PurchTips - Edition # 26

 

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Power Negotiation Made Easy

By Charles Dominick, SPSM, SPSM2, SPSM3

Can You Be A Tougher Negotiator?

Many of us purchasing professionals sometimes feel that our negotiation style isn't "tough" enough. We feel that we could deliver better results if we had a more powerful negotiation style. But there is a misconception that "tough" negotiation requires an intimidating personality or superior on-your-toes thinking. Not true.

You can use these firm techniques to create the anxiety necessary to persuade a supplier to concede to your requests without being a "bull-in-a-china-shop":

Deadlines – Even though many negotiation books advise you to avoid deadlines, they can be very advantageous if used correctly. Having an absolute time by which your supplier must have its best and final offer on the table or risk losing the business will accelerate your receipt of the best deal. This principle is one of the reasons that reverse auctions are so effective.

Next Step Prerequisites – Suppliers will gladly haggle over less significant issues like packaging requirements, on-time delivery criteria, etc. to delay discussing the "big" things like price. By telling your supplier that you will not discuss peripheral issues until there is a satisfactory improvement on the significant negotiation points, you will get your supplier to his or her bottom line more quickly.

Use Cooling Off Periods – Some negotiations can drag on for months with little or no progress. This is usually because the supplier feels that you are "sold" and that you will no longer be able to delay acquiring the product or service. If you want to regain your leverage, tell your supplier that you are going to suspend contact with the supplier for seven days while you reassess the situation and your alternatives. Suppliers hate to be out of touch. A break from negotiations may persuade the supplier to reevaluate the importance of your business. In best-case scenarios, just the threat of a cooling off period will get your supplier "off the dime."

Use common sense when considering these techniques. They work best when you have alternatives to doing business with your negotiation counterpart and may not work well in all situations. Good luck!

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