Negotiating With A Single Supplier

Yesterday, we had quite an engaging discussion during the LinkedIn audio event on "Negotiating with a Single Supplier."

If you missed it, don't worry! In today's newsletter, I summarize the key takeaways and insights to help you navigate supplier negotiations successfully.

Key Takeaways:

1. Major scenarios requiring negotiations with a single supplier:???? Dealing with Sole Source Suppliers - OEM, sole manufacturer, unique expertise; the only supplier capable of providing the product/service.???? Dealing with Single Source Suppliers - when we choose to work with a single supplier due to highly customized product/service, regulatory compliance, supplier consolidation, market changes or emergency situation that doesn't justify time spent going through a competitive tender.???? Dealing with Existing Suppliers - negotiating to improve supplier performance, optimize costs or adapt to changing business needs.

2. Effective strategies to adopt:

?? Preparation. Preparation. Preparation - prepare thoroughly especially when dealing with a single supplier.

?? Determine industry benchmark and trends; then set your negotiation objective or targets.

?? Set the stage - leverage competition language even when dealing with a single supplier.

?? Obtain detailed cost breakdown to understand the cost elements and negotiate from a place of understanding.

3. Value hunting:

? Look beyond price. Consider other value that can be exchanged including volume discounts and minimum order value.

? Consider instituting performance based KPIs for suppliers to identify and drive cost optimization initiatives that would lead to reduced operational costs.

? Also negotiate favorable payment terms, consider total cost of ownership (TCO) and focus on deriving value from the elements therein

4. BATNA:

Best Alternative to A Negotiated Agreement.

Define your walk away point.

There are no scenarios without an alternative.

Think, what if the supplier went bankrupt?

BATNA may be a different approach entirely.

It was quite an engaging and valuable knowledge sharing event and I am thankful to all who took out time to attend and stay the full hour!, all who asked questions and all who shared lessons learned from their experiences. So much knowledge shared!

Do ensure you stay tuned for future events. Next one will be announced pretty soon??

Thank you for being a valued member of this community. I do hope these insights enhance your negotiation skills and contribute to your ongoing success. Stay tuned for more valuable content!

PS: Feel free to reach out if you have any questions or if there's anything specific you'd like to explore further.