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How to gain leverage in negotiations with powerful suppliers

On Behalf of | Sep 15, 2020 | Contract Disputes |

Small businesses around the U.S. understand the challenges of working with powerful suppliers. These corporations hold sway over entire regions, often becoming the only supplier of certain raw materials or manufacturing parts in the area. These near-monopolies have spent years buying out local competitors to gain total control over a region and its pricing.

Thankfully, entrepreneurs have several tactics available to help negotiate with these unassailable entities. The following methods can help small businesses throw their weight around and secure the deals they deserve.

Follow these four tips to influence deal-making

Small business owners and clever entrepreneurs use the following four tactics when negotiating purchasing deals with influential companies:

  1. Increase value to the supplier: Smaller businesses can increase their value to a partner by offering deals that provide more value with less risk. Suppliers will jump at the opportunity to secure a longer-term contract or deals for a greater volume of supplies.
  2. Change buying patterns: On the other hand, reducing orders to the bare minimum can send a clear message to suppliers hoping to overcharge their clients. Slimming down shipping costs between multiple sites can also help save money. Some local business owners may form a buying consortium to lump their orders together, securing volume-based price breaks.
  3. Work with a new supplier: Finding a new supplier requires research and time. Competing suppliers might need convincing to take on a regional giant, but small businesses can entice these neighboring companies with low-risk, high-value deals. Ambitious entrepreneurs might want to vertically integrate and produce the supplies themselves. If a partner sees their client make a concerted effort to expand production and become a competitor, they may reconsider their bad offer and reduce prices.
  4. Explore legal recourse: If all else fails, business owners may consider legal options. When facing a damaging rate increase, companies can ask to review their partner’s finances to confirm an explanation. A well-positioned subpoena into the books will cause any large company to think twice. These giants fear government regulation more than anything.

Facing a bad deal? Consider new legal representation

Local business owners facing the losing end of a new contract find success working with lawyers experienced with business and contract law. Attorneys can help navigate laws across state lines, draft equitable agreements and work with government regulators.


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