‘Are we good negotiators?’ This can be a baffling question. If it ever came up, what would our answer be? Most likely, few of us would answer ‘Yes!’ Why? To many, a person who has mastered negotiation techniques with vendors is a genius, somebody from outside our world; an extraterrestrial perhaps.
No wonder, we only hear of such terms during those rare adrenaline-raising moments, coming with closely- related terms like ‘prisoners held hostage,’ ‘release of hostages’ and ‘seasoned negotiator.’ It, therefore, seems like we require special skills to become ‘skilled negotiators’.
Achieving Successful Negotiation with Vendors
1. Seasoned negotiator
Yet, is this true? Does the art of negotiation require special skills that only ‘seasoned diplomats’ are endowed with? Think about it: We all have to negotiate every day, one way or another. It could be that we are negotiating for a deal that is necessary for our good or on behalf of others.
Depending on situations, it might even start right there at the local grocery store, when we need to purchase some daily supplies. Or we might be store owners who need to deal with vendors daily to get needed supplies. Yes, indeed, we all have to negotiate every day! As you will discover, no special skills are necessary to rival some imaginary ‘seasoned negotiator.’
Ideally, the art of negotiation should not be difficult. We only need plain common sense to hit the ground running! With just a little practice, negotiation can become a highly enjoyable experience that rakes in huge savings and brings tremendous benefits. It might be that we only lack the techniques and confidence to carry out a successful negotiation with vendors. It means we are self-limiting and need to learn a few tips.
2. No confrontation
To become an effective negotiator, there are a few fundamental principles that we can learn and apply. The results will surprise us. We don’t have to adopt any particular approach or style to succeed as negotiators. Indeed, negotiation is a process that often begins at the time we first engage with our vendor. We must do it well to get the best deal! Keep in mind that if we ever had the opportunity to interact with a vendor, this is the chance to lay a proper groundwork and negotiate for that perfect deal that leaves us with some good change in the pocket.
Must we become confrontational to succeed as negotiators? Of course, we have all heard about assertiveness and aggressiveness as a successful life- skill. Happily, to succeed, we don’t need to be super-aggressive, in the confrontational sense of the word. On the contrary, recent research shows that 99% of the time this is precisely what we must avoid getting good results in negotiating. Avoid being confrontational!
If we own a store or business and must negotiate with vendors every day, how can we use these tips to negotiate with a supplier and ensure we get the best deal? Here is what we need to do:
3. Mutual goals
As noted, the first thing to remember is that we don’t have to be confrontational or adversarial to have our way with vendors. We don’t need to do that in pursuit of the much sought-after deal. No. Instead, parties engaging in a negotiation should start from the perspective that they are mere collaborators who are seeking a mutually acceptable goal.
This means that collaboration is what should carry the day. If we have reached the negotiation point with a potential vendor, it means that both of these parties believe it is possible to reach a deal, and that both will gain some benefit at the end of the process. We should, therefore, approach the talks with a positive mindset premised on the fact that we are working together towards a common goal. If we start the negotiation with the vendors from this progressive attitude and techniques, the chances are that this process will be successful and that we will get a deal.
4. Demotivation
We must work to guarantee that the potential contract is mutually agreeable. This is crucial. For instance, is there any benefit in trying to press a potential vendor to agree to unusual terms that are also unfavorable for them? What could be the long term effects of this kind of approach? This attitude can lead to resentment and demotivation on the part of the vendor. It would be especially damaging to us if they have other clients who are more agreeable. Ultimately, we could lose out on the desired deal!
6 Powerful Negotiation Techniques to Win the Best Deals with Vendors
1. Bond
From the outset, we must be friendly to our valued vendors. Why? Studies have shown that the initial moments of the discussion are crucial. Indeed, the first five minutes of the talks can determine whether the process will succeed or fail. We must go ahead and predict matters. We should remember to start the process in a friendly way. Our goal is to establish some common ground with the vendor. We know that we won’t maintain this stance throughout, but it is the best approach in the initial stages when the process is just beginning. In most cases, it can work wonders to be friendly with our vendor.
2. Network
We must approach the ‘table’ armed with all the necessary facts. Before the negotiation, we should do some strategic background check, so we are well prepared. Indeed, we cannot afford to allow the vendor to upstage us with sudden surprises, just because we failed to carry out our homework well. We must use our networks. What kind of deals and rates did they have with the vendor? We will cleverly use this information to gain a fair advantage over our vendor.
3. Mapping
Do we know what our vendor wants? If we do, we have a better chance of winning the deal with them. We need to determine exactly what drives them in their business. Find out: Does this particular vendor target to make a quick sale so that he meets the set quota for the day? Is he, instead, targeting the profit margin? Is he price-sensitive? If we know a thing or two about this, we are well-armed. Chances are: we will win big.
4. Keep friends
Is this the kind of person that we will have to work with in the long haul? Do we have to work closely with him for the success of our business? If we answer ‘Yes’ to this, we need to start getting cordial and maintain the tempo. It matters a great deal. Is this, perhaps, a one-off vendor whom we will probably never meet again? We should go ahead and do what we must do. The key? We should know our game well, and act to keep friends whom we will need tomorrow.
5. Mixed-signal
We must learn the ‘walk-away’ trick. It can be powerful to walk away. If we show the vendor that it doesn’t matter much if the deal fails, we will suddenly become powerful! If we make it clear, through our body language, that we have a plan B, that the deal is not a life and death matter, we will shift the pressure to cut the deal on the vendor. Indeed, we can step back, away from the table, several times if need be. This can be a sufficient signal to the vendor. He will detect that we can walk away from this deal and it won’t hurt. He will be forced to think twice.
6. Trump card
From the word go, we must make it clear to the vendor that alternatives to the deal exist. Viable options. Make sure they get it right. If necessary, we will bombard them with the details. Does the competition offer a cheaper, better deal that we think the vendor is unaware of? Let them know that it is not just some idle threat. It is our job to make them believe that a genuinely decent option lies somewhere and that we can always get back to it. Make it real, sound, and convincing. It is our trump card!
Are You Ready to Negotiate Now?
Successful negotiation with a vendor does not necessarily require any special skills. To win a negotiation, we need to prepare well by mastering the techniques stated above and be alert to our needs and that of the vendors. Preparation is the key. It gives us confidence. We can anticipate what the vendor wants and be prepared for it.
Moreover, a successful negotiation is a give and take affair. If we approach talks from the best perspective, we will get positive results and achieve the desired aims at the end of the lengthy process. Remember also: We don’t have to be confrontational or unduly aggressive. We only need to cultivate a reasonable understanding of the business at hand.
Yes, we can learn these six powerful negotiation tips to benefit ourselves and the vendors. After all, we are essentially mere collaborators in a potentially mutually beneficial engagement. We must use these successful negotiation tips to get the best deal for our business and surge ahead of the competition.