When it comes to dealing with suppliers, better results occur when procurement has a game plan. The success of Chinese exporters making millions through eBay certainly highlights the possibilities for prepared business owners.
Ensuring that lucrative deals are being made can have long-term effects on a business. A desire for success is why many companies are ensuring that their decision-makers have the requisite training in negotiating with sellers.
Cut out the Guesswork
It may come as a surprise to some, but most college business curriculums do not offer negotiation classes to students. Attending negotiation seminars can be an attractive alternative to costly trial and error.
To achieve outstanding results, skills can be acquired during procurement negotiation training. Targeted courses offer the best chance to gain the skills and tools needed to succeed in a competitive market, including communication skills, research practices, proven analytics, and the five negotiation styles.
Do We Have an Understanding?
When a seller matters to your business, maintaining clear and open lines of communication is an integral part of the process in building trust and attaining a sense of reliability. Treat important vendors as partners and return phone calls, emails, etc. promptly.
Active listening is key during negotiations, which means being responsive and attentive. Make sure you understand what is being said.
UCLA’s Dr. Albert Mehrabian concludes that when there is incongruity, 93% of communication is nonverbal. So it’s important to pay attention to body language.
Clear communication also means ensuring there are fewer delays on either end.
Get in the Game
It’s important for procurement to be trained in the supplier’s lingo, processes, and goals. This can have far-reaching implications on suceeding in a negotiation. A seller that hears you using the industry’s terminology is less likely to assume that you are clueless to the inner workings of the industry.
Figure out what it takes financially for your vendor to produce what you’re asking for. Knowing this information allows you to estimate the lowest price the vendor is willing to accept for the desired product. When possible, helping a vendor save money can also save you money in the long run.
Uncover your vendor’s goals and use these to your advantage. Helping them to meet projected goals for the year may very well be beneficial to your own goals.
Who Needs Who?
Determine early on who needs this deal more. When you need the deal more than your vendor, perfecting your ultimate poker face is useful. Let the vendor assume that whether or not this deal gets made, your company is still going to thrive.
Come to the negotiation table with multiple quotes from the seller’s competition. Use these quotes to effectively bid, presumably where you start with a lower price, and the seller starts high. The goal is to get the price you want by convincing the seller to meet you in the middle.
Understand where your company is willing to go and understand when your company is ready to walk away.
Training for Adapting and Overcoming
There are going to be topics in a negotiation that you can move on from and set terms that have little to no wiggle room. It is essential for decision-makers to clarify what is negotiable and what is concrete.
Studies can be done, and training can be taken, but a skilled procurement negotiator goes into a meeting comprehending that even the best-laid plans require adjustment as negotiations progress.
“The more we sweat in training, the less we bleed in war.” Make the mistakes in practice, not in the negotiating room.