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My employer is a small software company that builds enterprise application software. I am a dev manager, managing a team of about 10 developers. One thing I always feel uncomfortable with is that our sales team likes to haggle with our software vendors, whose product is integrated into our final product.

For example, they charge us based on how many users we have, 1000 users at one price, and 10,000 users at another price. Then our sales team will say, oh we will only have 5,000 users at most, so either you change the price model or you give us a lower price for 5000 users.

I feel uncomfortable because a) I feel/know the price is reasonable. We have worked with this vendor for 3 years. Their product and technical support are quite good so I feel their price is reasonable. b) we feel our own sales team doesn't value the hard work of our software developers. To exaggerate that point a little bit (and a true story): I once told them that we worked hard for two months and you guys only sold our work for that little money?! Sometimes we would half-joke to them, please developers' lives matter too.

Of course, I know the competition is fierce here in China and they probably just do their job. So is it common in other countries that the sales team haggles with software vendors?

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    I don’t want to overgeneralize but in my experience, negotiation in b2b sales is a pretty standard practice. The larger the client customer, the more leverage they have. Feb 3, 2023 at 7:02
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    "How can I make peace with that?" Why do you look at the sales figures anyway? It's nothing you need to know as a development manager. Just ignore it, it's nothing you need to concern yourself about.
    – jwsc
    Feb 3, 2023 at 7:05
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    In Europe and the US, developers are paid by the hour and salespeople try to get the best value for the company. As a developer, I am paid the same, no matter what price the product in the end has (case in point, my current project is an app that is free) Are developers in China paid by what the product makes?
    – nvoigt
    Feb 3, 2023 at 7:06
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    I wouldn’t necessarily equate “haggling with vendors” to not valuing developers. If your company saves on external vendor expenses, that (potentially) means more money to invest in you and your team. Feb 3, 2023 at 7:07
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    OP might be confusing sales with purchasing/acquisition. If I read this correctly, his purchasing people are trying to get better deals on software supplied by vendors. In that case - yes, this is very normal, and I suspect in China moreso than in other areas. It is also not something you should worry about because the other side knows what the job of Purchasing is. It comes with the territory. At least most of the question swings that way, only point 3) goes the other direction.
    – Mookuh
    Feb 3, 2023 at 10:45

4 Answers 4

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Your question is a bit hard to read, but I'm assuming that what you're asking is...

Is it normal for the sales team to give discounts to clients.

Yes, absolutely. That's why Business to Business products will often not have the price listed on the site, but have a "Contact us for a quote" link. The business doesn't want a client to know that one customer is paying twice what another customer is paying. It boils down to two options...

  1. Your sales team is good and knows that the customer would never pay full price no matter what and they're getting what money they can.
  2. Your sales team is terrible and they're failing to convey value, which makes it hard for them to justify charging full price in sales meetings.

It could be either of these things and probably some combination. Without knowing a lot more about your product and the industry, it's hard to tell.

As for making peace with it and teaching them that developer's lives matter... trust me when I say that sales is always trying to get the most money they can from the client. No matter what they think of you, it won't affect their pricing, they'd never leave money behind if they actually thought they could get their hands on it.

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  • Which part of my question is hard to read? I will edit it. When I know our sales team sold our product in such a low price while we work day and night to make it, I really feel bad. Feb 3, 2023 at 7:38
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    They sold it for the best total profit they could get. That's a win. Given how many products never get out the door, it's a very significant win. Sales doesn't design products, you don't set price.
    – keshlam
    Feb 3, 2023 at 7:52
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    +100 for the last statement! The sales team's job is to sell product at a profit for the company. Minimal profit is better than none. Also, sales people are often (but not always) given a commission on their sales, so they're highly motivated to get the sale.
    – FreeMan
    Feb 3, 2023 at 18:38
  • @Qiulang邱朗 Did the company make enough money to pay for your development team? (Wages, desks, computers, electricity...) And enough to make some profit? If they did, the sales team did their job. What more do you want?
    – Graham
    Feb 3, 2023 at 23:28
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This is pretty common - If I talk to a Vendor, I'll get the standard price, then I tell him that the scope of the deal is for 10,000 seats and that I want a better price otherwise I'm off to talk with his competitor.

