Rebates As A Tactics (Tool) In Negotiations


Before you open the full version of blog – if you are in sales, could I please kindly ask you NOT to read any further? Please? This is only written as a tip for buyers.

I have already posted about rebates. And do not get me wrong – i still do not like them. BUT, listening to my colleagues talking about the subject, I realised, that there is a way how we, buyers, can use them for all the right purposes.

The situation in the market is as it is. A lot of sales people almost expect you to ask for rebates. So why not use this? However, for a successful outcome, there have to be two conditions:

  1. During the negotiations the supplier should not know you will ask for rebates.
  2. The supplier should not be informed what are the rules / policies in your company regarding rebates (if there are any).

And the process is as follows:

  • do your best during commercial negotiations part – and that includes everything from pitching your company, attractiveness of account, RFQ, negotiations. Really – get the best prices.
  • After this process is done, as “one last condition” – ask for rebates. This serves as a very good “security check” and has few outcomes:
    • The supplier was expecting for this request and kept “safety margin”. They will give you the rebate and you will make sure they gave you really the best conditions.
    • The supplier was not expecting this request, but still has some “wiggle room” and will give you the rebate promise.
    • The supplier did not keep any flexibility in margin (whether or not they expected your request for rebate). In this case they will simply say no and you will know that you did your job well from the very start.
  • If you have received the rebate promise – ask the supplier to simply give a discount rather then a rebate. In this case you will get best prices AND best financial conditions (as per details in the post mentioned above).

This worked for me. Want to try? Let me know how it ended!

Rebates As A Tactics (Tool) In Negotiations

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