A Key To Bargaining With Suppliers
PurchTips edition #258
By Charles Dominick, SPSM, SPSM2, SPSM3
Can You Overcome Suppliers' Bargaining Tactics?
There are many keys to successfully bargaining with suppliers: preparing thoroughly, learning an arsenal of techniques, being able to think quickly, communicating persuasively, and so forth. One of the most important keys that I'll talk about today is persistence.
Persistence is necessary because suppliers who bargain well wear down their procurement counterparts through these tactics that put buyers' persistence to the test:
- Ignoring. When you bargain for an improvement to pricing or terms, your supplier may behave as if they didn't even hear your request. This is particularly easy for suppliers to do if you try bargaining by email (which I don't recommend for critical negotiations).
- Diverting. When you bargain for a reduction in price, a common supplier tactic is to divert your attention to another business issue. For example, the supplier may say "I can't really discuss price until I understand how the arrangement will work and the value that you are seeking to get out of the arrangement."
- Delaying. When you bargain for an improvement to pricing or terms, a supplier representative will often say "I gave you the best price/terms that I am allowed to give. I'll have to check with senior management to see if we can do any better." Because the supplier creates the impression that nothing further can be accomplished through the conversation, the supplier gets you to stop bargaining in the hopes that you will not ask again before awarding the order or contract.
Suppliers know that weak procurement negotiators only ask for improvements to pricing or terms once and often end up awarding the order or contract to the supplier even if the supplier didn't budge. Prove that you are a strong negotiator. Be persistent. Ask again. And again, if necessary. By showing how important it is to get what you want, you will increase your chances of getting it.
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