PurchTips - Edition # 213

 

This is the Web-based version of this article. Click here for the printer-friendly version.
* More Purchasing Articles

Picture of Charles Dominick, SPSM, SPSM2, SPSM3

Negotiation Techniques With A Shelf Life

By Charles Dominick, SPSM, SPSM2, SPSM3

Can You Time Your Negotiation Techniques Right?

While the global economy teeters between growth and a double dip recession, this may be your last chance to use a few negotiation techniques that work extremely well in rough economic times. Here are three techniques that you can still use effectively before the economy truly does improve.

"Make The Supply Chain More Competitive." It can be a challenge to get direct materials suppliers to be excited about reducing prices and improving their terms for you. However, if your organization loses deals because customers consider its proposals "too expensive" and your supplier competes with the suppliers of your organizations' competitors, helping your suppliers see that slightly lower prices can result in significantly higher volume through more deal wins by your organization can make negotiation easier. This technique is extremely effective because you and the supplier are on the same team seeking mutual gain.

"Share In The Sacrifice." Suppliers are never happy to trim their profit margins solely just to make their successful customers even more profitable. However, if you can point to layoffs, salary reductions, and budget cuts in your organization as evidence that your organization isn't negotiating strictly out of greed, it can make suppliers feel more sympathetic than defensive.

"Forced To Consider Competition For Everything." Few things strain buyer-supplier relationships more than the threat to switch suppliers or competitively bid deals with current supply partners. However, the threat of competition is sometimes the only technique that motivates suppliers to reduce costs. In such situations, discussing how economic conditions have forced your organization to reevaluate market pricing for everything it buys can make aggressive negotiation feel less like a personal attack, thus limiting damage to the relationship.

Do You Want a More Rewarding Procurement Career?

Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.

Earning your SPSM® Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!

Download

Need Better Performance From Your Procurement Team?

Are you a procurement leader whose team isn't achieving the results you know are possible? Maybe it's not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.

You need a performance improvement plan that's easy to implement and quick to produce results. The NLPA can help.

Download our whitepaper "The Procurement Leader's Guide To A More Successful Team." You'll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.

Download

Are You Getting The Most Out of Your NLPA Membership?

Members of the NLPA get more than just articles like this by email. As a member, you also get access to:

  • The Procurement Training & Certification Starter Kit
  • The latest Purchasing & Supply Management Salaries Report
  • Leading-Edge Supply Management™ magazine
  • Members-only webinars 10x per year
  • And more!

If you haven't been taking advantage of these benefits, why not log in and start now?

LoginJoin