The Negotiation Before The Negotiation, Part II

Do You Know Enough About Your Supplier?

PurchTips Edition #420

In the previous edition of PurchTips, I wrote about the need to know about your supplier as a key part of negotiation preparation.  I also introduced the first of three specific things you need to learn about your supplier prior to negotiating.  Here are the other two things:

  1. Who is the decision-maker? Your negotiation strategy can involve persuading your counterpart to change his/her mind, giving your supplier the ammunition necessary to lobby a behind-the-scenes decision-maker to change his/her mind, or demanding to deal directly with the decision-maker.  If you don’t know who the decision-maker is, you can’t know which strategy to use.  And, if you use the wrong strategy, you aren’t likely to succeed.
  1. What deadlines does your supplier have? Deadlines are powerful in negotiation.  Many times, a party to a negotiation is willing to concede on something they long defended simply to conclude the negotiation before a deadline.  You can use this to your advantage.  But only if you know the deadline that your supplier needs to meet!  Situations that may drive supplier deadlines include things like:  Wanting to meet a sales quota for a month, hoping to close a big deal by the end of a quarter so that executives can report it on a quarterly conference call with investors, desiring to begin production before vacation season disrupts the number of production employees available to work on your order and so forth.  As you can now understand, there can be many reasons why a supplier may want to conclude a deal sooner rather than later.  There’s also the possibility that your organization may be in more of a hurry than the supplier.  Knowing deadlines can feed brilliantly into your negotiation strategy.

I know that some of you reading this article have never probed a supplier for the valuable information discussed in this and the previous edition of PurchTips.  So, Part III of this series will provide sample questions you can ask your supplier. Stay tuned!

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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