That’s an unfortunate reality of the business world. This can impact any area of a company but can be particularly devastating when it happens in procurement. For a procurement manager, accepting a bad deal at the end of a negotiation process is a nightmare that can have long-term effects.
In part, getting a good deal will depend on the procurement manager’s negotiation skills. But no matter how good of a negotiator the individual is, there is one thing which will always make their job much more difficult. That is entering the talks without having a solid negotiating position.
Solidifying your negotiating position means being crystal clear on several key factors.
For one, you need to know exactly what you want. Every supplier will try to make as much as they can. They’ll also try to sell you products which may not fit your requirements to the letter. The job of the procurement manager is to keep this in check.
You also need to be clear on what you can offer. By knowing this, you can create a realistic image of what you can expect in return. Finally, you also need to know where to draw the line. Every negotiation will have some flexibility, but there needs to be a limit to this. When you know ahead of time what point to never cross, you’ll know when walking away is the right move.
All of this you need to decide with key stakeholders in advance. Doing this will empower you for the negotiations, meaning you won’t panic. The end result is that you won’t overspend. And if you do end up agreeing on a deal, it will be a deal that benefits you.
There is a lot more your procurement department can do to give you a competitive advantage. Speak with one of our team members today.