I’d like to dedicate this post to further dissecting yesterday’s article “Tips For Negotiating With A Sole Source.”
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In the first tip, I emphasized how time can motivate suppliers – even sole source suppliers – to concede a little bit in order to close a deal quickly. In procurement, it is easy to feel that time is always your enemy and the supplier’s friend. After all, your internal customers are always pushing you to get things done quickly and can’t understand why their part is done and you are “holding things up” by negotiating and getting the contract written.
But the fact of the matter is that suppliers feel the pinch of time as well. They have sales goals, usually by month, by quarter, or by year, and sometimes all three. That fact makes this time of year a particularly good time for procurement professionals who are negotiating!
Sales goals prepared early in this year may have been based on overly optimistic predictions about the economy. And, let’s face it, it hasn’t exactly been a stellar economic year.
That means that a lot of sales teams are probably coming up short on their goals. That probably means less commissions for everyone from the sales rep to the VP of sales. Bonuses are probably a long shot as well.
Closing a deal before the end of the year would certainly help their cause. But, in this economy, closing a deal in 30 days seems like a nostalgic concept.
Unless, of course, smart procurement professionals use that to their advantage. By committing to give an order by the end of the year if you can get concessions on a few terms, you hold a powerful lever.
When it comes to negotiation, procurement professionals don’t always have time on their side. But this time of year, you do. Will you use it to your advantage?
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