One of the biggest challenges facing all Auto Repair Workshops in 2024 is rising Auto Parts prices. The prices that you source your parts for will determine if your Workshop is successful or not. That brings us to the question, how can you negotiate a better price for auto parts in 2024?
Workshop Mate has put together 8 tips your Workshop can use to negotiate cheaper auto parts in 2024.
Let’s get into it.
1. Research and Know Your Market
The worst thing that you can do when it comes to negotiating the price of anything is going in unprepared. Before your Workshop begins to negotiate better parts prices it is crucial that you research and understand the market. Look at the current industry prices for the parts that you are looking to order, call around to other workshops to see what they are paying and build as much knowledge as you possibly can. Understanding the current automotive industry will position your Workshop strongly to negotiate a cheaper parts cost.
2. Build Strong Relationships
Let’s face it, the only way that you are going to be able to negotiate more favourable parts prices is by building a strong relationship with your suppliers. Think about it, in the Automotive industry everyone knows about mates rates, the prices that you give your friends or family that is lower than advertised prices, buying parts is no different. To negotiate better parts prices be sure to maintain regular communication with your suppliers, check in with them, arrange regular meetings, anything that you can do to build your relationship do it.
3. Consider Bulk Buying
It saves to buy in bulk. To get cheaper parts prices consider buying your parts in bulk. Many suppliers often provide discounted prices for companies who buy their parts in bulk as it will benefit them with increased sales volume and turnaround time. Before you consider buying auto repair parts in bulk be sure to understand your sales cycle, the last thing that your workshop wants is to have too many parts left over that you cannot sell.
4. Understand the Supplier's Costs
A big mistake that so many businesses make when it comes to negotiating better parts prices is being unreasonable in their negotiations. A key aspect of negotiation is understanding both perspectives and meeting in the middle. Before you consider negotiating with your suppliers be sure to understand their perspective and associated costs. Remember a suppliers costs include manufacturing, shipping and staff, it’s not cheap. Remember when negotiating, be realistic.
5. Negotiate Payment Terms
Another huge mistake that so many automotive workshops in Australia make when it comes to negotiating parts prices is remaining with a standard payment term. A good way to negotiate better prices is by exploring different payment terms that work for both you and your selected supplier. See if you an extend payment schedules or pay early. This can improve your suppliers and your workshops cashflow and often lead to a discount as such as you will be seen as a reliable purchaser.
6. Be Open to Alternative Brands
The absolute best negotiation tactic is to shop around. While being loyal to your current parts provider is valuable, to get the cheapest price on parts it is important that you be open to switching to other suppliers if your current supplier is unwilling to give you something better. The benefit of shopping around for different parts providers is you can leverage different providers prices against one another. Think about it, if one supplier gives you a better price, you can go to your current provider and present it to them. Many providers will be willing to lower their price if they see someone has offered you something better in writing.
7. Demonstrate Your Value as a Customer
To get better parts prices you need to show suppliers how valuable you are to their business. Be sure to highlight your value. If you consistently buy parts from your parts provider, pay on time, and provide reliable business, suppliers will be more willing to offer you better pricing and conditions as they know you are dependable and a reliable source of income to their business.
8. Stay Informed About Industry Changes
The Automotive industry changes everyday. New suppliers enter the market regularly and are fighting for your business. To consistently receive the best parts prices it is important that your workshop stays informed about industry changes, new parts suppliers and new automotive technology. Keeping on top of industry changes will position your workshop for ongoing success and can present you with new suppliers that you may not be aware of and who can give you better prices.
One of the most important parts of running a successful mechanical workshop in Australia is negotiating cheaper parts prices. Negotiating cheaper parts prices is a skill that will positively impact your workshops bottom line and lead to ongoing growth. The 8 tips presented are a few proven ways that your Workshop can negotiate better parts prices in 2024.
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