Doing The Dance

Today we finally came to an agreement on the warehouse rental after the landlord submitted his proposal. The lease he proposed was fair and thought I have been left hanging for 6 weeks so there has to be some wiggle room. Up till now the landlord had said don't worry every time I had called which made me worry even more. Negotiations are generally fun and I was not going to let him get away without some type of change to the lease agreement.

The market price is currently between R35 ($1.75) and R100 ($5) per squared meter and I have the rental now for the next 6 months at R28 ($1.40) per square moving up to R30 ($1.50) there after. This is why I was holding on to what we had because the rental is seriously cheap. This warehouse is no beauty, but more importantly it comes under budget and serves our needs.

It was more about not being dictated too and if we need to negotiate anything in the future he needs to know there has to be some form of negotiation involved and not just accepting whatever he stipulates. This may seem like nothing really, but this adds up to around a R26K ($1.3k) saving over the 6 month period and helps claw back the budget. When you do this across the board with every supplier you will be amazed how much savings you find and these add up very quickly. Luckily I can add up things instantly in my head and always manages me to get an upper hand when prices are being negotiated.

The accountant who had been advising us from the old company which we took over from was absolutely useless. In the end I just picked up the phone and bypassed him entirely. I was the one who got this building for them in the first place back in 2018/19 and negotiated their rental agreement. I had already stepped away from the business and this was just a favor I had done for them. The rental agreement was that cheap back then even with the added increases annually it is still cheaper than any other warehouse I have seen advertised in the area.

A close friend of mine in the logistics business asked me for help obtaining some prices on 10000 A3 Courier bags monthly. I knew his current purchase price and I was given a screen shot from my other friend on what his company pays. They are both friends so I make nothing out the deal myself and what was fair is I split the price down the middle and they are both very happy. This deal makes $350 for the seller and saves $350 for the buyer monthly which again is not huge ,but it is still extra money in their pockets each month.

Negotiating is something we should all learn how to do and the more you do it the better you will become. In business I do tend to enjoy this part over everything else because when this is done properly it will either save you a fortune or make you a fortune. Profits are made when you do the purchasing and not the selling and why some companies are not competitive anymore. Money is hard enough to make so the price you are paying for an item even if you are manufacturing buying raw materials is critical to the overall profit you will ultimately be making.

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