when negotiating on the buy side, 2 key steps to improve the balance of power

Supply Managers agree the single source negotiation often results in the Supply Manager feeling less than powerful, and/or an opportunity focused Supplier makes them feel like they have been taken advantage of.  One-sided negotiations seemingly expedite even the best Supply Managers to thinking they are in a very difficult to win situation.  Indeed this very line of thought creates a very powerful fear, and one of the most persistent myths in negotiations, the assumption of a fixed pie negotiation.

To overcome this myth, and craft a more powerful single source position, a Supply Manager needs to step back and implement two key steps which improve the balance of power, and expand opportunities for both the negotiation and the relationship.

Begin to breakdown a perceived one-sided negotiation by diagnosing the strategy and interests of the Supplier.  This begins by asking two questions:

- What are the consequences to this Supplier if they do not reach agreement with me?

- What are the short and long term, hard and soft, costs and benefits to the Supplier if they do not reach agreement with me?

Supply Managers who take the time to estimate their Suppler's alternatives in the front end of a sole source negotiation may find themselves in a much more powerful position.  They can proactively and diplomatically use their knowledge of the Suppler to more equally balance the power in the negotiation.

Next, the Supply Manager must probe more deeply to understand what makes their organization a great customer for this Supplier.  In other words: "What does the Supplier value greatly in this relationship?"

It is in the best interest of the Supply Manager to focus on the needs of the Supplier.  The truth is that it is much more difficult for any Supplier to lose you as a customer, if you are one of their best customers.

If this topic is intriguing to you, please request our article on "Increasing Your Power in a Single Source Negotiation."