How to Negotiate Buyer in Readymade Garment Business?

Buyer Negotiation in Apparel Business:

A successful buyer negotiation outcome does not mainly occur through luck but by following a clear process. The process reflects the various levels of knowledge of the subject of negotiation. A garment merchandiser has to do a lot of tasks to negotiate with the buyer. This article has presented a detailed discussion on buyer negotiation processes which are deeply followed in the readymade garments sector.

Garment buyer negotiation by merchandiser

Fig: Garment buyer negotiation by the merchandiser

Buyer Negotiation Process Followed by Garment Merchandiser:

An effective buyer negotiation can be made by following some key factors which are mentioned below:

  1. Researching the needs of both parties,
  2. Preparation,
  3. Offer,
  4. Discussion,
  5. Counter and revised offers,
  6. Summaries,
  7. Agree and commit.

All the factors have explained in the following:

1. Researching the needs of both parties:

The higher the knowledge a buyer has of their own and the apparel merchandiser’s requirements, the better able they are to construct an acceptable solution. The buyer must be clear about both the department mark-up to be placed on the product cost price and the intended retail selling price so that he can judge the viability of the garment merchandiser’s products. He should also have sufficient product construction knowledge to understand how changes can be made to achieve better value in the product.

Frequently the garment merchandiser will make suggestions to try to bring the cost price closer to the buyer’s target. However, an experienced buyer can speed up the process by making suggestions that will be acceptable to her. Lead time is another lever for buyer negotiation with differing operational issues for both parties. If the buyer starts the sourcing process early enough he may have enough time in hand to use extended lead time as a bargaining tool.

The process of researching needs does not stop once the buyer negotiation is underway s the body language and facial expression of both parties will signal their reactions to the ongoing discussion. Successful buyers will listen to and watch the garment merchandisers carefully and making judgments about how to trade benefits with them. In addition to listening and observation skills, buyers need to be able to use questions effectively. Open questions require a respondent to elaborate which may provide the buyer will valuable knowledge on how to proceed when meeting an apparel merchandiser. Closed questions can be used to generate specific responses.

2.Preparation:

Effective preparation is also very important to successful communication which ultimately makes it easy to do buyer negotiation effectively. The particular preparation required will vary according to the nature of the meeting but some factors are always important. The meeting should begin on time and follow a clear agenda with a realistic amount of time to accommodate the work. Where there is an existing relationship with a garment merchandiser, a file containing the relevant notes and documentation relating to the orders should be read before the meeting and taken in for reference.

Garment merchandiser’s meeting is usually held in uncluttered or empty rooms or offices to avoid any distraction from the business of the meeting. It is also usual for there to be two people from buying in the meeting so that buyer can have an objective viewpoint available while personally involved in the buyer negotiation.

It is essential that the buyer also has identified the maximum and minimum positions that he will accept for a range of factors including the product price, order size, and lead time.

3. Offer:

Having identified where the respective position lies between them. The buyer and garment merchandiser can make specific proposals to set the boundaries of negotiation (buyer negotiation). It is unlikely that many of the offers initially made will end up being accepted. So both parties allow for some maneuver. This is the opportunity for the buyer to be trading what is of relatively low value for him but more value to the apparel merchandiser.

4. Discussion:

The likely framework of a final settlement will emerge in the discussion as each side probes the other ad makes suggestions. Answer to the suggestions can be revealing with the choice of words and tone signaling interest of reluctance and should be noted as potential bargaining material. There will be areas on which one side can move more than the other and vice versa. The buyer needs to make a note of which ones provide the greatest and least opportunities for flexibly the trade-off later in the buyer negotiation.

5. Counter and revised offers:

This is the real bargaining were elements of the order such as numbers of units, product details, lead time, and so on are being decided in the context of an overall cost price. The buyer should make firm proposals and be cautious of offering concessions unless she is getting one in return. The final element that will pull all of the other variables together will be the cost price which is agreed upon at the end. Although the bargaining may be tough, the spirit of the communication should be remaining friendly and not adversarial. Parities are more likely to co-operate if they are being treated fairly and responsibly.

6. Summaries:

It is vital to summarize at key stages through buyer negotiation when significant points are agreed upon to avoid losing early gains to ensure that both parties understand each other. With so many potential variables included can be easily forgotten unless there is a record of the agreement through. Records will also provide both sides with an explanation of how the deal was constructed should a particular variable become contentious at a later date.

7. Agree and commit:

It is very important to make an effective buyer negotiation job. Once the parties have agreed on an order, they have to communicate the details to other functions. The garment merchandiser may need to book production space, order fabric or trimmings, and source labels. The buyer will need to inform the apparel merchandiser of the retail selling value of the order so that a track can be kept on spending.

More questions related to this topic:

  1. What is buyer negotiation?
  2. Describe the buyer price negotiation process.
  3. Mention some buyer negotiation tactics.
  4. Mention some buyer negotiation skills.
  5. Discuss the purchasing negotiation process steps.
  6. Discuss the vendor-buyer negotiation process.
  7. Costing and negotiation skills for merchandisers.
  8. Role of order negotiation in RMG business.
  9. How to negotiate with buyers & processing orders?
  10. How to negotiate with buyers in the apparel industry?

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