More on Pricing: What I Learned from Purchasing Managers
Early in my career, I had a job at a company where the purchasing manager gave a seminar for the sales staff. This particular purchasing manager was smart, professional, ethical and a tough negotiator.
He didn’t lie about having lower prices, and I think he was representative of most (but not all) purchasing managers in his approach. But, he could lead an unsuspecting sales rep to make faulty assumptions. With comments like, “That price isn’t good enough.” or even, “I need you to do better.” he might lead a rep to react. Be careful. Don’t assume.
Or, he might just sit there and frown.
There are a lot of areas that are open to negotiation—credit terms, delivery schedules and minimums, lead time, inventory programs, order sizes, etc. You might have the highest price, but offer advantages in all of the other areas. The buyer may still ask you to match a lower price, but you might not need to if you offer other benefits.
Or, you might actually have the lowest price, but not the best terms. If you are asked to match delivery, credit or other terms, be sure to know where you stand on the total offering.
Don’t be afraid to ask.
Some purchasing managers will tell you where the competition is. Others think this is unethical and unfair to your competitors. But either way, you can get valuable information if you know how to ask and let the purchaser know it is in his/her best interest to help you.
Why would any buyers want to help you? That’s easy—they will want to help you if you are the preferred supplier.
- You work hard to understand their business and solve their problems.
- You are reliable.
- You provide good service.
- And your company provides good product and good service as well.
In other words, you earn it.
In all of the market research I’ve done, “competitive pricing” is always a must have, but the “lowest price” is not.
Be preferred. Be competitive. Don’t be lowest.
Jack Miller is founder and Principal Consultant at Market-Intell LLC, offering Need to Know™ market intelligence in paper, print and packaging. Previously, he was senior consultant, North America, with Pira International.
Known as the Paper Guru, Jack is the former director of Market Intelligence with Domtar, where he also held positions as regional sales manager, territory sales manager and product manager. He has presented at On Demand, RISI’s Global Outlook, PRIMIR, SustainCom World and at various IntertechPira conferences. Jack has written for Printing Impressions, Canadian Printer, Paper 360, PaperTree Letter and Package Printing, along with publishing a monthly e-newsletter, MarketIntellibits.
He holds a Bachelor of Arts degree in Economics from The College of the Holy Cross and has done graduate studies in Statistics and Finance.