How to negotiate price with a supplier – with sample email

If you sell pre-made products for your small business, you likely rely on wholesale suppliers. It’s important to maintain stock of your goods to satisfy customer demand and sustain profitability. 

But the products also need to be affordable for you to charge customers reasonably and still earn a profit. To do this, you may need to negotiate with suppliers through email to reduce or adjust the cost. But if you’re unsure of your negotiation skills, we can help. 

This guide covers how to negotiate price with suppliers (plus a sample email), including:

• Doing your research 
• Using the right tone
• Explaining your situation clearly
• Suggesting a solution 
• Providing incentive 
• Sample email 

If you want to know how to negotiate price with a supplier, you’ll first need to do a bit of research. Make sure you know the full situation and your argument. So start getting to know your supplier, what they offer and who they are. The more you understand them, the easier it will be to appeal to their interest in your negotiation. 

Then, conduct market research to get a good idea of the average price points for your product. How much does it cost to produce? If you ask for too low a reduction that the supplier doesn’t earn anything, they won’t accept. Comparing the supplier’s pricing to others will help you negotiate fairly, making it easier for the supplier to agree.  

Plus, find statistics about how much you can sell products for, considering competitors and demand. This information can help you understand how the business expense will affect your profits. While you research, keep in mind how to persuade suppliers or what incentives will win them over. Is there a cheaper option to leverage or a deal you can put forward?

Once you get a complete idea of the supplier and your negotiation standing, you can start writing an email. But you’ll need to consider your tone throughout the message. Be sure to remain respectful, friendly, and professional in your request. Instead of insisting on it or blaming the supplier, take an upbeat angle. 

Take the time to wish the recipient well and compliment the business. Then, outline the situation clearly and firmly without sounding harsh or vague. Instead of writing, ‘I wondered if’ write something like ‘I can offer you.’ You want to form a deal that works on both ends, and ideally, create a lasting relationship with the supplier. 

An essential part of how to negotiate price with suppliers is explaining your situation and request clearly. Be sure you include the critical information of the negotiation. Why do you need to reduce the current pricing? For example, their current quote might be out of your budget. Or you may negotiate a payment plan because your cash flow won’t cover an upfront payment. 

Then, explain how much of an adjustment you need precisely and what you will pay. For example, maybe you need a specific percentage decrease. Or you may want to suggest a price for a particular order size. If you ask to pay an order in instalments, outline how often you’ll pay, how much each payment will be, and when you plan to pay the total invoice by. 

This is the section where you outline your negotiation terms, so make sure you do so in an organised and concrete manner. If you’re vague about your negotiating terms, it’ll be hard to reach a quick agreement. 

Finally, outline what you can offer the supplier, so they’re more likely to accept your terms. Providing incentives within your negotiation balances the agreement to show it’s a two-way street. If the supplier helps you, you’ll help them in return. 

For example, you could suggest a contract to exclusively use this supplier for your business. This way, as your business grows, the supplier can earn from you continuously and increasingly. Alternatively, you could promote or refer their products to other buyers. 

Dear Leah at Wholesale Coffee, 

I hope your week is going well. I wanted to reach out to say that I look forward to doing business with you. My customers have loved the coffee beans we’ve purchased from you so far. Your 5 kg bags are slightly more expensive than larger companies. But there’s no doubt in the quality and I prefer to serve the best at my shop. 

With that said, my current budget at the Beanery Coffee Shop cannot cover your current pricing. For this reason, I ask that you reduce the pricing by 10%. If you agree to this pricing, I would like to use your wholesale coffee services as my exclusive supplier. This would lead to consistently high quality for my shop and continuous investment in your business. 

Thank you for taking this under your consideration, and I look forward to hearing from you. If you agree to the 10% reduction, I’m happy to put in an order this week. 

Thank you, 

Mary at the Beanery Coffee Shop

Countingup is the business account and accounting software in one app. It automates tasks and helps you closely monitor your profits to negotiate with suppliers smartly. 

For example, the app generates cash flow insights, allowing you to track what you spend and earn and how well you cover financial obligations. With this information, you can stay on top of your finances and make better business decisions. 

Save yourself hours of accounting admin so you can focus on growing your business. 

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