Negotiations is a trial-and-error process with no promise of positive results– because the person on the other side of the table is trying to gain more than they’re giving away, too.

Starting with prehistoric people haggling over trading valuable stones for another tribe’s meat, we’ve been striving to sharpen our bargaining skills to reap the best advantage in negotiations with others.

That’s why it helps to have rules they can rely upon and fall back on while haggling with vendors. While you might not always “win” in the give and take of bargaining with vendors, the key is avoiding losses as much as possible. If you come away with what you need without selling the farm, you’ve accomplished your purpose.

To that end, here’s a helpful short list of Commandments of Vendor Negotiations:

1. Be prepared: There’s a reason Boy Scouts make that their motto. In negotiations, better informed generally means better armed. Have an idea of what the competition is offering and set your own bottom-line goals for agreement or for walking away.
2. Liar, liar, pants on fire. You’re not at the poker table, so don’t try bluffing. Being honest is important; it doesn’t mean you should fully tip your hand, though.
3. A history lesson. Help the vendor develop a little deeper appreciation of the history and goals of your company. That’s one of the reasons you’re talking — you see that vendor as someone who’s going to be able to help your company reach those goals.
4. Who you know. It’s OK to at least mention the competition — it shows you’ve been doing your homework. But giving too many specifics — their offer or terms, for example — could end up weakening your position.
5. Extra value. Don’t get too far along in your negotiations without talking about the incentives the vendor can offer you. This should be part of the process when hashing out price, haggling over payment terms, delivery schedules, etc.

Tags: bargaining, negotiation, vendor