The Price is Right?
How to Score the Best Deals from Your Suppliers
Working in procurement, you will have an awareness of the importance of negotiating with your supplier base. Negotiating with suppliers can ensure that you achieve better deals and form solid long-lasting relationships, this is incredibly important, especially in the current economic climate. However, as a procurement professional, you will know that it can often be challenging negotiating with suppliers who have a firm understanding of their industry.
This article will examine some key techniques for negotiating, to ensure you are armed for any negotiation and can achieve better outcomes.
Research
Successful negotiations begin days, even weeks before you meet with your supplier. The best negotiators don’t simply turn up and hope for the best, they are armed with information on the supplier, as well as the current macroeconomics, which may include the industry as a whole and the key competitors. This will give you a much better grasp of the negotiations as possible, as well as enabling you to understand how much leverage you have as a buyer. Keep up to date on the news and market insights to ensure you have as much information as possible, ?do a search for tags on LI and twitter for example to keep your finger on the pulse.
领英推荐
Set Goals
As part of your preparation, be aware of what you are trying to achieve, as well as how much you are willing to concede. Ensuring that everyone who will be in the negotiation has a clear understanding of the objectives will focus the negotiations to those aims. Equally, it is as important to know your BATNA (best alternative to a negotiated agreement). This is your “walk away” point and it is imperative that everyone is aware of this, as it will mean conceding less.
Compromise
It helps to look at the situation from the supplier’s point of view. In the current economic climate, it is all too common for suppliers to raise their prices in order to meet their own costs and keep their margins healthy. Therefore, listening and understanding a supplier’s priorities and a willingness to compromise will build trust and forge healthy, ongoing relationships. Compromising can also be a way of achieving more on other goals within a negotiation, as well as long term aims and objectives.
Summary
Negotiating with a supplier is a core part of working within procurement. Following the practices identified here, as well as grasping a fundamental understanding of negotiation styles and tactics, will ensure that you are well positioned in any negotiation situation. It is important to understand that negotiation is a process and building relationships takes time and patience. Overall, a careful approach will ensure you are able to negotiate like a pro.