A Sole Source Supplier Negotiation Strategy

Do You Adapt Your Negotiation Strategy For Different Suppliers?

PurchTips Edition #355 Click here for the printer-friendly version

Don’t miss updates on Procurement & Supply Chain, Subscribe here!

When negotiating with sole source suppliers, you need a different negotiation strategy than you’d use in competitive situations. That negotiation strategy requires that you learn what the supplier’s interests are, probe for latent cost savings opportunities, and try to discover ways to create mutual value. Your findings can position you to make the negotiation more of a collaboration, where you team up with the supplier to brainstorm ways to maximize the benefits for both parties.

At the center of any good sole source supplier negotiation strategy is a series of questions. Those questions should extract valuable information that you can use to structure a great deal with the supplier.

Based on a recent on-site training session I conducted alongside Dr. Soheila Lunney, my co-author for our book The Procurement Game Plan, here are some questions you can ask a sole source supplier in the context of a negotiation:

  • Why do you want to do business with us?
  • What good things are your other customers doing that we’re not doing?
  • How much does the timing of our commitment matter?
  • How does the duration of the contract impact your flexibility with the price?
  • How do our specifications or other terms impact your flexibility with the price?
  • What creative ideas do you have for us to do business more cost-effectively?
  • What can I do for you to bring value to your company?
  • What are examples of invoiced line items that some of your customers have referred to as “hidden costs?”

 

final

Want to get more procurement articles by email?

Members of the NLPA get great articles just like this by email every month. As a member, you will also get access to:

  • The Procurement Training & Certification Starter Kit
  • The latest Purchasing & Supply Management Salaries Report
  • Leading-Edge Supply Management™ magazine
  • Live webinars
  • Access of Purchasing Community
  • Access of NLPA BLogs
  • Access of Library (Webinar Replays, Procurement Templates & More)
  • Access to All 20 Express Courses worth $380.00
  • And more!

Sign up today and enjoy access all of the benefits that come with the NLPA Premium membership.

Procurement Courses
Over 281,000 purchasing professionals have joined the Next Level Purchasing Association! So, what are you waiting for?


Copyright 2016. 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



 
 
 
 
Webinar