Negotiation in B2B procurement is one of the most important pillars for businesses. That’s because $1 saved means $1 in profit for the company.
In other words, having knowledge on the top negotiation strategies is key to win the best deals and impact results in a positive way.
Whether to renew contracts with suppliers or to establish new partnerships, knowing how to negotiate and see beyond price can be the great distinguishing point in a competitive market.
Currently, businesses haven’t only the goal of achieving savings, as they now understand that strengthening the relationship with their suppliers generates gains for both sides.
See below the key points to be considered when it comes to negotiation in procurement.
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Know the 7 negotiation strategies to apply in your procurement management routine
1. Make your plans before any negotiation
Procurement planning is a key factor to increase the chances of winning the best deals.
The buyer must be fully provided with all information, before starting the quotation and supplier selection process, such as item details, delivery time, budget limits and payment methods.
2. See beyond savings
In spite of the priority of achieving savings and increasing profit, negotiation with suppliers must take into account other aspects, in order to benefit the partnership.
3. Take advantage of seasonality
To get the best deals, consider seasonality in procurement planning, and try to negotiate with suppliers in the period when they usually have lower sales volume, for instance.
Another tip consists in following price evolution. This KPI is an indicator that helps you better plan future purchases, and even anticipate them – which can offer savings and expense control.
4. Invest in relationships with suppliers
Having an empathetic look at negotiation time and considering that both buyers and suppliers must be benefitted, brings not only financial gains, but also advantages for the relationship.
One way to build a buyer-supplier relationship consists in reducing operational costs and developing product and process innovations.
5. Use a good communication
Negotiation in procurement is all about communication. The art of communicating with accuracy and security is vital to have persuasion and get the best partnerships.
In this sense, for an effective communication, listening is also significant. Insights and new strategies can emerge for your business by listening to your suppliers.
6. Create humanized partnerships
The more humanized the partnership, the more chances of success. In fact, the rule that commercial relations must be strictly formal is no longer valid.
The B2C market, for instance, now understands that relationships must be more and more human, in order to engage customers and arouse a feeling of trust.
7. Streamline the process
In the corporate world, the excess of bureaucracy makes business relationships more difficult. Look for ways to make the negotiation stage easier, such as the use of digital tools.
The e-Procurement platform allows you to perform several analyses and automate the negotiation process, which can provide more assertive decisions and more savings.
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