Preparation
- Benchmark target cost using 2-3 suppliers and component-level quotes.
- Define must-haves (spec, certifications, delivery date) vs trade-offs (packaging, payment term).
- Prepare a clear forecast and ramp plan; volume confidence earns better terms.
Commercial Terms
- Negotiate MOQ by offering commitment to reorders and paying for initial setup/tooling.
- Use Incoterms strategically: FOB for tighter control, DDP for simplicity.
- Structure payments as 30/70 or 20/80 with inspection between, not 100% upfront.
- Lock validity period for quotes and exchange-rate clauses if needed.
Quality & Service
- Tie price to golden sample and AQL level; agree on rework responsibility.
- Require lead-time guarantees with penalties or escalation plan for misses.
- Capture spares, packaging specs, and labeling requirements in the PO.
Relationship Management
Be firm but respectful. Share performance scorecards each quarter (quality, OTD, responsiveness). Celebrate wins (fast fixes, cost-down ideas) to keep goodwill, and keep one backup supplier warm to avoid dependency risk.