How to Improve Supplier Negotiations with Data Analytics

Great supplier relationships are all about win/wins. When you both get something out of the relationship, you’re more willing to work together and help each other. One way to find this common ground is through data.


Data analytics can be a powerful tool to help improve supplier negotiations. By understanding past patterns and trends, businesses can have more informed conversations with suppliers and create best-case scenarios.

Here are some ways you can use data to improve supplier relationships and gain leverage in negotiations.

Use Data to Infuse Transparency in Conversations

Data gives you transparency into your operations, financials, and other areas of your business. But that transparency can also spill over into supplier negotiations.

For example, if you’re ordering a high volume of parts or supplies from one supplier, you may be able to negotiate more favorable pricing or priority fulfillment.

Your suppliers already know how much you’re ordering from them. But what they don’t have access to is how much you’re ordering from other vendors. Having an easy way to compare order volumes can help to bring transparency into the conversation. You can show what you’re paying for similar items from other vendors and how often you’re ordering those items, then negotiate better pricing if you were to consolidate your orders with a particular supplier.

There’s also the matter of being able to demonstrate poor supplier performance. Comparing one supplier’s slower lead times, delivery delays, or other performance issues with your other vendors may give you some bargaining power when it comes to contracts. 

When suppliers know how you rate their performance – and have the data to back it up – they can better understand your expectations and priorities. This allows them to make more impactful offers that support your business and their own bottom line.

Shorten Negotiations

Negotiating new contracts, new rates, or other terms with suppliers can be a lengthy ordeal. Data analytics can shorten this timeline and ease some of the heavy lifting on both sides. 

For starters, effective negotiations require both parties to understand the needs, priorities, and expectations of the other. Your internal data can show how instrumental an existing supplier has been to your organization and put their contributions into perspective. 

Suppliers can also gain a better understanding of their own competition and what makes your organization choose competitors for various items.

Being able to make data-driven decisions about price, fulfillment times, order minimums, and other factors can give you a stronger position at the negotiating table. It also allows you to see whether a vendor relationship is in your best interest or whether you should pursue other options.

How VirtuTrax Empowers Your Supplier Negotiations

Overall, data analytics can give businesses a leg up in supplier negotiations by providing insights that can be used to improve your negotiating tactics and strategies. Having access to accurate supplier data as well as your own internal data makes these negotiations all the more impactful. 

VirtuTrax takes a different approach to data access by connecting directly with supplier ERPs for real-time insights into tail spend, timelines, bottlenecks, and other contributing factors. Get in touch to see VirtuTrax in action.

VirtuTrax is an Aeromed Group Company