Intelligent Negotiating

The purpose of this blog is to help you understand the techniques for negotiate pricing with scientific suppliers. As you look to buy supplies or equipment for the lab, there are plenty of opportunities to overspend. Be careful! So how do you make the most of your money?

There are three concepts/processes you should understand to help you along the way:

1. How suppliers and sales reps operate
2. How and when to ask for a discount
3. Industry pricing and the term "List Price"

List Price

In simple terms, List Price is the price of an item listed publicly on a supplier's website. It is helpful to know if the List Price is a "fair" price, and if you have room to negotiate. We performed a case study, go to here, where you can see data showing how much wiggle room there is to negotiate pricing from the big suppliers. Generally, for the suppliers who sell anything and everything (Fisher, VWR, MilliporeSigma, etc.), you should try to NEVER pay list price.

Please take note that the price you should pay can be up to 80% off List Price. Shopping at scientific suppliers is nothing like Amazon where a market dictates pricing based on quality, reviews, and lots of competition between sellers. You have to be much more diligent with scientific shopping.

For companies that sell a specific line of products (Abcam, NEB, Teknova, etc.), paying List Price is acceptable most of the time.

How suppliers and sales reps operate

There are three branches of a supplier that you'll interact with: Customer service, technical support, and sales reps. Suppliers hire sales reps to visit labs, call scientists, and email you to buy their supplies. A few points you should know:

• It is their job to get you to buy from them.
• Their income is based on two things, 1) how much you buy from them and 2) how close to List Price you pay...the closer to List Price, the more money they make.
• Some have a science background, many don't.

Most sales rep are in the "field" visiting scientists. Therefore they can be very unresponsive. Set your expectations accordingly when asking them for help. You can call customer service, but rarely can customer service help you with pricing. You should only call customer service when you need an order update or there's a problem with the order, but not for pricing info or discount quotes.

The process for getting a quote is usually not fast. Your request first goes to the sales rep, who is possibly out in the field. Then, the sales rep might not have the authority to grant a particular discount, so they have to go to their manager for approval. This takes time, so if you need the items ASAP you might not be able to wait for a quote.

How and when to ask for a discount

The best times to request a quote are:

1. when buying new and used equipment
2. bulk quantities (five +)
3. with a set shipping schedule (aka "standing order”)
4. when your current price is List Price

Some tactics that help:

• Use data. "We’ve spent $10,050 with your company this year, at what point do we qualify for the next tier of discounts?"
• Use the competition. "SupplierX has quoted us this price, but we’d much prefer to buy from you. Can you beat or match their price?"
• Sample request. "We’re interested in trying a new item in the lab - is it possible to get a discount or free sample?"
• Be nice. Sales reps are people too. Kindness can get you lower pricing.
• Don't take no for an answer. If they provide a quote with a small discount and you think you can do better, don’t be afraid to ask for a larger discount - the worst they can say is no.

No matter the price, never ignore these three factors which can significantly increase the backend cost of the item:

1. Shipping cost
2. Timeline to deliver (delays mean your lab is paying your salary to wait)
3. Product quality. Keep in mind...you get what you pay for. Low cost products are probably low quality. If you're experiment fails because of low quality supplies, what is the cost of that lost experiment? Was it worth saving $50?

Happy spending!

Glossary of useful terms

• List price - the public price of an item on a supplier website before applying lab discounts or promo codes
• P.O. - Purchase Order. A document stating what you intend to buy.
• Quote - a documented price that is not List Price
• Sales Representative (sales rep) - contact person at a vendor/manufacturer. They responsible for managing your labs account and pricing, and can help out with order issues. They are assigned to regions of the country, state, or city.
• Standing PO/order - An order for a fixed quantity of items with a recurring shipping schedule.
• Supplier- a company that sells goods and services to your lab. They may or may not be a Manufacturer.