Management November 13, 2013 Last updated September 18th, 2018 723 Reads share

Negotiation Tips & Purchasing Power For Managers

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Only the largest of corporate businesses and government bodies will have specialist procurement departments, leaving many leaders and managers responsible for purchases of goods and services for their own departments. This puts them into direct contact with sales people who are often highly trained to maximise revenue and profits for their businesses.

This short article is designed to equip inexperienced managers with some hints and tips for handling the negotiation phase when purchasing high value goods and services. As a trainer that works with general management as well as specialist sales people I can see things from both perspectives when it comes to selling/buying negotiations.

I am not going to cover the selection process here, we all know that the best supplier is rarely the cheapest and we need to think about overall value and not just price. I am assuming you have selected the partner you want to work with, or at least have a shortlist of two.

Planning is important

One thing I can tell you based on experience is that sales people and buyers rarely ‘plan’ the negotiation phase of ‘selling/buying’ and as a result the process can be long winded and somewhat confrontational.

The key to a successful negotiation is like most things down to planning and as a buyer here are some ideas to ensure you can get a great deal. It is also important that the seller also feels they have had a great deal too. This is known as a ‘win/win’ negotiation.

  • Think about things that you might* be able to offer the seller in return for discount, these might include:
    • An exclusive contract for the goods/services they provide and/or a guarantee of future business
    • You list them as a supplier/partner on your web site
    • A larger order
    • A regular order
    • Pre-payment
    • A testimonial or case study for them to use in their marketing
    • A referral to another potential client within your organisation or other people/organisations you may know

*You may not have the authority to agree some of these.

Consider the discount

Obviously the size of the additional ‘carrot’ that you can offer will alter the discount level you can expect. Therefore you need to think about all of the options in advance and be able to communicate the value of each to the salesperson during the negotiation.

Also be aware that the selling organisation may agree to a discount based on a guarantee of future business or exclusive contract, but only if you are prepared to sign a formal contract with them.

Case studies

One of the most effective things you can offer is to be a case study as these have real value to the selling organisation but it will cost you nothing apart from a little time. It won’t cost them much either BUT could get you an additional discount on your purchase.

My advice when starting a negotiation is just to ask for a discount without mentioning the above and use these to secure additional movement on price.

Give it a go and be sure to let me know how you get on and how much money you save!

Images:  ”Hand drawing Win Win Puzzle Concept with black marker on transparent wipe board   /Shutterstock.com

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Sean McPheat

Sean McPheat

Sean McPheat is a bestselling author and MD of international training firm MTD Sales Training, who have delivered training, coaching and consultancy to over 2,500 different organisations and over 50,000 staff from 23 different countries. Sean is regarded as a thought leader on modern day selling, management skills and business improvement, and has been featured on CNN, ITV, BBC, SKY, Forbes, Arena Magazine with over 250 other media credits to his name. Having built MTD Training from a bank balance of zero he’s living proof that with hard work and the right strategy, that anything is possible!

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