Successful Negotiation with Your Suppliers

The word “Negotiation” is very important for all businesses. Whether you’re in an interview and negotiating for a higher salary, a marketer who is trying to make a deal, a salesman who is delivering his pitch and negotiating the details with the client, or even in your daily life when you negotiate for something you want. But it is the most important in the field of supply chain. So what does the word “Negotiation” mean?

Negotiation is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute. Thomas Edison once said, “A genius is just a talented person who does his homework.” Many negotiation experts have rightly observed that 75 percent of the total time spent in the negotiation process should be spent in preparation activities, which should ideally include important tasks such as the solicitation and evaluation of supplier proposals, the development of a negotiation strategy, and the endorsement of the senior management team.

In the supply chain environment, negotiating often involves the cost of an item, arrival time, and quality standards. When everyone works to leave the bargaining table happy, the affected parties have more positive attitudes and contractual obligations are more likely to be followed. When negotiating with suppliers, more is at stake than just price. Knowing the other variables in a deal and prioritizing them makes negotiating easier. Other items to consider are:

• Delivery time/schedule/frequency
• Payment terms
• Warranties, merchandise return policy
• Ease of Reordering

Here are the some ways for preparing winning negotiations with your key suppliers:

1. Familiarize your team with the supplier’s company
2. Discover the supplier’s agenda
3. Profile the supplier’s negotiating team Personnel
4. Review the supplier’s performance history
5. Select and prepare your negotiation team
6. Rehearse Non-Verbal signals