Resources | Customer Success | January 29, 2024

How to Negotiate With Buyers: 6 Strategies for Suppliers

Negotiating with enterprise buyers should never have to be a zero-sum situation. Here’s how to establish fair terms that reflect your value as a supplier.

Negotiating with enterprise buyers should never have to be a zero-sum situation. Here’s how to establish fair terms that reflect your value as a supplier.

If you’re a small to midsize supplier, gaining interest from a large enterprise buyer is an exciting prospect. But it’s crucial to enter negotiations strategically and ensure that you’re not making too many concessions, however valuable the buyer is to your growth and profitability. 

This may be especially challenging during inflationary periods when operating costs and interest rates are high. In these circumstances, buyers are even more likely to reject your offers and try to land more favorable terms. According to 2023 Forrester Research, nearly 9 out of 10 global business buyers reported stalled sales negotiations, with pricing as the primary influence on purchasing decisions.

This doesn’t mean that your business will always need to compromise to win enterprise customers — in fact, the best buyer relationships are ones that are founded on mutually beneficial terms that honor your value. Here are several ways to ensure that the relationship is fair and financially sustainable for both parties.

Mastering negotiations: 6 proven strategies for success

1. Know your value when coming to the table

Skilled sales agents will take the time to investigate buyers’ budgetary constraints, needs and decision-making factors, entering the process from a place of empathy and understanding. However, it’s equally as important to define your business’s own needs, boundaries and value proactively and use these as guiding principles. Otherwise, you may end up making inopportune concessions that will cost your business in the long run. 

Before meeting with buyers, start by outlining your business’s value propositions. How does the buyer benefit from your product or service? What makes your offering unique? Do they have few other alternatives? Be prepared to justify your value with specific arguments, numbers and evidence if the buyer objects to your prices and terms. You can also set a walk-away amount based on what your business can realistically afford and create an anchoring strategy to influence the buyer’s perception of your offer. 

2. Start with easy wins

It seems intuitive to tackle the most contentious parts of the sales process first, such as pricing and payment terms. However, this can further delay negotiations and quickly lead to buyer-supplier tensions. Alternatively, start with more agreeable points, such as shipping arrangements and delivery timelines. These early wins are a good way to create collaborative solutions, which build trust and rapport with the buyer. These discussions may also reveal helpful information that influences more challenging variables later on. 

3. Get curious when buyers push back

Buyers will almost always object to your prices, at least initially. Some may even be combative as a negotiation tactic. Rather than getting defensive, the best response is to stay calm and neutral, yet assertive. Instead of buckling to the buyer’s demands or counterattacking, make it your goal to understand their “why” and start asking questions. 

This is a smart way to learn about buyer motivations. For example, if they’re rigid about something, it could be because they were taken advantage of by a supplier in the past and are careful to avoid unfair terms again. Or their financial circumstances are making cash flow generation a key priority. In some cases, your point of contact may simply be trying to maintain control over certain aspects of the relationship.  

Knowing these variables will make it easier to come up with solutions that work for both of you, but you won’t know unless you ask. Pair your inquiries with reflection, recapping what you’ve discussed so far. This will show buyers that you hear their concerns, which will further diffuse emotionally charged reactions and build trust.

4. Focus on win-win outcomes

Concessions are an inevitable part of most B2B sales. The key is to make them slowly and strategically. If either party concedes too much, it won’t be a true win-win relationship. It’s better to approach the negotiations as a partnership where you can together build creative solutions that avoid unfair compromises. 

What is a practical way to apply this? Instead of giving the buyer specific options, make the conversation more open-ended. For example, you might want the buyer to buy more products in exchange for a certain price. Instead of detailing the proposition with a number that they can counter, state that you’d be more flexible if they consider scaling purchase orders. This involves you and the buyer in the problem-solving process, which is more likely to create an outcome that satisfies both parties.

5. Think beyond price

If you find yourself at a point where concessions seem unavoidable, try to think of nonprice variables you can bring to the table. The more options you can present, the better. Remember, the aim is to find a solution that optimizes the buyer’s return on investment without jeopardizing your balance sheet. For example, rather than focusing only on price, consider offering:

  • Faster deliveries or special services that make the partnership more convenient for the buyer.
  • More flexible invoice payment terms or early payment discounts. Many enterprise buyers already implement early payment programs such as C2FO’s Early Pay solution.
  • Research and development initiatives to give buyers a more distinctive, competitive product.
  • Volume discounts or bundles.
  • Priority treatment during supply chain disruptions or material scarcity.

6. Know when to walk away

Even if you practice these strategies, there may be times when moving ahead with a deal entails breaking your walk-away price or terms. If buyers are asking you to give up too much or you’re unable to afford the terms of sale, it’s OK to move on. 

At the same time, establish an open line of communication going forward and consider any remaining potential opportunities that could make the relationship work. While neither of you may be able to proceed with a contract now, it might be possible to start small, with a product trial or a one-off purchase order. This might not be the deal you initially hoped for, but it could lead to something bigger in the future. 

How to negotiate with buyers: the bottom line

Negotiating with enterprise buyers can be a tricky process that takes time and practice to get right. In today’s economy, it may be tempting to accept less-than-ideal terms to generate revenue — but it’s important to stay firm on the value you bring to buyers and be cautious about competing on price. When in doubt, take the time you need to develop creative, win-win solutions that will lay the groundwork for sustainable, long-term business relationships.

Negotiating business with a buyer? Find out if they support early payment discounts with C2FO.

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