Successful bargaining with a vendor to some means that you have to come out with the lowest price. But for many savvy Procurement pros there’s more to a good business deal than nailing the cheapest price possible.

Why’s that? Because the cheapest price often comes at a cost: product quality, strained relations with vendors, alienation from other vendors.

One way to steer clear of this situation is to take a slightly different approach to your negotiations with vendors. Think of it as a situation where you’re both trying to reach the point that is most beneficial to both of you.

This doesn’t mean it’s all chummy-chummy when you meet at the bargaining table.

Before you pull up a chair, there are several planning steps:

• clearly define exactly what it is you’re seeking
• determine if it’s a commodity or strategic purchase
• think ahead and determine how far you can “bend”
• be prepared to keep the supplier off-balance with uncertainty as to whether it’ll get your business, and
• what extra or “above-and-beyond” perks could you walk away with.

Always be thinking a couple of steps ahead, too. What you earn in saved costs could quickly be frittered away the first time there’s a glitch in your system.

Be prepared to ask yourself: The next time something goes wrong, which vendor’s going to be more willing to work with you and help, whether it’s replacement goods or stock or an expedited order? Do you think the vendor that you spent hours pounding into the bargaining table is going to go to any unusual lengths for you?

Of course not. But vendors who feel they’re working on the same team as you are much more willing to help out a teammate. 

Tags: bargaining, goods, purchase, stock, vendor