PurchTips edition #326

As we wrote in our book, The Procurement Game Plan, Dr. Soheila Lunney and I identified the procurement negotiator’s worst enemy as the set of assumptions he or she has about negotiation circumstances. Often, your assumptions alone may prevent you from taking the negotiating actions that would produce more beneficial deals for your organization.

So, what are the things that procurement negotiators assume? Here is a sample of the assumptions that are often not true and might prevent you from achieving optimal negotiation results.

Bad Assumption #1: A certain supplier is the only one available or capable of providing a certain product or service

Bad Assumption #2: Your organization is too small to qualify for preferential pricing and terms from a certain supplier

Bad Assumption #3: The price that the supplier quoted is the lowest they are willing to offer

Bad Assumption #4: The supplier will not provide the information (e.g., its profit margin percentage) that you would like to have

Bad Assumption #5: The supplier representative with whom you are speaking has decision-making authority

Bad Assumption #6: There is no way to influence supplier pricing if market prices are rising

Bad Assumption #7: Fixed pricing is always the lowest cost, or best, option

Bad Assumption #8: The only way to compel a supplier to reduce its price is to say that you’ll simply do business with another supplier who you consider to be equivalent

You’re probably in the midst of a negotiation right now. If so, evaluate your situation to determine if you are making these assumptions. If you are, try to determine whether your assumptions are true or false before letting them negatively affect how you negotiate.