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Supplier Negotiation: Turning a Loss into Profit Through Effective Communication

On 7th Feburary, we received a email from brand tha cause us to cease thousands of dollars stock selling. Here is what email we get from them:

However, while we are ordering the products they do not have told about these ASINs restriction and in the mid of already selling products they asked us to stop selling.

It means that if we stop selling, it will cause us huge loss even if we return the items. Therefore we replied them:

Therefore in response they said that we are happy to get these items returned and credit you. 

However,  as mentioned doing this will cause us good amount of loss and it is not good for the business. So, here are two options we just ignore it and just tell them you do not specifically told us before and what so ever we are going to sell it if you like it or not. This approach might allow us to sell but it will destroy relationship. And there is a second option which is ‘Honestly telling them in this situation we both are and ask them how to solve it’.

We opt the second situation, in which we honestly put them in our shoes and also told them yeah we can do it what you are asking for if the expenses are paid or otherwise there is another option which isn’t required these expenses to bear.

Here is how this email Structured:

  1. We told them our compliance and query about restrictions, that help them to understand how we already concern about it and we are not told about it. So, there isn’t much of our fault.
  2. We highlighted that stopping sales is costing us daily, while mention the cost so they can understand the impact in business terms. This keeps the conversation honest and transparent, allowing them to see the situation from our perspective.
  3. We did not say, “We will not return the items because you failed to inform us, and it will cost us too much.” Instead, we presented them with options:
  1. We will return the products if they bear the costs.
  2. Allow us to sell the remaining stock.

Instead of outright saying, “No, we must sell the products,” we gave them choices. Providing options allows them to feel in control of the situation, which makes them more comfortable with the decision. However, by being honest, we framed the options in a way that minimizes our costs while creating a win-win situation, also they feel that they are in control of the situation.

4. We also outlined the non-monetary costs and their impact, while suggesting a reasonable solution. This subtly influences their decision-making, making our suggested option appear more favorable.

5. We reiterate our commitment to compliance, which builds trust and positions us as a potential long-term partner. This also opens the door to a sustainable resolution. Restating key points reinforces the crucial factors they should consider in their decision-making. Additionally, we should highlight the costs associated with the option we are looking to avoid.

6. Finally, we communicated our vision for the business relationship. This has a significant impact on their decision-making, potentially turning a short-term loss into a long-term profitable relationship.

Please see the markings of the above points as follows for better understanding:

Therefore, after receiving our email, they took a few days to respond and then replied:

Hooray! We just turned a loss-making situation into a profitable one while also preserving our relationship with the supplier by communicating effectively. Below are the key points that helped us convert the situation into a profitable one:

Key Points:

The following key points we observe that get the situation in our favour:

  1. Compliance & Transparency
  2. Explaining Financial Impact and asking to compensate
  3. Providing Options
  4. Explained Non-Monetary Costs & Influence
  5. Reiteration of Commitment to Compliance & Partnership
  6. Long-Term Business Vision

If you have any questions, feel free to ask.

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