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How to Negotiate the Lowest Price with a Service Company

Getting a good deal for a service can be very difficult to do if you are in a bespoke area of business. So for example, who is to say what a fair price is when you are recruiting a new manager? Do you pay 25% to a recruitment agency or 10%? Should you have a rebate of 12 months or 1 week? What additional deals can you get thrown in – is it fair or reasonable to expect the agency or service industry to give you extras free of charge?

Negotiating to Win for Both Sides is the best way to go about it.
Negotiating to Win for Both Sides is the best way to go about it.

The key to negotiating is to think carefully about your bottom line. For example, if you have decided to recruit a sales manager and found someone particularly good via an agency, it would be foolish to try and negotiate to such an extent that you force yourself into a corner, annoy the candidate and end up pulling out altogether due to your own pride or stubbornness. However, if you are only half-minded to recruit, then there’s nothing to stop you going the full hog as advised below.

Firstly bear in mind who you are dealing with. If you are negotiating with a salesman then chances are they are going to be very keen to complete a deal with you. Firstly they are not really going to care whether or not the price drops in order to get the sale because they will get commission on the sale whether the price drops or not. However, if you are dealing with the owner of the business, bear in mind you will be dealing with a considerable amount of pride and self-respect. This has a key part to play in any negotiation because pride often prevents business owners from concluding deals that they feel are disrespectful to both themselves and the business they are running.

The time to try and negotiate is when you have expressed an interest in a particular candidate or particular product or service. It is no use trying to negotiate right at the start because the supplier has nothing to lose. Take a contract for supplying a photocopier. If you telephone the photocopier company and say that you are looking for a photocopier but are only prepared to pay 10% less than the price the company are charging, it is unlikely you will get anywhere in a hurry. However, if you wait until a salesman has been, shown you the photocopier, discussed a price, waved a contract at you and then indicate that you expect the price to be x, chances are you stand a better chance of success.

Better still, be prepared with evidence of lower prices elsewhere. Evidence of lower prices elsewhere indicate that maybe the price you are being charged by a company is wrong and it puts doubt into their mind. If you can demonstrate to them that you have better deals being offered elsewhere, then it is more likely they will conclude a deal with you at a lower level. However do not expect the company you are trying to negotiate with to go straight down to the level of any other company. Bear in mind that it is likely that each product or service is bespoke and chances are there will be a difference with each and every deal that particular company gets.

Finally, if you want to go the whole hog and negotiate the price down as far as possible, you need to consider the Blitzkrieg option. This is to wait until the deal is done, agreed but nothing signed (for example you have offered a candidate a job, the candidate has accepted, handed in their notice and agreed start date) You then go back to the agency ort supplier and inform them that you will not be paying their fee at the level indicated but instead expect a 50% discount to conclude the deal or you instantly pull out. This arrangement is the absolute top way of getting a discount on a service supplied. It is also guaranteed to annoy just about everybody, give you a bad reputation and result in a lot of good will not coming your way. Bear in mind that prices by suppliers are set for a reason – everyone wants to make money and it is just a question of how much money anyone wants to make on a particular occasion as to whether a deal can be concluded.