What compels a supplier partner to agree to a reduction in markup from 39% to 36%? What impact does a 2.5% VMS fee have on a supplier’s margins and why do they argue that it is more than 2.5% of their markup? Are they right? And what arguments can the client or MSP make to a supplier partner that would be meaningful in a negotiation on pricing for a new piece of business?
These are all questions to which those of us who negotiate supplier pricing must have answers. Pricing negotiations, to be successful, must offer wins to both sides in the deal. You have to be able to get inside the business heads of your suppliers. When you do that, the result can be long and mutually satisfying relationships that produce qualified talent, recruited in a timely manner and at fair prices, for many years.
Every industry prices their goods or services via a set of variables that are meaningful to them, with each variable weighted in the minds of buyers and sellers. Understanding what benefits your suppliers is the first step in getting to a win-win outcome in pricing negotiations.
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