PurchTips - Edition # 218

 

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Tips For Negotiating With A Sole Source

By Charles Dominick, SPSM, SPSM2, SPSM3

Do You Dread Negotiating With A Sole Source?

Buyers often dread sole source situations because they think they don't have leverage in the negotiation. But that doesn't have to be the case. Here are some strategies for negotiating more effectively in sole source scenarios:

  1. Find out what motivates the vendor and make it win-win. Every vendor has underlying motivations for closing a deal. For example, it may be their end of quarter; they may have a stated goal to grow recurring revenue from license agreements or maintenance; the sales person may need the deal to achieve their quota. If you can find out what makes it attractive for a sales rep to close the deal - and the timing of those motivators - you can leverage that and trade for concessions.
  2. Look for small "value adds" to enhance the deal. Once vendors know they are getting a deal in a sole source scenario, they are less likely to negotiate on pure price. But they often will add small things to the deal, which can be of real, tangible value to you. Your requests might include complimentary training hours, extended warranty periods, and extra services. You'll be surprised how often vendors will add these to the deal at no cost.
  3. Create tiered risk/rewards scenarios for Service Level Agreements. Vendors often will agree to service and performance levels - and put some skin in the game on the risk side - if they stand to be rewarded with more revenue for exceeding performance expectations. You can create a motivation for the vendor to perform well, and this is a "win" for you.
  4. Agree on an objective price adjustment method for the future. Sole source situations can lead to repeated, futile negotiations and unreasonable inflation year after year. Strive to agree in writing that any future price changes will be based on the changes in independent indices or pricing data published by industry organizations or associations. This prevents you from being "beaten up" by the vendor every year.

Sole source negotiations can be challenging, no doubt. But these tips can help you achieve a better deal.

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Spotlight On Professional Development Opportunities

SPSM Certification

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

You see, today's employers refuse to reward employees for yesterday's skills.They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.

Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

So how can you acquire the most modern skills, achieve meaningful results, and convincingly prove your capabilities to today's employers? There is an impressive purchasing certification program that will teach you what you need to accomplish all of this and more. It is the SPSM® Certification, earned by completing the Senior Professional in Supply Management® Program. And you could earn it in less than a year - maybe even much less than a year!

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) at:

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices  into your organization and achieve your career potential. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

  • FREE $30 gift certificate to Amazon.com!
  • FREE CD-ROM with printer-friendly versions of the class materials!
  • FREE Purchasing Performance Measurement spreadsheet template!
  • FREE audio CD about purchasing job security!

To learn how to earn your SPSM® Certification and get these valuable bonuses, visit:

Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

www.NextLevelPurchasing.com/spsm.html



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This Starter Kit gives procurement professionals like you a clear idea on what it will take to become certified. You'll get an excellent feel for what you will need to learn and how long it will take.

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Included in your free Starter Kit:

  • Access to two lessons from courses that are part of the Senior Professional in Supply Management® Program
  • A Certification & Training Planning Template
  • Case studies
  • A free Basic Membership in the NLPA

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So, what are you waiting for? Begin your pursuit of a more rewarding procurement career – get your Procurement Training & Certification Starter Kit now by signing up for a free NLPA Basic Membership!

If you are already a member of the NLPA, click here to login and visit the "Starter Kit" tab to access these resources.