The Negotiation Before The Negotiation, Part I

Are You Truly Prepared To Negotiate?

PurchTips Edition #419

When preparing for a negotiation, it is common to identify the issues to be negotiated, decide on negotiating tactics to use on your supplier, think through what your supplier may say and practice saying the words you’ll use during the negotiation. Those are all necessary components of negotiation preparation.

But, they are not enough. To truly reach your potential in a negotiation, you need to understand some key things about your supplier. This three-part PurchTips series will focus on three major things you need to know about your supplier before beginning a negotiation. How do you get to know them? You can research your supplier and/or you could – get this – ask your supplier contact!

If you need to ask your supplier contact, you would ideally ask him/her in person, as you’re most likely to get an honest answer. Learning these things can be a negotiation in itself. And, communicating in writing during a negotiation allows your counterpart too much time to think and provide answers intended to influence you rather than answers intended to give you exactly the information you need to influence your counterpart! Here is the first of the things you need to know about your supplier. Two more will be coming in the next edition of PurchTips.

What is your supplier’s priority?  When many people think of sales, they think that the priority of a sales organization is to get as high a monetary volume of sales as possible, irrespective of anything else. And, yes, sometimes that’s true.  But, other times, it’s not. Some sales organization’s place a higher priority on gross profit. Others’ priority may be increasing market share or landing a well-known client. You cannot reach your potential in negotiating with a supplier unless you know what its priority is. Knowing a supplier’s priority helps you determine how flexible a supplier is likely to be when a supplier is bluffing and what other concessions you can pursue when a supplier no longer concedes to your requests for improvements on certain terms like the price.

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Copyright 2018. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.

By Charles Dominick, SPSM, SPSM2, SPSM3