How Do You Respond When Your Supplier Says No?
One of the strongest negotiation techniques your supplier can
use is to simply say "no." Your ability to distinguish a real
"no" from a "no" used as a negotiation technique is vitally
important. These tips will help you move past the first few
no's and negotiate a better deal.
Shift Focus - Try to shift focus onto another item of value if
you're at an impasse on a particular negotiation point.
Negotiate a longer warranty period. Ask for some free products
or accessories. Gain agreement on firm pricing for a longer
period of time, a downward price protection clause, better
lead-times, or seek greater discounts on related (or unrelated)
goods or services.
Do The Math - Set emotions aside and walk your supplier through
the business problem you both face. Develop a "should cost"
model to determine if there is room for additional cost
compression. Benchmark the offer you've received against
published industry data from consultants, trade organizations,
etc. Offer to analyze and help reduce supplier's upstream costs.
Paint A Picture - Sometimes suppliers need help understanding
the implications of not reaching agreement. Explain the
importance of your business to their bottom line. Describe
what their business might look like 2 or 3 years out if they
lose this deal or if the relationship is damaged. Ask how this
future state would affect their personal performance review,
career or compensation.
Change Players - Insisting on the involvement of a higher-level
supplier representative in the negotiation might seem
elementary, but many negotiators mess this one up. The trick
is to find the highest level executive who would experience the
greatest pain at the loss of your business. Aim too high and
your pleas may not be treated as high priorities. Done
correctly, your contact will help you fight within the
supplier's organization.
One of the strongest negotiation techniques your supplier can
use is to simply say "no." Your ability to distinguish a real
"no" from a "no" used as a negotiation technique is vitally
important. These tips will help you move past the first few
no's and negotiate a better deal.
Shift Focus - Try to shift focus onto another item of value if
you're at an impasse on a particular negotiation point.
Negotiate a longer warranty period. Ask for some free products
or accessories. Gain agreement on firm pricing for a longer
period of time, a downward price protection clause, better
lead-times, or seek greater discounts on related (or unrelated)
goods or services.
Do The Math - Set emotions aside and walk your supplier through
the business problem you both face. Develop a "should cost"
model to determine if there is room for additional cost
compression. Benchmark the offer you've received against
published industry data from consultants, trade organizations,
etc. Offer to analyze and help reduce supplier's upstream costs.
Paint A Picture - Sometimes suppliers need help understanding
the implications of not reaching agreement. Explain the
importance of your business to their bottom line. Describe
what their business might look like 2 or 3 years out if they
lose this deal or if the relationship is damaged. Ask how this
future state would affect their personal performance review,
career or compensation.
Change Players - Insisting on the involvement of a higher-level
supplier representative in the negotiation might seem
elementary, but many negotiators mess this one up. The trick
is to find the highest level executive who would experience the
greatest pain at the loss of your business. Aim too high and
your pleas may not be treated as high priorities. Done
correctly, your contact will help you fight within the
supplier's organization.
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