Negotiations … Purchasing Style recently ran their fifth installment in their strategic sourcing series – How to Negotiate with Suppliers – which presented a number of tips for successful supplier negotiations. According to the article the following five points are key:

  • Know the Market
    The right data allows a sourcing manager to develop a strategy that has a high probability of reducing cost and minimizing risk.
  • Be Collaborative
    Remember that the ultimate goal of any negotiation is to get the supplier’s representative to go back and sell the deal. Consider a neutral location.
  • Go for a win/win
    Negotiations are most likely to succeed if everyone feels they are getting a good deal.
  • Keep things fair
    Don’t try to strong-arm or intimidate suppliers at the negotiation table. They’ll just get defensive, and we already know a collaborative spirit is important.
  • Aggregate spend
    Knowing your complete spend up front will give you some leverage in negotiations.

and the following tips should also be kept in mind:

  • Aim for long term relationships
  • Be ethical and honest
  • Be patient; Talk Less, Listen More; Ask Questions
  • Set a Deadline
  • Don’t be Afraid to Say No

This is good advice … and we’ve found that our customers who employ these tactics are generally quite successful.

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