Learn to Negotiate
I suggest that you negotiate right up to the end. Suppliers, for instance, might initially offer a “no charge” agreement for samples and literature. Negotiate to make it permanent. See if you can negotiate a price guarantee for X period of time. Always ask for rebates. Ask about trips, prizes, and points. If you don’t ask, they don’t offer. Some companies have in-house advertising assistance that can do for you what you would otherwise have to pay for. Find out if your suppliers offer window or siding certification training and take advantage if they do. We take advantage of those things so that when salesmen are in the home trying to earn a little more for a job, we can justify our price.
Here are some other things to think about:
Whenever you discuss or negotiate an agreement, get it in writing — even if it’s just an e-mail confirming what you discussed over the phone. We are not looking for long written documents in legalese, just something in writing from a person in authority.
Sometimes when you get a price increase, it’s a good idea to call the supplier to explain that you have a lot of jobs in the pipeline and that that requires the price increase to be delayed 90 days. I have found that suppliers are willing to accommodate me approximately 50% of the time.
Keep in mind that there are always product changes and product enhancements to be aware of. For example, if there is a siding line I’m handling, I want my supplier to know that I want to be the first to see the new samples and displays. When a prospect comes into my showroom, I want to be able to tell him or her that we’re the first in the market to have the product because we are that manufacturer’s main purveyor in the market.
The specialty remodeling category is a very competitive business, and it is never simply the price that matters. Try to have products that are exclusive to your market. If the perception is that my product is the best, is unique, and I have a competitive price, then I’m going to win every time. I need to go into the home with exclusives — products that my competitors don’t offer.
Why is it worth it? If you can save 10% on the cost of product, that will make a 5% gross margin difference. And remember: You can’t be a tough customer without being a good customer. —Ken Moeslein is the owner of Swing Line Windows, a home improvement company in Pittsburgh.
