Negotiations play an important role in the overall procurement process with agency suppliers. Negotiation is a process that is both an art and a science and should ultimately lead to a win-win situation on both sides of the table. This article gives you a heads up of what great negotiators do and why they are successful.
- Research the actual cost:
There is no better position to be in when negotiating a price than to understand what it costs the guy on the other side of the table to create whatever he is selling. By determining the value to make the product, you then can have a way higher idea of how much wiggle room you have in context to negotiating.
Have a good understanding of price and cost analysis. Accordingly, you can know whether the supplier still making a reasonable gain and still provide the goods or services to you without any decline in quality, speed and time.
- Get references from other customers
Carry out some vigor before approaching any supplier. Analyze their customer service level and product quality by conversing with their customers. Your potential supplier would happily provide you the contacts if he is proud of his services. However, keep in mind that he will be unlikely to see you in touch with a dissatisfied customer.
In addition, do review potential suppliers’ performance histories and past relationships with the retailers. Doing your homework will put you in a right direction while choosing your vendor.
3. Keep a light conversation
You never want to let negotiations become too serious & tense. Always feel free to smile and make your conversation more humorous. By lightening the mood, you can ingratiate yourself with your opponent while also conveying the negotiating strength.
Never respond too quickly to an offer. Pausing or perhaps suspending negotiations can convey that you are not desperate to close the deal as you have different options to choose from. Silence can force a surprising amount of pressure on the other party as well.
- Be in touch with other suppliers
In order to encourage competitive pricing, seek advice from minimum of three suppliers and let each of them understand that you are getting alternate quotes too. Explain to them that you will go with the supplier offering the most competitive bid. Don’t forget to take quality into consideration when considering the bids.
- Include a lot more
A great way to win your negotiation over price is to include other items. When you reach an impasse in your negotiations, an offer to buy multiple quantities of items or additional items may trigger flexibility on the part of the seller.
The seller may desire to lose a customer if it’s a single item. But when a seller observes an opportunity to deal with a much larger transaction, there is a much greater likelihood he will be agreed to a lower price.
6. Walk Away
This is perhaps the most powerful move you can take right away. In this economy, a handful business can afford to lose a sale, and are afraid to let someone go away without buying anything. Above all, this offers you the upper hand in all your negotiations.
Sometimes, simply heading towards the door or verbally ending negotiations is enough to inspire a lower offer. Even if you leave, the seller may bring you back in or call you if you leave contact information. It’s an extreme plan of action, however it works.
But, the problem is that if you walk away once, it is quite difficult to go back. If the seller has a distinct product and you have no other choices, you can’t go to someone else. However, if you return, the power would have already been shifted to the seller. They will understand that you are motivated to purchase from them, and they don’t need to make any major concessions. Hence, utilize this tactic only if you are willing to simply not make the purchase.
Don’t miss out getting jaw-dropping deals from your vendors and great margins. Master these negotiation skills and give your best shot in the next meeting!
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