Negotiating Vendor Agreements with Large Telecom Companies

Question
QUESTION: Hello Peter. I see that you have experience with television vendors. I am currently selling to a television vendor and have met with department stores as well. Without using a trial and error method, how does the little guy or girl negotiate a vendor agreement with an experienced multinational company? It seems more of a take it or leave it offer. We deal in luxury fiber clothing. We make seasonal appearances. We have been told our DPM(dollar per minute) sales are excellent. Our client handles shipping and delivery. They keep nibbling at our percentage and fattening theirs. Are there any resources I should be aware of to help battle Goliath?

ANSWER: HI LAWRENCE,

WELL IT SOUNDS LIKE YOU GOT THEIR MODIS APORANDI DOWN. THEY WILL CHISEL YOU OUT OF ANY THING THEY CAN. AND THEY WILL CONTINUE TO DO IT. IF YOU REALLY HAVE GOOD SALES IN YOU DPM THEN YOU HAVE AN ADVANTAGE AND YOU CAN USE IT TO MAINTAIN YOUR PRICES. DON'T LET THEM BULLY YOU, YOU HAVE TO BE WILLING TO JUST SAY NO AND LIVE WITH THE CONSEQUENCES. I GOT TO THE POINT THAT I WAS MAKING SUCH A SLIM PROFIT THAT I TOLD THEM TO SHOVE IT. I WAS WORKING HARDER THAN I EVER DID AND WAS MAKING LESS MONEY PER HOUR WORKED IN MY LIFE. AFTER I STOPPED WORKING FOR THEM THEY ASKED ME TO DO MORE AND I JUST REFUSED. THEY WAVE THE DOLLARS IN FRONT OF YOU BUT ANALIZE IT AND YOU'LL SEE THEY ARE MAKING MORE AND YOU ARE MAKING LESS. KEEP YOUR MARGINS TOUGH AND MAKE SOME MONEY OR THEY'LL EAT YOU ALIVE. MAKE SURE YOUR IN LINE WITH THE COMPETITION SO YOU KNOW WHAT YOU HAVE TO DEAL WITH AND MAKE A DEAL AND STICK TO IT. OTHERWISE GET A JOB IN THE RETAIL BUSINESS OR ON EBAY. GOOD LUCK,

PETER

---------- FOLLOW-UP ----------

QUESTION: Hi Peter, thanks so much for the incredibly speedy response. Do you know of any resource where I might find a copy of someone's vendor agreement? It would be nice to have an online forum where people could sound out what they are paying to these guys. I know it is difficult as each industry has different margins. But I have heard similar stories of being squeezed to the point where they are making all the money.  

Answer
HI AGAIN,

I DON'T KNOW OF ANY FORUM FOR THIS TYPE OF FEEDBACK. I'M SURE THEY PROTECT THEIR AGREEMENTS THROUGH LEGAL CONSTRAINTS. I HAVE ALSO HEARD THE SAME STORIES AND EXPEIENCED THEM. THAT IS THEIR GOAL IT SEEEMS. I'VE LEFT THEIR RAT RACE TACTIKS AND DON'T HAVE MANY CONNECTIONS ANYMORE. LET ME KNOW IF FIND ANY.

PETER