During negotiations, there is a type of supplier that gives e-commerce companies a headache, and that is the monopoly supplier. Monopoly suppliers usually have mastered key technologies, for example, they can produce high-precision parts. This type of supplier has strong R&D and production capabilities and is in a strong position in the relationship with e-commerce companies.
So, how should e-commerce companies “deal with” monopoly suppliers? The method is to conduct a comprehensive analysis of them. Generally speaking, monopoly suppliers are leading companies, and some are internationally renowned companies. Even if they do not have such a special status, monopoly suppliers are at least local dominant companies and are a key link in the supply chain. This type of supplier has advantages that other suppliers cannot match in some aspects. This advantage makes it show its strength when negotiating with e-commerce companies, and e-commerce companies have to cooperate with them.
Therefore, this difference in power directly leads to a clear disparity between e-commerce companies and monopoly suppliers. So, in what aspects will monopoly suppliers show their strength and advantages?
(1) Product advantages
Monopoly suppliers may have unique advantages in products, especially key products. For example, for products with high technical requirements and large equipment investment, such as precision parts, suppliers with weaker strength often find it difficult to guarantee quality. This also makes monopoly suppliers more confident in the negotiation process.
It may also be that only a few suppliers can provide the products that e-commerce companies need, and the production capacity of other suppliers is far behind them. This leads to e-commerce companies having to negotiate with a few suppliers, and the transparency between them is higher.
(2) Owning patented technology and forming a technical barrier
If a supplier has patented technology and has formed a barrier to the technology, it will be very advantageous. Especially for patented technology that is exclusively developed, it is difficult for other suppliers to make professional breakthroughs. When e-commerce companies negotiate with such suppliers, and their own strength is indeed inferior to that of the other party, they will definitely be in a relatively weak position.
(3) Advanced management, brand, efficiency and strength
Monopoly suppliers have very strong comprehensive strength, often with a long brand history, a deeply rooted image, and their own management system. E-commerce companies should deal with such suppliers seriously.
The above three points briefly summarize monopoly suppliers. It can be seen that the reason why monopoly suppliers are strong is often because they have relatively high standards. Of course, it is not ruled out that some suppliers are not very strong, but they are still very tough when facing e-commerce companies that are slightly weaker than themselves and are unwilling to make any concessions. If encountering such suppliers, e-commerce companies should carefully judge whether to negotiate and cooperate with them
After analyzing the characteristics and advantages of monopoly suppliers, how should e-commerce companies deal with them? A more effective way is to start with a cooperation model and ask the other party to fight side by side with you in the negotiation. In the process of negotiation, e-commerce companies can propose a cooperation model to the other party to smoothly complete supply and procurement activities
For example, monopoly suppliers can formulate supply plans based on the production process of e-commerce companies, and e-commerce companies can propose production suggestions to monopoly suppliers to optimize their production processes. Once a quality problem occurs, the e-commerce company should work together with the other party to analyze the cause and solve the problem.
In the process of supply and procurement, the two parties should establish a trusting relationship and communicate with each other about the product situation. The e-commerce company can even provide favorable conditions for the other party in terms of price or logistics. The relationship between e-commerce companies and suppliers seems to be a simple supply and demand relationship. In fact, in order to achieve better results, it is necessary to establish a cooperative model in the negotiation and maintain a long-term cooperative relationship. Compared with the introduction of a competition mechanism, this approach can better overcome the phenomenon of mutual shirking.
If e-commerce companies want to be more confident in negotiations, they must adhere to the principle of “anything can be achieved through negotiation”, put problems and even differences on the negotiation table, and let the other party see their sincerity and determination in the negotiation.
Tips
During negotiations, e-commerce companies should not only pay attention to the product itself, but also collect data and information from suppliers, so as to increase the probability of successful negotiations.