Buyers and sellers in developed markets turn single transactions into long-term, mutually beneficial relationships. All that it takes is the power of understanding. The goal of maintaining a perfect relationship with the supplier today is to create profitability for all businesses involved.
I was visiting a trade fair for hardware furniture fittings. It was one of the more famous shows during that time – in March 1996 – and was held in Koln, Germany.
It was my first ever trip on business. My brother had suggested that I be there as it was the best place to meet suppliers from around the world, But I hadn’t done enough homework to know about the weather or the food available in Germany. But those five days did change my perspective of dealing with buyers and sellers…
Another thing I learnt was despite meeting sellers at the exhibition, it is essential to visit their production facilities, as it helps one understand the proficiency of that company. The price quoted at the exhibition may be a way to lure the buyer without knowing the quality.
A first-hand look
But when the buyer turns up at the production facilities, he will get to know the seller and his business better, and which in turn helps in building the bond between buyer and seller. Having a collaborative connection with suppliers will take time and resources, but is indeed helpful to get better future deals.
I have dealt with many suppliers through the years for buying sanitary fittings. When I am working with a manufacturer in China, the supplier sometimes increases the price due to different reasons. Its common knowledge that price rise is not appreciated by any buyer.
I try and get to the bottom of the matter to understand the reasons, which could vary from raw material and labor prices going up to the ever changing exchange rates. This helps me negotiate rates with the supplier. Similarly, when there is a chance as an importer to take advantage of the fall in currency, one needs to follow what’s happening in all the international markets.
Being a buyer, it’s very important to focus on bringing in mutual benefits and maintain a longer relationship with the supplier. The intent should be to see him as a long-term investor or partner. Placing a high value order definitely gives you and edge to get a better rate for the goods. But, sometimes, it’s not about the price but the quality of the products.
Pricing isn’t sole decider
My advice is don’t always be pushy about the price, as it may lead to the supplier giving you inferior quality products. It is essential to change the perception about a sales representative by not seeing him or her as a ‘time-waster’ but as a ‘business grower’.
Showing a bit of compassion can help in bringing out a better relationship today and a much greater deal tomorrow. I have been a buyer as well as an importer, but when I have been a seller, I have learnt an important lesson, i.e., that whenever you visit a buyer, don’t make a direct sales pitch, even though that’s the ultimate goal of the meeting.
One needs to gauge market sentiments, but most importantly the customer’s sentiments too. Start with a general question, and based on the tone of his reply, you can find your way out to present a sales pitch. Or give yourself some time and space and approach him later.
Not the time for ego
The salesperson should try and build a connection before initiating any sale. I vividly recollect my initial days scouting the Deira market, where I used to visit traders to sell our sanitary ware. There was this particular trader who threw me out of his shop when I went to make a sale.
But as word spread about my credibility as a dealer, the same trader called me back. The learning here is to keep one’s ego aside. Had I held a grudge, I would have lost out on a good opportunity which I have with him to date.
Over-commitment is a common mistake made by salespeople to impress their managers. But it is a bad trait. If the customer is requesting next-day delivery, as a sales person you have to be truthful enough to tell him that it’s not logistically possible and seek more time. This will help in building a longstanding relationship based on trust.
Every business can strike a stronger deal as long as you think it is for mutual benefit and that will work for the long-term. A buyer and seller relationship is like a marriage, which needs to be handled with lot of compassion, care and concern for each other… despite the occasional strife.
The writer is Vice-Chairman of Danube Group.