PurchTips edition #112

Improving your negotiating results doesn’t need to be complicated. These three easy negotiating tactics work!

Tactic #1: Don’t Use All of Your Ammunition at Once. There may be several logical reasons for a supplier to reduce his price: ordering early, being eligible for a multiple-product-purchase discount, etc. Suppliers will often try to convince you that their first price reduction is a great deal that you should accept. So if you used all of your reasons for getting a price reduction at once, the supplier has more power to defend his price and you have run out of reasons for getting a lower price. So follow these steps:

• Know the reasons for requesting a price reduction
• Decide the sequence to introduce those reasons
• Ask for a price reduction based on one reason
• Thank the supplier after getting it
• Ask for a better price for another reason and repeat

Tactic #2: Ask About The Supplier’s Questions. During a negotiation, the supplier will ask you questions. For example, when trying to decide by how much to reduce his price, the supplier may ask you: “When did you want delivery to take place?” It would be easy to say “In two weeks” and leave it at that. I’d respond by saying, “We originally wanted delivery in two weeks, but does our delivery timeframe make a difference in our pricing?” If the answer was “Yes,” I’d follow up with “What delivery date will qualify us for the best deal?”

Tactic #3: Listen To Suppliers’ Dialogue. I never endorse “spying” – listening to or recording someone’s conversations against his wishes. But I feel that cell phone calls made in your presence while negotiating without a privacy request are fair game for listening.

In such conversations, you can pick up clues about the factors the boss is considering in revising his offer. For example, let’s say you hear the salesperson say “No. They’ll be paying 100% upon completion instead of a down payment.” From this, you can tell that payment terms affect your pricing. So you can say “I overheard you mention payment terms. How might altering our payment terms help us get a lower price?” This tactic often uncovers otherwise hidden savings opportunities.

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