PurchTips edition #99

In negotiation, persuading suppliers requires you to earn their respect. Confidence is key to earning this respect.

But your confidence can be shaken by being surprised by suppliers’ negotiation questions. Prepare for these supplier questions to avoid threats to your confidence.

Question #1: “Are you going to negotiate or just accept the lowest bid?” Suppliers ask this prior to sending proposals so they know whether to offer their true best deal or a “padded” price to be negotiated lower later. Question #1 is tricky: you naturally want suppliers to offer their best deal, yet stating an intent to negotiate will keep you from getting the best deal right away. But saying you won’t negotiate and later negotiating is dishonest and unethical. So respond with something like: “It depends. We reserve the right to negotiate. But if it’s clear that we’ve been offered the best possible deal, we may accept that proposal without negotiating. I encourage you to submit your most competitive offer to maximize your chances of being considered.”

Question #2: “Are you the decision-maker?” Suppliers hate negotiating with someone who doesn’t make the final decision. They fear that their selling points will be lost, their work wasted. So they often circumvent the purchasing process, avoiding the buyer and contacting an executive directly. This sales practice is unfair to the buyer, unfair to other suppliers, and can result in not-fully-informed decisions. As such, you should pre-empt this sales behavior and definitely not reward it. A good response to Question #2 is something like: “We make decisions as a team. However, I’m your point of contact. All discussions about this project must be coordinated through me.”

Questions #3 & 4: “How does my proposal look?” and “So if I improve this aspect of my proposal, do we have a deal?” Suppliers often ask Question #3 before you select the successful bidder. A buyer’s usual response cites one unacceptable aspect of the supplier’s proposal such as “Your price is too high,” which invites Question #4. If you answer Question #4 before completing your proposal review, it can put you in an uncomfortable position. Saying “no” creates several negative impressions: that you aren’t the decision-maker, that you’ve unethically pre-selected the successful bidder, and that you’re bluffing about an acceptable proposal aspect. Such impressions can diminish the supplier’s respect that you need to be persuasive. So don’t provide feedback on a supplier’s proposal and allow Question #4 to be asked until you’re ready to negotiate. Simply answer Question #3 with something like “Our proposal review process is not yet complete, so I can’t fairly answer your question.”

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