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Price negotiation is for the organization to reap maximum benefits, while settling the differences between the two parties.
Substantial increase in Purchases (such as volume lines) & having opportunities to grow (future business growth) are text book advantages. Why I call those are Text book advantages is every company will look for such options to negotiate.
Knowing vendors weaknesses will give you an edge over others to put forward "Taylor made" proposals not only suit their price levels & supply chain but matching the budgetary commitments.
eg : If cash trapped company ( you came to know this weakness) could offer advance payments option for 20% discount on purchase price.
The multinational companies invest in business intelligence to find such weaknesses in opponents & make inroads to price negotiations & winning contracts.
a; Quality and supply/ demand would be a major factor, if you are purchasing large amounts for multiple units this would a factor. Ultimately we want great quality at a good price! good communication between both parties is vital.
b; Clients want great service and good prices - a companies reputation is very important! Happy customers will promote your company! a reward program for loyal customers, whereby you give a discount on a popular product could be a attraction for clients.
c; Vendors weaknesses could be a cash flow problem or to much stock or to little stock!
d; if your clients business is growing and they substantially increase there orders - I would re negotiate terms and conditions with clients, and determine what there current stock needs are! and work from their
Price
Value for money
Payment Terms
Quality
