Front Door Entrances

 Motoring

Consumer Help

Travel

About us

Home

Use the keys below to open the other RED DOOR Pages

The KEYto be a Buyer not a Shopper

Cut Mobile Phone costs

The KEY to the Buying Process

The KEY to Buyers Jargon

Switching Energy Suppliers

The Key to Cut Energy Costs

The Key to cut WATER bills

Return to Home page

MORE PAGES TO
HELP YOUR
HAGGLING
TECHNIQUES

Buyer or Shopper?

Buying Process

Buying Jargon

Buyer Training

GET DETAILS

NEGOTIATING STYLE
It is best to stick the negotiating and haggle / bargaining style that you are comfortable with, but be prepared to modify it according to circumstances if you ar not obtaining the result that you are after. For instance some people will prefer to be 'Mr nice guy' whereas others will adopt an aggressive negotiating stance. Any style will work for part but not all of the time, depending to how the other party reacts. Professional buyers are therefore trained to to behave like chameleons to put on any style that will advance their case. Negotiation can therefore be described as an acting game with the best actors winning the Oscars.

RESULTS
Clear negotiation objectives are vital, never forget that by buying your big ticket items like a professional you are aiming to give yourself a 10% annual pay rise. Clarify your objectives with a list of the points to be covered to ensure that you can check that all your negotiating objectives have been achieved.

CONFIDENCE
There is seldom any need to pay the full asking price for any major purchase. Competition between suppliers is usually intense therefore they need your business, you have the power to haggle and bargain, you can and must put yourself in the driving seat.

KEY NEGOTIATING POINTS - PREPARATION
+ You can never do too much research & preparation. Indeed professionals know that there is s direct correlation between their amount of preparation and success in the negotiation. You need to -
a/ Prepare accurate written specifications for the product or service you are seeking, covering all aspects of quality and service..
b/ Identify the best suppliers for the product or service you are seeking.
c/ Get some market place knowledge - who are the leading players, the availability of raw materials, normal lead times etc.
d/ There are a range of sources available for this research, for example professionals would issue a RFI ( Request for information) to potential suppliers or there is the Internet, trade directories eg Kompas, on the web or at a public library, trade magazines, business exhibitions. Canvas the experience of friends - but only if you can trust their objectivity! Try to cut out the middle man, find out if you can buy direct from the manufacturer, importer or wholesaler.
e/ Think about a cost analysis (price breakdown) into say labour, raw material, transport costs etc. During the negotiations asking subtle questions that may give you more information. Don't just think about the basic price - how about lifetime costs, maintenance, spare parts etc?
f/ Analyse the personalities of the people you are dealing with so that you can modify your negotiating style accordingly.
g/ What are their strengths and weaknesses both business and personality wise?
g/ What are your strengths and weaknesses?
+ Get three or more quotations, ideally in writing, using the specifications you have already prepared. Never reveal your budget to a supplier or surprise, surprise the quotation will invariably come in just under your budget! Professionals will use a spreadsheet to objectively measure the strengths and weaknesses of each quote. If there is a long lead time and stage payments are involved make sure the supplier is financially sound and not about to go bust. Always be concerned about, and do everything to avoid, up-front payments.
+ Specialist websites can be useful for finding bargains. For instance we are all fed up with the price of petrol but there is a website that tells you the cheapest petrol & diesel prices you can find locally when you put in your postcode, try Petrolprices.com

