Best Practice Preparation: How Purchasing Training Helps To Uncover The Key Factor To Unlock A Profitable Negotiation

Most negotiators completely underestimate the time required to plan for any business negotiation even though this is a critical part of business negotiation best practice.

Using your negotiation skills to analyse the context is a great place to start preparing for negotiations.

The key elements to think about are:

- What is the nature of the sale/purchase in terms of risks involved, the cost and the complexity of the transaction?

- Competitive analysis: What is the nature of the market and what options do our counterparties have available? We will deal with a sole supplier differently than those in a competitive market.

- Is it a one-off transaction or should we consider securing a long-term positive association that develops alternatives for future business?

- Have we had any dealings with our counterparty in the past and what is their most likely approach to concluding business?

- How experienced are the negotiators on the other side of the table?

- What cultures will be present and what are the local traditions?

- Who are all the groups & individuals concerned in the transaction and what is the decision making process? A diversified method is required as final decision makers will certainly be interested in Return on Investment and augmented revenues & margins. The end user who looks for better productivity and efficiency regard the financial elements almost totally irrelevant.

Almost any negotiation training course will highlight the importance of setting formal deal objectives.

Failing to prepare and rank our deal objectives we put ourselves at risk of being manipulated and/or ending with a sub-optimal conclusion. Whether you are engaged in negotiation on the sales or purchasing side, think about the following factors when preparing for negotiation:

- Price and payment terms, Key obligations, Delivery, Warranties, Intellectual property and Risks.

Price and Payments: The competition and the difficulty of most business transactions demand finding methods to create extra value and to move negotiation from haggling to synergistic and creative joint problem solving. Professional buyers are not requested with buying the most affordable solution but rather with securing their businesses with the cheapest total cost of ownership, which is made up of things like:

- Acquisition costs, Service costs, The cost of use, Training costs, Supplier performance metrics, Delivery, Product quality and Customer Support. (These concepts are covered in most purchasing training programmes).

If we are able to reduce our counterpart's costs in the entire life cycle of the product, solution or service and simultaneously offer value for money, we are in a better position to find agreement.

Key Obligations: Ensure your product and services are defined and reflect your priorities. Include all the important quantities and specifications.

Delivery: How important are the delivery timelines and what happens if the delivery doesn't take place as agreed?

Warranties: In order to preserve trust and credibility ensure that you can live with any promises.

Intellectual property: Carefully negotiate IP ownership rights and consider the following elements:

- Who is paying for the Research and Development?

- Could the research and development be used by competitors to your disadvantage if you don' t own the IP? How can you stop competitors to use the same IP?

Risks: The best way to manage exposure is to include the factors in a contract. Cultural consideration is very important. In Asian countries the goal of negotiation is not a signed contract. In China, unforeseen events are resolved through the relationship.

Analysing the above factors are crucial in preparing Concession Strategies that will help you to leverage maximum value from trades and in planning meetings optimally.

Market Crunch: Using Your Negotiation Skills To Guarantee Your Survival
In times of market instability, it is advisable to move away from price as the key negotiation factor and concentrate on 'loss framing', creating more alternatives, reciprocation and value in order to reach agreement and realise your objectives in negotiations.

Sales Training: Advantages And Disadvantages Of Coaching To Attract Customers And Boost Your Business
In the global economy of today's world that encompasses both virtual and actual opportunities, there are so many kinds and numbers of businesses for a potential customer to choose from that a business owner must use every possible advantage to generate sales

Hidden Knowledge Of Effective Selling
There are three factors that can influence a person. These three things are imagination, language, and perception systems. Combine these three factors and you will win the competition.

Include This Advice In Your Negotiation Skills Training Programs To Ensure These 3 Things Never Happen
If you are getting ready for a non-competitive negotiation, deploy some effective negotiation skills and make every effort not to make any of the most common mistakes during your dealings with your counterparts.

Apply Your Negotiation Skills In Order To Deal With Very Difficult Discussions
Difficult conversations present themselves from time to time. Perhaps you need to tell someone that their services are no longer required or perhaps you have done something for which you need to apologise.

Important Aspects To Look At When Applying Your Negotiation Skills In Cross Cultural Negotiations
We could easily make the mistake of stereotyping people according to their national culture whilst ignoring the other elements of culture that will contribute to the success in your negotiation.

Using Valuable Negotiation Skills To Help You Negotiate A Reduced Selling Price
If your business is in a position where they either need to pay less or charge more for their products or services, the easiest way to do this is to renegotiate existing client contracts. There are 3 ingredients in getting a better price.