Vendor Negotiations 201

Vendor Negotiations 201

Insight from Ramp

Your ability to negotiate with vendors can make or break your runway. 

It's not just about shaving a few bucks off the price tag—it's about crafting deals that give you flexibility, conserve cash, and set you up for long-term success. 

Here are some specific strategies to keep in mind while ironing out your next deal 👇

The Long Game (with an Escape Hatch): Offer a multi-year deal, score a sweet discount, but keep the freedom to bail if things go south. Propose a 3-5 year contract (vendors love that long-term commitment), include an "opt-out" clause with 60-90 days' notice, and sweeten the pot by offering to feature them in case studies. 

Stretch Those Payment Terms: Cash is king, so why not keep it in your pocket longer? Negotiate for extended payment terms – we're talking net 60 (or even 90) days. It's like an interest-free loan from your vendors. Start by asking for twice the current terms. If you're at net 30, shoot for net 60. Remember, the worst they can say is no, and you might just land somewhere in the middle. Pro tip: Offer to set up auto-payments in exchange for longer terms. Vendors love predictable cash flow almost as much as you do.

Factor in Total Cost of Ownership: Time to put on your detective hat and look beyond the sticker price. We're talking implementation costs, training fees, maintenance – the whole shebang. Create a TCO model for each vendor and use it as your negotiation superpower. You might find that the "expensive" option is actually cheaper in the long run 🤷

Your bottom line (and CFO) will thank you.