CONDUCTING A NEGOTIATION
+ As Isaac Asimov once famously said "Everything is negotiable" so when buying it is not merely about price it is also about negotiating favourable quality and service as well.
+ Start the meeting with pleasantries and something non-confrontational maybe agree the technical aspects first.
+ Follow your own negotiating style but be prepared to modify it and haggle as you go along. Most people prefer to be pleasant but firm rather than adopting a "table thumping" aggressive bargaining approach. Remember there are five possible approaches which can be used when negotiating to persuade people to move from their stated position - logic, emotion, threat, bargain or compromise.
+ When negotiating (haggling) have three prices in your head a/ the most you are prepared to pay. b/ an average price which is acceptable. c/ a price which you will be over the moon about if you can achieve. Obviously challenge yourself to achieve price 'c'. However if you cannot achieve price 'a' walk away to reconsider and live to fight another day. Never get hooked on one supplier, there is always another just as good.
+ The Supplier always has a certain advantage because they know the cost breakdown for their product or service - you do not. They therefore know the profit margins and how much they can concede before it becomes not worth their while. However by doing some research and subtly asking questions as you go along such as "how long will it take for you to do the job then and I suppose that the raw materials cost amount to around 55% of the job?" you will gradually get some idea. Without this knowledge you can only say things like I can get it cheaper somewhere else. Far better to be able to say "your raw material cost by comparison seem a bit high, can't you screw your supplier down a bit more". This type of of questioning gives your opponent an opportunity to make a concession without losing face.
+ When a seller tells you the price ALWAYS express surprise that it is so high. Then be quiet. Quite often when attempting to justify the price the seller will throw in a few concessions or extras without you really trying. This technique is called the "That's a lot of money?" approach.
+ Throw in a bit of jargon to give the impression that you know a bit of what you are talking about. See our buyers jargon page to help impress.
+Never be the first to name the price you are prepared to pay. Sellers will always try hard to make you do it first because they can then work up from there. On the other hand you will do better to work down from theirs.
+ Be cheeky, do not be embarrassed - that is being subjective.
+Never make a concession unless you obtain something in return. e.g. "I will agree to ............as long as you will agree to..............."
+ It helps if you can read other people's and modify your own body language. This is a very important but wide encompassing subject and we intend to produce a page on the subject in the Autumn. In the meantime a useful book with a chapter on the subject is Purchasing Performance.
+ There is sometimes strength in numbers. Professionals will use the good cop/bad cop routine to unsettle the opposition. One will be an aggressive and rude " Mr Nasty" whereas the other will act the part of a sweetly reasonable "Mr Nice".
+ When you wrap up the meeting, sum up the points you have agreed and make sure they are confirmed in writing.
+ Location and timing is important. Professionals will think carefully about it, even down to the arranging of the chairs or making sure the sun is in the supplier's eyes. They will even pull tricks like insisting on a late Friday afternoon meeting, knowing full well that the supplier has a few hundred miles to go home and will therefore be more likely to make concessions in order to wrap up the meeting to catch a train or plane home in time for the weekend. Chose a time or location where you feel comfortable and not likely to be intimidated. Resist however buying products in your own home, the hard sell sales people used in this type of selling are usually so skilled that "you will be taken to the cleaners!". NEVER buy on the night, ALWAYS insist on taking a few days before you make up your mind; no matter how attractive the "sign up on the night" offer appears. If you insist you will still obtain the same discount a few days later.
+ By following these key points, giving it some thought and a lot of planning anyone can negotiate themselves a bargain and it's fun.
© Derek Roylance - www.buyingskills.com ©
HAGGLING & BARGAINING IS ENJOYABLE & PROFITABLE SO GOOD LUCK.

FOR CAREER BUYERS - If you work in buying you already know that you can never know too much about negotiation. My book wil supply with a few new angles to help you further your career in procurement, but don't take my word for it go to Google books - Purchasing Performance. to read some sample pages
Buying Skills can also provide excellent procurement training for Managers and Buyers including of course the art of negotiation. Interested? then go to our purchasing training page.

PURCHASING PERFORMANCE MEASURING, MARKETING & SELLING THE PURCHASING FUNCTION A Book by Derek Roylance, MCIPS, MIP3. Published by Gower Press
For more information or to purchase click on either book cover	Amazon	or the Publisher

You can also buy the book from CIPS (The Chartered Institute of Purchasing & Supply).So shop around to get yourself the best deal.

Reviews
'The practical advice provided throughout this book is presented in a no-frills, snappy style that ensures the essential information is not lost in a clutter of unnecessary detail. ...This is an excellent volume that in every sense is a handbook for procurement specialists and beginners alike.' Economic Outlook and Business Review'

'An ideal guide for any buyer that aspires to be a procurement manager. It goes beyond the mere process manual and explains purchasing’s role at the heart of a successful organisation. I particularly approve of the way that Roylance stressed the need for purchasing to act as an example of good practice in business ethics. It distills a lifetime of experience in purchasing into an easily digestible read full of wisdom.'
Trevor Kitching, Director, ACS Supply Chain Consultancy Ltd

'Written in Roylance's humorously dictatorial style, the book condenses a year's worth of instruction into one handy volume. It covers everything you need to know and consider when engaging your internal customers on procurement's offer to your company. ...Well done.' Supply Management (CIPS Members magazine)'.

Contents
Introduction; The management role; The profit and loss measurement system; Measuring and improving buyer performance; Measuring supplier performance; Marketing theory; Presentation and selling skills; The practical application of marketing and sales theory; Market research questionnaire - sample questions; Reverse marketing; Body language (non verbal communication); Technology comes to our aid; Ethics; Conclusions; Appendices; Index.

Useful reference links for purchasing professionals

Return to Home page