Timing is everything. Whether you’re swinging at a ball, braking in time to avoid a collision or even encouraging employees to show up on time to work, this phrase carries a lot of meaning.

With vendor negotiations, as you might have already learned, it’s also a case of timing is everything. But it’s not simply about remembering contracts or committing to delivery times. Drop the ball at any point in your contract or contract negotiations, and it could cost your company money — or worse, foul your company’s working relationship with a valuable vendor.

Supplier negotiations include three critical junctures. Here are the three, and advice for what actions to take at each one.

• Money, money, money. Patience, they say, is a virtue. It certainly is at this stage of negotiations. That’s why it pays to plan your strategy before you get to the table. Here’s what you need to know and anticipate: Don’t push hard early for a low-ball price. This tells vendors you’re going to try to squeeze them for cost cuts — and vendors will pump up that price. That makes you feel like you won the negotiation, after the vendor offers an inflated price and then “gives in”.
• Shake on it. When the deal is done, shake on it. Some people think this a good time to try to get a little extra in the deal. But most vendors will quickly see through this ploy and put you on the back burner. Treat the vendor like a partner, and show it.
• Never too soon. You know better than to wait until the last moment to start working out a contract renewal with a vendor. But here’s another idea: If terms are satisfactory to both sides, propose extending the current contract. Vendors tend to appreciate this very much, and are likely to demonstrate that.

Tags: contract, negotiation, vendors