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The global safety equipment management market is big business. Currently worth over $4bn worldwide, the sector, which includes PPE and fall protection equipment, is expected to balloon in the coming years. This rapid growth is being driven by a rising manufacturing industry, stricter labour laws, and tight market competition.
In Singapore, the construction industry also continues to grow. This, coupled with the global pandemic and a sharp focus on employee health and safety, is a big contributor to the increase in demand for safety equipment in the region. This rise in demand means pricing is also becoming more competitive.
However, the current pandemic has impacted many businesses and triggered serious belt tightening for many. Purchasing managers are expected to be smart when negotiating safety equipment contracts to save money and maximise investments.
This article will guide you in getting the best value from your fall protection equipment contract—covering all your needs, and complying with relevant safety standards.
Before attempting to enter a contract negotiation, there are a few factors you should consider. These include:
Knowing what you value the most in your purchase will help you steer the direction of the negotiation successfully.
Long story short: value does not equal price. Do not immediately go with the cheapest option purely because of the price tag. Exercise due diligence, do your research and choose a safety equipment supplier that covers all the bases.
While negotiating is a good way to save money, the terms must be fair to both parties. If you approach negotiations with unrealistic expectations, you are guaranteed to be disappointed. At the end of the day, a good deal leaves both parties satisfied and excited to establish a long professional relationship.
Consider the following tips for navigating a negotiation successfully:
A supplier will be more flexible with the negotiation when you create and nurture a good, mutually beneficial relationship with them. Essentially, be someone the supplier would want to do business with. Go beyond formalities and become partners.
Genuine rapport also means establishing enough common ground at a level that creates trust between two parties. In the safety equipment industry, it might involve expressing a genuine desire to keep your employees and anyone involved in your projects safe, as opposed to just complying with rules.
Projecting safety as a goal rather than a requirement is an effective way to build a strong foundation of shared interests with a safety equipment supplier.
Since this guarantee long-term business, the chances of arriving at better contract terms are higher. Businesses in general value guaranteed sources of income and predictability. If you can offer a long-term relationship with a safety equipment provider, you might be able to haggle for a better deal. In this case, you should make sure the supplier offers high quality equipment, as a long-term contract with a supplier with faulty equipment is not worth the savings.
When procurement volumes are large, it means more business. If your project allows, consider asking for bulk rates. Getting bigger quantities is almost guaranteed to yield savings—just make sure you can find use for the equipment and it won’t cost in storage what you save.
Be aware of the expected lifespans of the different types of equipment because regulations can render them unusable if they are stored past a certain point. Crunch those calculations and make a safe projection before making a bulk purchase.
Simply put, don’t readily accept the first offer. From the quote, give a reasonable number for both parties. Talk to at least three reputable suppliers and let the supplier you are leaning toward the most know that you are getting quotes from other suppliers. This also gives you a good benchmark of industry price standards so you know how low you can go.
You can leverage the feedback from their previous customers on the negotiation table. This is another way to have research pay off. While inflation guarantees that prices continue to climb, having a benchmark figure established by previous customers helps you determine whether you are being overcharged or not. By no means should you aim for an exact price match, but having that awareness and making it known that you are not coming in blind is a powerful tool to get a fair price.
No matter how negotiations go, never forget to run through the contract a couple of times before signing to ensure that the terms you have agreed upon are honoured by both sides. One of the biggest mistakes you can make is to jump the gun on a deal without a thorough read through with your company’s lawyers. Once that’s done, you can be content with the knowledge that you have done your part to arrive at the best deal.
At the end of the day, the goal is to sign a safety equipment contract that not only benefits you but also the supplier. This is only possible if both parties are aware and are committed to creating a professional and mutually beneficial relationship. Avoiding exploitative arrangements begins by partnering with a reputable supplier because no matter how good the contract is on paper if their credibility is compromised, the deal was never good from the start.