Negotiation:- Make or Brake the business:
Deals and wheels
I have been absent for a while from blogging , I have been joining the other 8% of the population in the UK who are looking for there next job. I did see a post on negotiating deals and it struck a cord with me, I remembered how it was always hard to get the techie guys to negotiate prices with suppliers they just accepted the deal and cost the company. I am not saying that everyone should negotiate the cost, but it is a good habit to get everyone to participate in who is dealing with a supplier or customer, build the culture.
I used to ask the Tech guys did they always take first offer when buying a car? it is a life skill that will stand you and your company in good stead for the future. I have negotiated with the 800lb gorillas, www.tsmc.com , www.umc.com , www.smics.com ,www.appliedmaterials.com LDK, REC to name a few, and following the golden rules of strategic supplier negotiating I have managed to get better service and pricing, a lower price may not be the best way forward, but better terms, free design help, failure analysis to mention a few all can be bundled as a better deal.
These are the few gems I picked from the post by Martin Gaston on BNET
( http://blogs.bnet.co.uk/sterling-performance/2010/05/04/a-bluffer%E2%80%99s-guide-to-negotiating/)
1. Tell it like it is
If you’re sending mixed messages to your supplier, they won’t know you’re unhappy. Be clear about what you can afford and what you expect. If you think a quote is too high, say so. Don’t be afraid to be honest.
If you’re unprepared to buy at a certain price then tell them you’re not interested and then return to the negotating table to work out a better deal.
2. Do your homework
If you’ve been dealing with a supplier for a long time, have you actually sat down and considered the costs of switching to another business? Are there hidden costs to switching that your supplier’s all too aware of — or could you do better with another business. Knowledge can be powerful — and may be all you need to get a deal re-evaluated.
If you’re looking to renegotiate a contract, do your homework and demonstrate you’re already aware of the what’s on offer in your market and of the alternatives available. If you can demonstrate where your supplier is falling down on service, they’ll be forced to do better or risk losing your business.
3. Be realistic
It’s natural to want to want as much for as little as possible, but it’s also worth thinking about whether or not your demands are realistic. The economic climate might require that you cut costs, but it’s also important carefully to maintain service levels.
If you go into a negotiation with an unreasonable set of demands, suppliers may see your business as more trouble than it’s worth. What is essential? What can you live without? Answer these questions before you speak to your supplier, or you may feel railroaded.
4. It’s about compromise
You might be tempted to walk away from an unfair quote, but instead of closing down the negotiations entirely, think about what you’d be prepared to compromise to hit your financial targets.
It might sound obvious, but negotiations are about essentially about give and take — if you’re unprepared to give anything up, you and your supplier lose out.
5. Say what you mean
… and mean what you say. There’s no point in threatening to ditch a software provider to go open-source if you have absolutely no intention of doing it, for example — it’ll just make you look silly in the eyes of your current suppliers.
Be honest, upfront and consistent with your message then you’ll find yourself cultivating better results and working relationships with your essential suppliers.
Deals and wheels
I have been absent for a while from blogging , I have been joining the other 8% of the population in the UK who are looking for there next job. I did see a post on negotiating deals and it struck a cord with me, I remembered how it was always hard to get the techie guys to negotiate prices with suppliers they just accepted the deal and cost the company. I am not saying that everyone should negotiate the cost, but it is a good habit to get everyone to participate in who is dealing with a supplier or customer, build the culture.
I used to ask the Tech guys did they always take first offer when buying a car? it is a life skill that will stand you and your company in good stead for the future. I have negotiated with the 800lb gorillas, www.tsmc.com , www.umc.com , www.smics.com ,www.appliedmaterials.com LDK, REC to name a few, and following the golden rules of strategic supplier negotiating I have managed to get better service and pricing, a lower price may not be the best way forward, but better terms, free design help, failure analysis to mention a few all can be bundled as a better deal.
These are the few gems I picked from the post by Martin Gaston on BNET
( http://blogs.bnet.co.uk/sterling-performance/2010/05/04/a-bluffer%E2%80%99s-guide-to-negotiating/)
1. Tell it like it is
If you’re sending mixed messages to your supplier, they won’t know you’re unhappy. Be clear about what you can afford and what you expect. If you think a quote is too high, say so. Don’t be afraid to be honest.
If you’re unprepared to buy at a certain price then tell them you’re not interested and then return to the negotating table to work out a better deal.
2. Do your homework
If you’ve been dealing with a supplier for a long time, have you actually sat down and considered the costs of switching to another business? Are there hidden costs to switching that your supplier’s all too aware of — or could you do better with another business. Knowledge can be powerful — and may be all you need to get a deal re-evaluated.
If you’re looking to renegotiate a contract, do your homework and demonstrate you’re already aware of the what’s on offer in your market and of the alternatives available. If you can demonstrate where your supplier is falling down on service, they’ll be forced to do better or risk losing your business.
3. Be realistic
It’s natural to want to want as much for as little as possible, but it’s also worth thinking about whether or not your demands are realistic. The economic climate might require that you cut costs, but it’s also important carefully to maintain service levels.
If you go into a negotiation with an unreasonable set of demands, suppliers may see your business as more trouble than it’s worth. What is essential? What can you live without? Answer these questions before you speak to your supplier, or you may feel railroaded.
4. It’s about compromise
You might be tempted to walk away from an unfair quote, but instead of closing down the negotiations entirely, think about what you’d be prepared to compromise to hit your financial targets.
It might sound obvious, but negotiations are about essentially about give and take — if you’re unprepared to give anything up, you and your supplier lose out.
5. Say what you mean
… and mean what you say. There’s no point in threatening to ditch a software provider to go open-source if you have absolutely no intention of doing it, for example — it’ll just make you look silly in the eyes of your current suppliers.
Be honest, upfront and consistent with your message then you’ll find yourself cultivating better results and working relationships with your essential suppliers.
I hope this helps.....
and any leads for a new job for myself will be rewarded :)
Have a good week
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