The current market is becoming tougher and tougher to trade in. Two years ago it would have been unthinkable for Tesco to have issued a profits warning. Since the last economic downturn there has been consolidation in most industries and sales and profit growth has become extremely difficult to come by. Although there is lots of talk about fierce competition, most customers are still maintaining their margins (probably at their suppliers’ expense) and it may be that the price war has not even started yet!
The problem is, not only is business becoming more concentrated in fewer customers, those customers have access to much more robust information. In some cases they have better market insights than their suppliers which have led to a significant alteration in the balance of power.
Not only that – any pretence of collaboration has gone out of the window and we are returning to a win lose scenario as customers try to get suppliers to support their margins. Many sales teams and even some company directors have never had to manage an environment of this ferocity before, and it is likely that negotiations will become more frequent and more acrimonious.
This pressure will not go away and some suppliers have just about reached breaking point.
The Bottom Line?
You don’t get what’s fair – you get what you negotiate!
Let this 30 Day Challenge walk you through the sales negotiation process: