The negotiation before the negotiation!

When preparing for a negotiation, it is common to identify the issues to be negotiated, determine negotiation tactics for your supplier, consider what your supplier might say, and practice saying the words you will use during the negotiation.

those are all necessary components of negotiation preparation.

But they are not enough. To really unlock your potential in a negotiation, you need to understand a few key things about your supplier. This article focuses on three important things you need to know about your supplier before starting a negotiation.

How do you get to know them? You can research your supplier and/or you could – get – ask your supplier contact!

If you need to ask your supplier contact, ideally ask them in person as you will most likely get an honest answer. Learning these things can be a negotiation in itself. And communicating in writing during a negotiation leaves your counterpart too much time to think and provide answers designed to influence you rather than answers designed to give you the exact information you need to influence your counterpart!

Here’s the first thing you need to know about your supplier.

What is your supplier’s priority?

When it comes to sales, many people think of a sales organization’s priority of achieving the highest possible monetary sales volume independently of everything else.

And yes, sometimes that’s true. But sometimes it’s not. Some sales organizations place a higher priority on gross profit. For others, increasing market share or landing a well-known customer may be a priority. You can only exploit your potential when negotiating with a supplier if you know their priorities.

Knowing a supplier’s priority can help you determine how flexible a supplier is likely to be when a supplier is bluffing, and what other concessions you can make when a supplier fails to meet your improvement requests on certain conditions, such as price.

Two other specific things you need to learn before negotiating about your supplier are:

Who is the decision maker?

Your negotiation strategy can be persuading your counterpart to change their mind, giving your supplier the ammunition needed to get a behind-the-scenes decision-maker to change their mind, or requiring you to negotiate directly with the decision-maker . If you don’t know who the decision maker is, you can’t know what strategy to use. And if you use the wrong strategy, chances are you won’t succeed.

What deadlines does your supplier have?

Deadlines are powerful in negotiations. Often a negotiating party is willing to admit something they have long defended, only to close the negotiation before a deadline. You can use this to your advantage. But only if you know the deadline your supplier has to meet!

Situations that can extend delivery times include things like: Desiring to meet a month’s sales quota, hoping to close a big deal by the end of a quarter for executives to report on on a quarterly conference call with investors, the desire to start production before the holiday season disrupts the number of production workers available to work on your order, and so on.

As you now understand, there can be many reasons why a supplier might want to close a deal sooner rather than later. There is also a chance that your organization is in a hurry than the supplier. Knowing about deadlines can be a great fit for your work negotiation strategy.

I know that some of you reading this article have never screened a supplier for the valuable information discussed so far. Therefore, we provide you with sample questions that you can ask your supplier to extract this information.

Again, I must emphasize that you should ask these questions in person, not in writing. Written communication during a Negotiation gives your supplier too much time to prepare answers meant to influence you instead of giving you the truth! These questions are just examples for guidance and are not mandatory. Use your own judgment to decide questions—these or your own—that are appropriate for your specific situation.

  • What are your company’s sales goals?
  • What is your company’s #1 selling priority?
  • How is your sales performance measured?
  • What are the benefits of reaching your sales goal?
  • What are the consequences if you don’t reach your sales target?
  • If we discuss some conditions, who decides if they are acceptable to your organization?
  • How do the details of our conversations reach the decision maker?
  • How likely is it that we can bring the decision maker into the discussion if we come across an opportunity that you may not agree to?
  • Are there important dates related to changes in your production capacity?
  • How often do you have to report your sales figures internally?
  • Is there a specific date by which you would like this deal to be closed? Why?
Negotiation article and permission to publish here provided by Nikita S. at nextlevelpurchasing.com. Originally published on Supply Chain Game Changer on November 15, 2018.

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