How to Navigate the Plant Pricing Process
An adage that may ring true for many professionals is “It’s not personal; it’s business.” But when your very personal passion for plants is also your business, things can get a little muddled. For many growers and plant people, the biggest challenges come from the nitty-gritty details of running a business. And from purchasing inputs to plant pricing, negotiation is an important part of that process.
It’s a tough time to be in the greenhouse industry. Stagnant plant prices and tight margins impact everyone. That’s why growers need to have a game plan when sitting down with their buyers. We asked four operations to give their best tactics for navigating the negotiation process without losing the farm. Here’s what they had to say about closing the deal.
Have the Right Mindset
When it comes to negotiating with buyers, your outlook is key. Dreading the process is a surefire way to guarantee things will go awry.
“I always start by asking myself, ‘How can I make whatever discussion I’m having with a buyer a win-win for both of us?’” says Stan Vander Waal, Owner of Rainbow Gardens in Chilliwack, British Columbia, Canada. “If the winner is just on one side, you’re in danger of jeopardizing a good relationship. It’s like a marriage, you’re not in the relationship to find a way out.”
As Rainbow Gardens’ top dog, Vander Waal likes to stay involved at a high level with all the key accounts. This puts him in the position of negotiating frequently and has given him a lot of perspective on what works. He says a win-win negotiation means everyone profits. That means not being afraid to push to increase prices.
“It can be a tough discussion, and people get scared,” Vander Waal says. “The buyer is trying to buy as cost effectively as possible. They make promises to their bosses, as well. We often sadly say we can’t raise our prices, but that’s a recipe for disaster. The consumer will pay. They do it at Starbucks and everywhere else.”
Build Relationships Based on Trust
Trust is a must in any business relationship. When a vendor doesn’t deliver the right products or your shipment of plants comes in late, the business relationship suffers. This can impact how things go when it comes time to negotiate.
“One thing we look at is our history with a customer,” says Danny Gouge, Marketing Manager at Willoway Nurseries, Inc. in Avon, OH. “For example, when we book an order, does the vendor fulfill its commitment? If not, we won’t allocate as many orders on items we’re tight with. Our customers grade us on our orders, as well. When you deliver great products, you have more opportunities to sell them plants. It’s a two-way street.”
Do Your Homework
Any difficult discussion becomes a little easier when you are confident about what you want, what you need, and what you can offer in return.
“It’s not a card game of screw the dealer,” says Susie Raker, Team Leader of Raker/Roberta’s Young Plants’ marketing and product support teams in Litchfield, MI. “Your vendor needs to be successful and so do you. You need to do market research and understand the value of the product you’re buying. Knowing how much something is worth to you is the biggest thing.”
It doesn’t hurt to have data and information to back up your thought process.
“If my overall costs have to go up by 3% this year, I have to explain why,” Vander Waal says. “Some things that help are when I can point to an article or segment on the news that says interest rates are up or there are minimum wage increases. These things help build the case for what I need.”
Put the Customer First
Another important tactic is to focus on the consumer. After all, both sides want their customers to be happy.
“Our goal through any negotiation or commercial discussion is to drive consumer success and enjoyment with our products,” says Maxwell Sherer, Green Circle Growers’ Director of Sales and Marketing. “Hard conversations happen. Often, we’ve found they are diffused by refocusing on the consumer. If we look to the consumer to guide us, we can often find a rationale for why things must change. We find ways to break through the conflict and find an agreeable resolution.”
Don’t Be Afraid to Walk Away
While not everyone agrees with this sentiment, Raker swears by it. She says it’s her biggest bit of advice.
“At the end of the day, it’s just like going to a shoe store,” Raker says. “If there’s a new pair of shoes and you really want them but you’re not willing to pay the $140 price tag, it is OK to walk away. Understand the value of the product, how much it means to you, and what you’re trying to do. Everyone has a value proposition. It’s OK to walk away and still be friends.”