Negotiation tips for fashion brands.
Never Split the Difference: Negotiating as if Your Life Depended on It, the best selling negotiation book written by Chris Voss. Chris is a world-renowned FBI negotiator and shares his 30+ year career in negotiation skills in this book.
7 Principles of Negotiation are:
- Show the other side that you are negotiating in good faith.
- Be genuinely interested in what drives the other side. What are their goals, motivations, ants and fears?
- Take emotions into consideration. That’s correct dont be cold-hearted, we are all humans.
- Build trust-based influence through the use of tactical empathy.
- Work to deactivate negative feelings. Watch for body language that indicates negative feelings, and, when you notice it, focus again on using tactical empathy.
- Aim to magnify positive emotions. Why people are smarter when they are in a positive frame of mind.
- Keep an eye out for black swans. An example could be; you’ve seen that the company posted record profits last year. “Seeing the profits report” is your black swan.
Now let’s look at specific negotiation tips for fashion brands.
I strongly believe that a good negotiator is someone who applies solid negotiation skills to a wealth of product knowledge.
Ask yourself; How can you negotiate the best cost price for your product is you dont know the intricate details of each design? You need to know the fabric weight, the consumption, every trim, bell and whistle, to understand what is truly needed in each design as an MVP before entering into any costing negotiation.
When negotiation the cost of your product, your limitation is the spec pack. Whatever you have detailed in your spec pack should be a direct translation of your original sketch and that is all the manufacturer has to work off. It’s essential to never forget this.
Here are my tried and tested negotiation tips spanning a career of 8+ years in the industry:
- Always have your spec packs to hand!
- Be an expert in your subject matter.
- Know every feature of your design, so that you can challenge the cost.
- Go into the negotiation prepared.
- Listen to their reasoning.
- Use mirroring technique – repeat back what they say.
- Set the scene. Set time aside, don’t rush or enter the conversation stressed.
- You have already chosen to work together for a reason so remember this!
- Can you reflect back on your discovery questions, and check they are honouring their answers.
- Remember win-win.
"I strongly believe that a good negotiator is someone who applies solid negotiation skills to a wealth of product knowledge."
Never go into a negotiation unprepared.
You must know what your target margin is for that specific collection.
To know what your target margin is; you will need to know the RRP for each product in the collection along with a target cost price and all other known costs.
A tip: Ensure you have a pricing (RRP) framework to work to for each market you’re going to launch in, along with each markets’ known costs. Ideally, avoid using guestimates!
Share a costing sheet with your factory detailing your target costs per product in your collection as soon as you submit your spec pack/development. By doing this you are setting your expectations early on and guiding them on what you’re wanting to pay for each design.
This will enable the factory to suggest adaptations to your design in which to reduce the cost price and not waste time in sampling un-realistic product.
Tips on how to get a fair price comes down to:
- Choosing the right supplier for your product requirements.
- Understanding the make of your product.
When it comes to pushing back on a cost, you need to check and query:
- What component is costing the most?
- How can you reduce this cost?
- Less width in the fabric? For example, remove fullness.
- Are all trims needed?
- Can you reduce, remove or replace any feature of your design?
- Has the supplier added unnecessary surcharges?
- Always check the consumption, does this seem accurate? If so is the price fair?
- Normally you can always talk to the maker, about reducing usage which will at least reduce your cost by $1.
I can’t highlight enough how important it is to build a good relationship with your manufacturer from day 1. Why? so that when you’re needing to reduce costs, together you can work through refining each design utilising both sets of expertise until you have a collection that works for both your businesses margin.
What other aspects of my fashion business may require negotiation skills?
Any product or service you invest in may require negotiation.
This could be any 3rd party contractors for example a digital agency, a social media expert, even an accountant.
One final thought I wish to end with is; never accept the first cost and never be afraid to push back at least once. There is no harm in asking, you have nothing to lose but here the word no!
To learn more about how to successfully operate a fashion brand online check out our 6-step course. This course will not only tell you how to launch covering topics like business ops set-up, how to forecast a sales plan, but also how to source and build a collection.