Negotiation Tips
Many food manufacturers find they have little formal experience or training in
negotiation skills, yet it is an area that they engage in regularly. Like other business skills,
negotiation has to be learned.
The key to successful negotiations is participating in negotiation training which will
provide an understanding of the process as well as assisting in developing the necessary
skills.
We’ve prepared some tips which should help you through the process:
1. Be prepared. In order to maximise success in any meeting, advance preparation is essential!
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What company are you meeting?
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Who is the buyer?
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What will their requirements be?
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Do I understand how their business operates?
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Can I contact other food manufacturers that supply this particular company?
2. Work out your pricing. During a negotiation meeting with a buyer, confusion can arise in the area of pricing and
discounts.
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Work out different price scenarios in advance of meeting the buyer.
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Decide on an ideal price that you would like to achieve, but also a ‘fall back’ price that will still ensure a
profit.
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In advance, calculate and be aware of the price below which you would be losing money.
3. Be confident. Many small food manufacturers can be intimidated when they go to meet a buyer and feel
grateful that the buyer has taken the time to meet with them.
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Don’t forget that as much as you need the buyer, the buyer also needs your product.
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You have many unique selling points (USP’s) for your product so make sure that you inform the buyer of
them. This will increase their desire to stock your product and will strengthen your own negotiation
position.
4. Take notes. It is critical to take notes and summarise during the meeting so that you are clear on what has been
agreed. Once the meeting has finished, it is always a good idea to send a short email to the buyer confirming the
key points that have just been agreed. This prevents any confusion at a future date. Don’t forget to keep your
handwritten notes on file so that you can refer to them at a later date if the need arises.
5. Size is an advantage. Many small food manufacturers can sometimes feel they lack negotiation power due to
the size of their businesses. Very often the opposite can be true. Most buyers are likely to be sympathetic and
understanding about the size of your business and, while their job is to get the best possible price for their
company, they will listen to your point of view.
6. Compromise. Sometimes in order to secure important business you may have to compromise on an issue that
you had not originally planned. The golden rule is never give anything away without asking for something in
return.
7. Help the buyer. Buyers are extremely busy and spend their day moving from meeting to meeting. You need to
bring solutions, not problems to the meeting. It is critical that you have worked out all aspects involved in getting
your product listed:
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How will my product be packaged?
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What outer cases will I be using?
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Can I provide shelf ready packaging?
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What is my logistics plan to get the product to the retailer?
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Have I met all the requirements for their central distribution?
8. Be professional. When going to meet a buyer, remember your product and your company are being
represented. Consider the following before the meeting:
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Do you want to make a formal presentation to the buyer?
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Have you brought some samples to the meeting for the buyer to taste?
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Do you have any media/PR articles to share with the buyer?
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Do you look professional in your appearance?
9. Summarise. It is always a good idea to summarise at the end of the meeting what has been agreed. By doing
this any misunderstandings between you and the buyer will be immediately highlighted. This can prevent any
problems or confusion at a future date.
10. Follow Up. At this stage, the meeting will have been a success! The next step will be to get the product listed
and this will entail a significant amount of administrative detail. Before the meeting finishes, clarify the next steps
in order to have a full understanding of requirements.
11. Be Relaxed. Many small food manufacturers can feel intimidated by the idea of going to meet a buyer. The
reality is that the majority of buyers are highly professional and will make you feel welcome and help guide you
through the process. Remember you are there because you produce a very good product and the buyer
recognises this and will respect you for doing so.