How to negotiate with a vendor for an apartment society?
One of the best ways to get the right deal for an apartment society is to negotiate with the vendor in a tactical way. There are two ways wherein one can get a deal from a vendor;
Bidding:
A bid or a bid contract is an estimate of the total cost. In most cases, individuals or companies interested in hiring a contractor for a job will review multiple bids before hiring. It is important, when requesting a contractor bid, to be specific about the required materials as their price must be factored into the bid. It is very important to look into the reputation and record of the people behind each contractor bid.
Proposal:
A proposal refers to a contracting method in which a solicitation is made through a Request for Proposal (RFP) and a contract is awarded after discussions with vendors regarding the price and time acceptable by the receipt of proposals.
Tips to negotiate with a vendor:
- Remember, all things are negotiable
- Inquire as many questions and get referrals from as many people as you can.
- Have some basis to support your negotiation.
- Research on the information before you enter into negotiations with your current vendor.
- Negotiate with various options to the vendor if he hesitates at the proposed payment terms.
- Work out the terms that contain a favorable solution for both the parties.
- Be firm and persistent, but reasonable.
- It is important to meet the seller in person instead of handling the negotiation processes by phone and fax.
- When you begin negotiation, ensure you have other vendors ready who offer the same price or a little higher.
- If the seller doesn’t bring the price down as much as you had hoped and you think the vendor rate is reasonable rate, agree for the rate.
- Initiatives shouldn’t accept a vendor’s standard contract “as is.” Before that, they should carefully scrutinize all the terms and conditions and request the adjustments to make the contract more equitable for both the parties.
- Comparisons of performance to industry peer groups are often useful to better understand the value proposition put forth by the vendor.
- Enterprises must do their homework and should seek several competitive bids, using the request for quote (RFQ) or request for proposal (RFP) process to bid on the acquisition for products or services that are in competition with one another.
- The more you know about the suppliers’ “list prices,” discount schedules and maintenance-pricing models, the better prepared you will be to leverage the information to obtain better pricing.
- It is important that one mentions on how long they have worked with the vendor, how often they utilise the vendor’s services and the likelihood of future work.
- Expectations should be quantifiable and specific. Penalties or rewards must be included to ensure effectiveness.
- Enterprises that take the time to investigate the financial health and viability of the vendors with which they expect to do business will minimise their own financial risks.
- Make sure you know whom you are dealing with.
- As a last resort, threaten to stop purchasing or using the current vendor’s services if the representative is not willing to negotiate better payment terms.
