accept your terms. Often this involves a win/lose situation to bargain for the cheapest price without regard for the supplier.

In reality, it should be seen as a process that creates a win/win situation where both parties make concessions to reach an acceptable agreement that achieves the best possible result for both. Negotiation is:

• The process where people meet to seek agreement that provides mutual satisfaction on issues of mutual interest and/or concern
• The use of knowledge, time, and power to influence the behaviour of other people so you can achieve your goals.

Negotiation Skills

Sound negotiation skills will influence the profitability of your business and your relationship with suppliers. Careful preparation and planning by the buyer is essential if the buyer is to conduct an effective negotiation. The following is a useful checklist when preparing for a negotiation.

What is the purpose and desired outcome of the negotiation? What are the key issues involved? Price, supply, exclusivity? How much time is available for the negotiation? Is there any common ground? Are there any possible concessions you could make? Who has the most power in the relationship? What is the nature of your relationship with the supplier to date? How does this seller's credibility compare to other suppliers? What expertise/resources are available to you? Are there any economic or financial risks associated with dealing with this supplier? Are there any special issues to consider? Cultural, Legal, Ethical Have you prepared a negotiation strategy or agenda for the meeting?

The Buyer as a Specialist

In most retail organisations buying is a specialised function so it is unlikely that you will be involved in the buying and negotiation process to a large extent. This section is not designed to make you a skilled buyer. It merely provides a background on some of the issues that a professional retail buyer must address everyday. For example:

Using a Suitable Supplier

The buyer must consider the following basic points when choosing a supplier:

Does the supplier and their products fit with our business image? How is their brand perceived in the market place? Does the supplier have the ability to deliver the quantities required? Are the trading terms compatible with our operations? What risks are involved with dealing with this supplier? Who else are they supplying?