How Suppliers Defend Price In Negotiations
PurchTips edition #261
Have You Heard These Supplier Price Defenses?
"You have to reduce your price." If you've been in procurement for any decent length of time, you've probably said this to dozens or hundreds of supplier salespeople.
Less experienced salespeople will often panic and give in to your demands. Smart salespeople know that you are "just doing your job" and will have a prepared response. This response usually will use tactics to defend the supplier's price, delay the negotiation to put pressure back on you, or distract you from negotiating.
If you are aware of these tactics, you can understand that salespeople are "just doing their job" of trying to maximize the price. Then, of course, you can persist in trying to overcome their tactics with more negotiation.
Today's edition of PurchTips will introduce you to several common responses that salespeople may use in negotiations against you. Understand that actual words will vary, but essentially communicate the same thing. Instead of telling you what to do when you hear these, I want to encourage you take a few moments to really think through how you can respond effectively.
- "I know my price is lower than the competition's, so I don't have to change my price to be the best deal available."
- "You're not comparing apples to apples - our product/service is different and more valuable than the competition's."
- "We are the only company that provides this product/service, so we don't play pricing games - our price is our price."
- "We already factored a discount into the price we proposed."
- "I'll have to get back to you after checking with my management because I don't have the authority to offer you a lower price."
- "Is price the only criterion on which you are basing your decision?"
- "If you can get a lower price elsewhere, remember the old saying, 'You get what you pay for.'"
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Copyright 2012. This article is the property of Next Level Purchasing and may not be copied or republished in any form without the express written consent of Next Level Purchasing.
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By Charles Dominick, SPSM, SPSM2, SPSM3
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