Once you hit a certain size and represent a decent recurring revenue stream, then you get to lean in on your vendors and play hardball.

Case in point, we negotiated a particular deal with a Software vendor, we were happy - it was a good deal, then we merged with a much bigger overseas entity and we saw the deal they had with the same software vendor - they had about 10 times the number of licences we had, and they paid about half the price per licence.

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  • Thanks for sharing that story. It makes me feel better. The thing is (I forgot to mention in my original question) we have work with this vendor for 3 years so I feel their price is reasonable and their technical support is quite good. Feb 3, 2023 at 7:53
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    @Qiulang邱朗 That's fine, and no one on either end is worried by the negotiation. It's absolutely commonplace to have back and forth like this at a certain size. It's their sales team's job to sell as much as possible at the best price. It's your purchasing team's job to get the most out of them for the best price.
    – lupe
    Feb 3, 2023 at 14:27
  • Your example doesn't seem to demonstrate much to me. It's exceedingly common to charge (often much) less per item when selling greater quantities, and this is often/usually not even considering negotiation, as bulk discount is included in the default prices anywhere from software licenses to items in a supermarket.
    – NotThatGuy
    Feb 3, 2023 at 16:01
  • It's pretty standard for a multi-year software contract to be for X currency in year 1, then X + 10% in year 2, X + 8% in year 3, etc, allowing for inflation hitting the cost of the company's payroll, taxes, etc. Very common.
    – FreeMan
    Feb 3, 2023 at 18:40
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Is common in other countries that the sales team haggles with software vendors?

Yes, it is.

how can I make peace with that but also make the sales team realize developers' lives matter too?

It is up to the CEO and the boss of the sales team to decide the prices of the software.

Each departments in the company has a different responsibility. The sales team does not tell the developers how to write code and test code. So, the developers should not tell the sales team how to set the prices for the products.

Definitely, all sales teams in the world always want to maximize their prices to maximize the profits whenever possible. They are hired for that reason.

However, sometimes, the sales team may need to give some customers low prices for various reasons as follows:

  1. The competitions are so fierce. So, your company needs to temporarily lower their prices to keep loyal customers. Then, your company may increase the price later when the market is growing.
  2. Your company may just enter a new market, and need to sell at a low price to attract new customers.
  3. Sometimes, you sell at a low price in the beginning as the introductory price. Then, after 1 year, the customers realize that your product is one of the best in the market, and they really want keep the subscriptions or to buy more of your products, then you gradually increase the prices to start earning profits.

we feel our own sales team doesn't value the hard work of our software developers

This is the wrong way to look at the issue.

The fact that developers are paid the same salary regardless of how low or high the sales team set the software prices proves that your company always appreciates the hard work of the developers.

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  • What you said makes sense but I am not fully convinced "This is the wrong way to look at the issue"(yet). I feel bad that our hard work is just worth that much of money. Feb 3, 2023 at 9:17
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    @Qiulang邱朗 What do you mean, "that much money" ? The fact that the company is still running and that your team and all the other employees are getting paid is pretty much proof that you work is sold at the correct amount.
    – Jemox
    Feb 3, 2023 at 16:25
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This is perfectly normal, and is in fact on of the main reasons you have a procurement team.

You have to distinguish between working with the company and negotiating a price.

Normally, you have your procurement team and the seller has their sales team. Those two can negotiate quite hard (and there are even people in these teams that like it) but this should not influence your work with the technical people of the supplier. Think of it as a bit of "good cop/bad cop" game. You are the good cop and tell the supplier that you'd love to work with them, but you can't buy yourself, but have to ask the 'bad cop' procurement team.

Moving these discussions to the other teams means that you don't have to have this difficult discussions with the supplier. See it a bit like a proxy war (https://en.wikipedia.org/wiki/Proxy_war).

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