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Practical Price Negotiation

Practical Price Negotiation

If you work in apparel sourcing, you will appreciate that price negotiation is a critical, and often stressful, aspect of your job. Few clothing companies provide practical training in the process of negotiation, although correct product pricing is integral to the health and wellbeing of any brand’s bottom line.

This report examines ten tactics that will help people who work in sourcing develop a personal negotiation strategy, a strategy that will strengthen communication with their internal merchandising and design teams and reinforce their relationships with their vendor-partners.

In most apparel organisations, negotiation can involve dozens or even hundreds of unique style and fabric or yarn combinations. Each style has a story of its own, one that the sourcing manager needs to be intimately acquainted with in order to negotiate the seasonal buy, armed with the documents and information needed for effective negotiation. But in the less than ideal, often undisciplined world of fashion, information has a tendency to lag behind calendar. Being prepared as a negotiator can mean coping with being unprepared as a sourcing manager.

Extract: “Because of the breadth and complexity of the individual negotiations that take place in a single season, negotiating apparel is different from buying a house or settling a remuneration package. During the period designated as line finalisation, time is not on your side. A good deal of preparation will need to take place long before you sit down at the negotiating table.”

The author, Margie Bross, Sourcing Consultant, previously Country Manager Indonesia for Eralda/Talbots and Sourcing Manager in the U.S. and Asia for various well-known brands, sets out the ten tactics essential to a successful apparel sourcing price negotiation:

Know what you’re buying
Establish targets
Focus on value
Enlist your local team
Get organised
Stay positive
Set priorities
Explore alternatives
Leverage your relationship
Perfecting your wrap up

Complete with a sample Costing Worksheet and Negotiation Checklist, the information in this highly-practical report provides the perfect starting point for your next negotiation. In addition, to help you become familiar with the terms most often used in negotiation, the report includes a Glossary of the most used Costing Terms.

Increase your chances of getting the deal you need during your next negotiation - buy this report today.


Introduction
Merchandising, design and sourcing
Challenges and limitations

TACTIC ONE: KNOW WHAT YOU’RE BUYING
Information inputs
The components of a garment’s price
Raw materials
Trims and treatments
Focus on the Free on Board (FOB)

TACTIC TWO: ESTABLISH TARGETS
Follow the merchant’s lead
Free on Board (FOB) to Landed, Duty Paid (LDP) to selling price
Alignment of the FOB and selling price
Make comparisons
First quotes and targets

TACTIC THREE: FOCUS ON VALUE
Price versus value
Value criteria
Your vendor matrix

TACTIC FOUR: ENLIST YOUR LOCAL TEAM
It’s all details
The strategy session

TACTIC FIVE: GET ORGANIZED
Information overload
The costing worksheet
Set the stage

TACTIC SIX: STAY POSITIVE
The vendor is your partner
Establish rapport
Preliminaries
Make a personal connection
Keep cool

TACTIC SEVEN: SET PRIORITIES
The three-tiered wish list
“Gotta haves” and “throw aways”
Back-and-forth on the “close enoughs”
No compromise
The exit plan

TACTIC EIGHT: EXPLORE ALTERNATIVES
“What if?” scenarios
Substitutions and trade-offs
Design and brand integrity

TACTIC NINE: LEVERAGE YOUR RELATIONSHIP
Align your objectives
Hitting a wall
Just ask
Delegate up

TACTIC TEN: WRAP UP
Confirm and reconfirm
A positive and personal ending
Time to begin again

Appendix 1 – Negotiation checklist

Appendix 2 – Costing worksheet

Appendix 3 – Glossary of Costing Terms

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