9 tips for negotiating strategic purchases. Tarragona Consultoria arrizabalagauriarte
Scenarios in which we can find few tools to achieve the most competitive for our company and in the event that a supplier has managed to eliminate its competitors thanks to lower costs or development of cutting edge technology, which may seem agreement a business has no choice but to accept the price of that provider is. Or when, due to rapid growth, demand outstrips supply and prices set new suppliers.
But this must not be. Regardless of market power of the company in relation to its suppliers, you need to approach negotiations with suppliers strategically, as you would with any other negotiation, to make it firmly enough to get in any scenario, Best offer.
# 1 Information is power trading
We must be up to date on products, processes, costs and supplier market. Our argument will carry more weight if we understand and know the processes demonstrate that a vendor and its operating environment. You can learn a lot of industry jargon and products available talking to vendors and to describe the experience of individual suppliers. This information will be valuable for our strategic purchases, making use of it during the negotiations, particularly a supplier on the assessment of the concessions provider might consider.
# 2 converts any negotiations on a strategic partnership
Before entering into negotiations with a supplier, consider how you can add value to the supplier in other aspects of your business. For example, you can offer a business opportunity, committing yourself to use the supplier’s products in a new market, in exchange for a concession in price. Or negotiate a lower price in exchange for a multiyear deal that will reduce uncertainty in the price.
Acting so, the provider will see you more as a partner managing to convert a commercial transaction in a strategic partnership
# 3 Change the pattern of your demand
You can check your purchasing policy to focus it on the consolidation of purchase orders. For example, instead of individual purchase orders to a supplier, make the necessary requirements can be combined in a consolidated purchase order, whose size can be large enough to get a discount on the price.
Also, you can contemplate the creation of a consortium of strategic acquisitions with other companies and place orders to suppliers more concentrated, rather than many number. Also your company can change a material requirement by one of the lowest cost.
# 4 Great deposits for purchase orders
Usually the accounts are charged to “many” days affecting the cash flow of companies, which is interesting given the option of agreeing a large cash deposit in order to ensure significant undescuento in the product. For example, negotiated an initial payment of 50% we could do to earn a discount of 10%, improved delivery conditions or product customization.
No. 5 Generate more substantial orders
If we concentrate all of our business to one or a few suppliers rather than many, we can negotiate deeper discounts and other benefits or value-added services. However, in this case, there quetener into account the risks to which we expose ourselves.
# 6 Do not be a problem, a solution
The profit margin of a provider is subject to the production of their customers, deliveries or quality problems. So, to get a better deal need to be more reasonable to make our orders.
No. 7 Implement a bidding process
The best way to ensure the most competitive prices is to use a bidding process for the request for proposals from multiple vendors. For this reason, we must make it clear that the selection of suppliers for the purchase will be based on her, not the lowest most competitive offer.
No. 8 consider all aspects of your strategic purchases
Many times the prices of suppliers can not be negotiable or already tight, but we can not forget other aspects of a purchase we can provide value: formula down payment, volume discounts or shipping rates. For example, it is possible to negotiate an improved product warranty or extended payment terms which can improve our cash flow.
No. 9 Cancel the relationship with the supplier
As a last resort, we can cancel existing orders and exclude the supplier of future bidding rounds. Although before we can be so drastic meet with the provider and negotiate a concession in price. In addition, previously confirm that we have a supplier who can replace him.
When negotiating with suppliers, sometimes it is difficult to envisage a way to redefine relations. Find the best option for us is a matter of thinking strategically, clearly defining the problems we want to solve, be willing to work in all functions and think analytically. With these nine tips we are sure that you can achieve all that and more.