Before you enter into legal business relations, you must prepare deliberately for your negotiations. Especially when your business is B2B, and you are also working in the F&B industry, your partners are multinational owners, suppliers, and distributors worldwide. To have successful negotiations with beverage contract manufacturers, your verbal skills and solving problem skills are crucial elements.
Techniques for successful negotiations
Negotiating requires giving and taking. Ideally, a successful negotiation is where you can make concessions that mean little to you while providing something to the other party. In other words, a fruitful negotiation will result in a win-win scenario between the two parties. Preparation is the critical element of a successful negotiation, and there is no exception for the beverage industry.
In this article, six main techniques to be well-prepared for successful negotiations among beverage contract manufacturers will be illustrated and analyzed from a beverage supplier’s perspective.
The more manufacturers you can compare, the more likely you are to find the best match for your beverage business. Just as important as gathering the quotes and capabilities from different co-packers is comparing them in a way that helps you see all of your options.
Sometimes, a quote that looks high may end up being the best value because of the additional services, options, or flexibility offered. Use the information you have from co-packers to project various scenarios and possibilities for logistics, labeling, and storage. You may find that a production path that looks a little different than expected also brings unanticipated advantages.
Technique 1: Doing research
The more manufacturing companies you can compare with, the more ability you have to find your own business’s most suitable counterparts. Gathering enough quotes and capabilities from different co-packers is considered the main activity to see all your options. Subsequently, clear understandings of your partners will accelerate your successful negotiation rate.
Analyzing the drink industry
In beverage contracts, managers working in an experienced beverage manufacturer are like world-class masters when it comes to beverage deal negotiations. If you know how to arrange the opening sequence best, you’ll have a perfect sense of the next move.
Our chances of beating the odds are not so high without knowing “what moves when” or future trendings. You are putting yourself in a dilemma.
Technique 6: Analysis of The Beverage Industry
When analyzing the world’s drink industry, don’t forget to collect information from reliable websites or channels such as The Investopedia, The Economist or Bloomberg.
To successfully negotiate in this arena, you should know how to set the opening sequence and be able to predict the moves that will follow.
Determining the objectives of both sides.
Before entering into any B2B beverage negotiations, you necessarily have an accurate picture of your financial model. An in-depth financial analysis will help you understand what you could afford. That gives you a solid starting point for the next steps.
Preparing your estimated cost of goods sold (COGS) and cash schedule empowers you to communicate confidently and accurately with potential contract manufacturers.
Technique 2: Identifying Objectives Clearly and SMARTLY
A solid financial picture also helps you make good decisions. It will, in turn, set both you and your contract manufacturer up for long-term, sustainable success. When you are setting objectives, you should undoubtedly think about the following things:
- Payment terms
- Delivery schedule
- Transport of packaging
Brainstorm possibilities and trades
Brainstorming is a quick way to evoke lots of ideas and possibilities. One of the strengths of this tool is that it stimulates creative, innovative, and unconstrained thinking. Also, it can help us think about new and different ways of doing things. It creates a chance for both of you to come to a deal as you assumed.
Technique 3: Brainstorming method
Based on its advantages, making a scientific brainstorming chart is a fundamental way for beverage manufacturers to increase their possibilities and trade chances.
Identifying your BATNA
Before starting business negotiations, identifying a negotiator’s BATNA is necessary for developing the best strategies to use at the bargaining table. So, what is BATNA? BATNA (known as the Best alternative to a negotiated agreement) is defined as the probability to point out a negotiator’s best alternative to a negotiated agreement. That is one of the many pieces of information negotiators seek when formulating dealmaking and negotiation strategies.
According to Harvard Law School websites, you need to take time out to process the information when bargaining. That will ensure you aren’t forgoing a good deal in hand for a BATNA in the bush.
Technique 4: Knowing your BATNA comprehensively
Decide when, where and what attitudes during negotiations
Preparation includes determining negotiation location, time, and behaviors that comfort your partners for any conditions. So, which are the critical success attitudes and behaviors that lead to your unlocking a winning streak in your beverage business negotiations?
According to the Negotiation export’s research, if you are pleased with achieving 45%, 50%, or 55% when on the table, then you can settle comfortably in your comfort zone. Fulfilling excellence demands that we depart from the confines of our comfort zones and address our mental attitudes.
To sum up
To come to a deal is always the ultimate goal of any business negotiations. Lack of preparation in a negotiation almost always sets a person up for failure, so we should attain enough knowledge and skills before entering negotiations.
Thus, negotiation skill is the key to increase your success in the beverage industry. With it, you can cooperate with great partners, which can be a turning point for your future business.
Tan Do is a global beverage ODM/OEM manufacturer and supplier located in Vietnam. Since 1996, we have built trust and credibility not only throughout Vietnam but also in many parts of the world. Leveraging state-of-the-art technology, we have crafted thousands of products that align with ISO, HACCP, HALAL, FDA, and many other standards.