Just add value. That’s it. That’s all it takes.
Let’s pretend I offered you a pencil, and I said, “I’ll sell you this pencil for $2,000.” Hopefully, you wouldn’t buy the pencil. But, if your best friend was on their death bed, and I said, “The medicine that can save their life will cost $2,000,” you would find a way to pay—even if you didn't have a single dime.
What’s the difference between those two scenarios? The amount of money didn’t change. Either way, you were paying $2,000. So, what did change? Simple: the value changed. There’s an obvious difference between the value of a pencil and the value of someone’s life.
If you think in terms of value, you can win every negotiation. And when you win negotiations with this strategy, the other person wins, too. You don’t have to think about everything as an either/or situation – “Either I get more products with lower prices or I get fewer products with higher prices.” “Either I get a good deal for my money, or I get a bad deal that’s cheaper.” Move away from that either/or mindset and start thinking about how you can get the best of both worlds.
The key is understanding value. Specifically, you need to understand what’s valuable to the other person.
How to use value to negotiate with suppliers
Here’s an example: a supplier is offering you a minimum order quantity of 1,000, but 1,000 is way too expensive. 100 is the best you can manage, but the supplier might want a much higher price per item at an MOQ of 100. Instead of agreeing, try negotiating, and keep in mind what’s valuable to the supplier – trust and future business.
Money is only representative of value. To the supplier, the promise of trust and future business can be more valuable than the extra money you would spend on a smaller MOQ.
To build trust, be sincere, honest, and kind. Build a relationship with the supplier. It’s as simple as asking them how they’re doing and telling them you look forward to working with them. Basic kindnesses help build human connection, and that builds trust.
Trust comes first, because showing a supplier you can bring them more business in the future is based on trust. You can say something along the lines of, “I can’t do 1,000 yet, but I’m looking for a supplier I can work with in the future. If you’re willing to lower the MOQ to 100 for my first order, I will buy 2,000 in my next order.” Obviously, they have to take your word for it, and that requires trust.
How to use value to compete instead of cost
If you’re selling a house and someone asks for a discount, try adding value, instead. If the buyer mentions how disappointed they are not to get a fridge, washer, and dryer with the house, add those in. You haven’t brought the cost down, but you’ve added value, and the buyer will be more likely to agree to the original price.
You can also add value to your Amazon buyers. If you’re selling packing tape, and you have a lot of competitors, how can you add value to stand out from the crowd and draw customers to your product? It’s simple: consider what’s valuable to your customers. If customers get tired of scratching and picking at the edge of a roll of tape, you could provide a tab or holder to prevent the edge from sticking down. You’ve solved a problem for the customer and added value.
Instead of bringing cost down to compete, try focusing on value.
Imagine you’re a buyer. You’re shopping for guitars. You don’t want to spend more than $300 on a guitar, but you also need a how-to booklet for learning to play basic chords. You ask a shop owner if they would take $250 for a guitar listed at $300, but they say $300 is a firm price. So, you say, “If you throw in this how-to booklet at no extra cost, I’ll give you the $300.”
This way, you add value for both parties. The seller gets their $300, and you get the booklet you would have had to buy separately. Instead of lowering the cost, you raised the value. Value trumps cost.
Value is the most important tool in your arsenal when negotiating with suppliers, buyers, and sellers. Always think about how you can add value, not just for the other party, but for yourself, as well. Soon, you’ll be winning every negotiation.