Negotiating With Buyers Like a Pro
You probably think the photo here must surely be an exaggerated analogy. But this is only because your physical life is not really at stake when a retailer takes advantage of you. It’s just a business, after all. Yet, I continue to work with clients who narrate their relationship w/key accounts as if they were being held at gunpoint by a Leviathan retailer they cannot challenge, they cannot ask anything of, and that they have no hope of persuading to their advantage.
Guess what? They’re right! If you assume that you cannot negotiate with buyers because you’re small, you just have to take whatever they offer you; then your business is their hostage. You may even engage later in a Stockholm Syndrome-like rationalization…“Look, the margins are OK, and our volume will increase. It’s good enough… this year.”
Yet, you’ve ceded control over ALL the critical variables to the buyer when you do this…and you have asked for nothing of what you need for long-term strategic success.
You didn’t even give yourself the option of standing up at the table, saying “No,” and walking away from an unreasonable buyer who is simply out to collect onboarding fees…or just get you out of the room quickly.
If you don’t gain the right kind of access to a retail account, you will gain a surge in volume that hits a wall and may honestly peter out. If it hits a wall, you will at least have time to re-negotiate. But, since you have already allowed yourself to be taken hostage once, that re-negotiation will be all the more complicated if the same buyer is involved (pray they got transferred).
A very famous innovator in food built his first brand by literally asking the buyer what they’re looking for in snacks. Then he built it with them, giving them initial first access to it. This is NOT an approach you’ll want to use, but it does contain the core principle of excellent negotiation: buyer empathy.
Too many founders new to the industry have heard so many horror stories anecdotally that they develop an adversarial mentality conducive to destroying a buyer negotiation, not nailing it. To avoid this, I urge you to adopt a negotiating technique from –Chris Voss –author of Never Split the Difference.
The first technique is called “tactical empathy.” You can establish empathy with buyers by acknowledging the amateur founders they have to deal with all the time. Rehearse your own take-down of the disorganized, unprepared founder and then shut up and let them vent. This will position you symbolically as more professional even if you’re not and even if they don’t vent along with you but just smile.
Wait for them to tell some stories of ‘loony founders’ and smile as they do…this positive reinforcement establishes a deep empathy very quickly. You need to establish that you care about their role and responsibilities as a merchandiser, even if they show little personal interest in your product line. Establish for the rest of the meeting that you are NOT a)disorganized or b) unprepared.
You can also build tactical empathy by understanding the retailer’s overarching strategy, knowing how your brand will help bring more money into their category/department or, better yet, into the store via increased store traffic.
The second technique you can use right away is to be someone they would not mind being stuck with at an airport for 6 hours. It’s called mirroring. It is the theatrical genius of America’s top sales professionals. Mirror your buyer in as many ways as possible. Dress according to how they dress. Use language they use. If they are stoic, be stoic. If they are bubbly, be bubbly with them. Be someone they want to do more business with. Most people miss this part because they’re too obsessed with pitching their baby. This requires doing research ahead of time, of course, but that should not be news to you, I hope.
Best of luck in merchandising land.