Fazley RabbiNegotiating with a business buyer is not a contest. Both sides want a deal that works, and the buyer is often simply doing their job by asking for a better price. To protect your margin, know your numbers before the conversation, decide in advance what you can and cannot give, and never give something without getting something back. Most margin is not lost in hard bargaining. It is lost in small concessions made in a hurry to close.
Know your numbers before you sit down
You cannot defend a margin you haven't worked out. Before any serious negotiation, write down three things.
- Your real cost to deliver. Not just materials or staff time, but transport, packaging, after-sales support, and the cost of waiting for payment. A buyer who pays months late is more expensive to serve than one who pays on delivery.
- Three prices. Your target price, the lowest price you would accept, and your walk-away point, below which the deal is not worth doing. If you are unsure how to set these, pricing from costs, value and competitors is a good starting point.
- Your alternatives. If this deal does not happen, what else is in your pipeline? A seller with other options negotiates calmly. A seller with an empty pipeline gives too much away.
For example, a hypothetical packaging maker in Narayanganj quoting a large, recurring order for a food company should know that a price cut that looks small on one carton can wipe out the profit across a whole year of orders.
Trade, don't give
The most useful rule in negotiation is this: every concession should be exchanged for something. The phrase to practise is "If we can do this, could you do that?"
| If the buyer asks for | You can ask in return for |
|---|---|
| A lower price | A larger order, a longer agreement, advance payment or a simpler specification |
| Faster delivery | Quicker approval of designs and samples, or flexibility on another item |
| Longer credit terms | A slightly higher price, a smaller first order or shorter terms until trust is built |
| Extra services at no charge | A longer commitment, an introduction to another buyer, or a customer story once the work is done (with their permission) |
Trading keeps the deal balanced, and it shows the buyer that your price reflects real costs rather than a number you made up and are willing to drop.
Handling the discount request
When a buyer says, "Can you do better on the price?", don't answer straight away. First find out what is driving the request.
- Ask why. Is it a fixed budget, a competing quote, or an internal rule? In some companies the purchase team is expected to show that every supplier gave something.
- If it's a competing quote, compare line by line. Cheaper quotes often leave things out: delivery, installation, training or quality checks.
- Offer to reduce scope instead of price. "We can meet that budget if we start with two branches instead of four."
- If you do give a discount, make it specific and conditional. "For this first order, if paid in advance" is very different from a permanent cut.
Watch payment terms as closely as price. For many Bangladeshi suppliers, long credit periods and late payments hurt cash flow more than a modest price reduction would. A deal at a good price that is paid months late may still be a bad deal.
Firm on numbers, kind to people
Negotiation is the start of a working relationship, so be firm about terms and respectful towards the person. Don't bluff about offers you don't have. Buyers often find out, and trust is hard to rebuild. When you agree something, put it in writing the same day, in plain language, so there is no confusion later. For contracts with real legal weight, ask a lawyer to review them.
When to walk away
Walking away is a legitimate outcome, not a failure. Consider it when:
- the buyer insists on a price below your walk-away point;
- the payment terms would strain your cash flow;
- the scope keeps growing while the price stays the same;
- the pressure or tone suggests the working relationship will be difficult.
A graceful exit sounds like this: "We can't do it at that price and still deliver the quality you need. If things change, we would be glad to talk again." It is surprising how often buyers come back.
Before your next negotiation
- Have I worked out my real cost, including payment delays?
- Do I know my target, my minimum and my walk-away point?
- What can I trade, and what do I want in return?
- Can I offer a smaller scope instead of a lower price?
- Will I confirm the agreement in writing the same day?
Negotiation usually starts when you send a proposal, so it helps to write that proposal clearly and to handle objections calmly before price comes up at all. If you would like help shaping your sales process, you can get in touch.