Learn How to Negotiate Price without Really Negotiating… It’s All in How You Present Yourself
Price negotiation is a skill that every designer should master! When you talk numbers with a new manufacturer; you’re leaving an impression. And that first impression will determine your relationship moving forward; so how do you make a good one? Pull out a notepad as we break down how to negotiate price SUCCESSFULLY with manufacturers.
But before you negotiate; it’s crucial that you know WHEN to Negotiate!
As a start-up designer, negotiating won’t always work in your favor. If a manufacturer feels you are being pushy or manipulative during the first contact, then they probably won’t want to work with you. And if they do, they won’t treat your production with the same level of care as their pre-existing clients.
Think about it. Most of the manufacturers you meet will have business with several long standing (sometimes big-name) clients. So, when they meet a start-up designer like you, they have no clue who you are. For all they know, you could be a one-hit wonder who won’t make it past their first season. If you have no project manager or referrals, you have no credibility in their eyes and there’s no reason to trust you– let alone negotiate their prices with you. This brings us to the next point.
Don’t Negotiate Until You’ve Established Credibility
Negotiating manufacturing prices works best when a brand/designer does one of the following:
- Has already established a relationship and built rapport with a factory
- Hires a reputable project manager to do the negotiating for them!
We have now worked with several clients who we were able to negotiate their manufacturing price for 50% less than what another factory had quoted them! That’s a huge difference. We even had someone attend one of our Manufacturing Tours, meet a vendor who had previously said they wouldn’t work with her, and then 6 hours later, agreed to work with her because she was on our tour! This is why people hire us!
Fashion is all about who you know. If you have no connections or rapport with any manufacturers, you won’t have much negotiating power.Fashion Angel Warrior
If you’ve already established credibility or you’re willing to take the chance then read our tips below.
Be Organized and Know What You Want
Factories want to work with people who are organized! If you don’t know your budget, price-point, materials, or finishes; the manufacturer won’t be able to give you an accurate price. The more details you provide, the more a manufacturer can suggest different materials or finishing techniques that can help them meet your desired price point. So come to your cost meeting prepared. This is also a great time to ask them about the MOQs (minimum order quantities) needed for production, so you can negotiate that as well.
Having this information will help you look more experienced. If a manufacturer knows that you’re a rookie, they might quote you an inflated price assuming you don’t know any better (this has definitely happened to some of our clients prior to working with us).
Prove That Your Future is Promising
When meeting a new manufacturer, try to present yourself as someone who is established (even if you haven’t produced anything yet). This is another reason why pre-orders, crowdfunding campaigns, and early stage digital marketing are so crucial. Each of these strategies provide a proof of concept and proof of concept will help you leverage credibility with new manufacturers. Once again, factories don’t want to partner with one-hit designers; they want long-lasting clientele!
Proof of Concept- Evidence that demonstrates that a design or concept is viable
Check out our FB Live on Proof of Concept! *You must be a member of our FB group in order to watch 🙂
Be Respectful and Pleasant
Above all else, be considerate! I’ve worked for designers who treated their manufacturing relationships very poorly. They would try to lowball the factories and manipulate them into settling for cheap production costs. They would send cutting tickets, samples and markers with no tech pack and then get surprised when the factory makes a mistake with their production run. So many small design companies want factories to bend to their rules instead of complying with the factory’s standards of business.
Usually, the factories still took the job, but shipments would be late and quality was subpar. Even though I represented the designers, my empathy was with the factory workers. In everything, you reap what you sow– especially in business!. If you’re inconsiderate and difficult to work with, then the factory will show you that your production isn’t a priority. They will put most of their energy, time and effort with clients who are more pleasant, consistent, and valuable.
Be valuable to your manufacturers. Pay deposits on time, be mindful of their schedules and provide thorough tech packs (or at least sewing instructions!) They’ll definitely put more tender, love, and care into your production!
Substitute Hard Negotiating for Soft Probing and Active Listening
Instead of demanding a specific price or quantity, ask questions. If a factory can’t match your unit price, find out why. Is it because of the handwork or machinery involved? If they require a certain MOQ, is there a way that you can work around it? For example, if a factory has 100-unit MOQ, ask if you can pay for the bulk now and break up the production runs over time so you don’t overproduce. Learning how to negotiate price involves showing concern and creating a workaround at the same time!
Have 2-3 Other Back-Up Manufacturers To Contact
Honestly, the best way to negotiate is to have back-up! Try to get pricing from at least 3-4 manufacturers (of equal caliber and quality). Asking different manufacturers not only serves as “pricing research,” it can help you land a better deal.
Letting a potential factory know that you’re shopping around (in a non-threatening way) gives you more of an edge and lets them know that you’ve done some homework. It also helps if they know you’re seeking out long-term partnerships, so they know you’re in this for the long-haul.
Do you have experience in this area?
Comment your tips below on how to negotiate price with manufacturers. We’d love to hear from you! And download this Cutting Ticket + PO Contract Template to help you secure accountability with manufacturers!
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