How Suppliers View the Procurement Negotiation Process

In our previous edition of the Procurement Leaders Playbook, we discussed 3 Factors to Procurement Success. 

This week, we’re diving into something different—how Suppliers View the Procurement Negotiation Process. 

In our recent poll, 14% of the respondents viewed contract negotiations as the area where procurement professionals need most improvement in. 

Ever wondered what these negotiations look like from the supplier's point of view? Let’s break it down and see what they experience during these crucial talks.

First Impressions Matter

Just like in any relationship, the first impression in procurement negotiations is crucial. When a supplier meets a potential buyer, they’re looking for professionalism, clarity, and respect. 

Imagine you’re meeting someone for the first time. If they’re courteous and well-prepared, you’re likely to have a positive impression. 

The same goes for suppliers. They appreciate when you come prepared with clear requirements and an understanding of the market. It shows that you are serious and ready to do business.

The Importance of Clear Communication

Suppliers value clear and honest communication. They need to understand exactly what you want, including specifications, timelines, and budget. When you communicate clearly, it reduces misunderstandings and builds trust.

Think about it this way—if you’re working on a school project and your partner gives you clear instructions, it’s much easier to get the job done right. 

In procurement, clear communication ensures that both parties are on the same page, making the process smoother and more efficient.

Is it a Mutually Beneficial Relationship?

Negotiations are not just about getting the best price. Suppliers are also looking for long-term relationships that are beneficial for both parties. They want to know that you value their work and are willing to collaborate for mutual success.

Consider it like having a good friend. You help each other out and make sure both sides are happy. 

In business, suppliers appreciate buyers who are fair and willing to work together to find solutions that benefit both sides. This kind of partnership leads to better deals and more successful projects.

Always Understand Supplier’s Costs

A big part of the negotiation process is understanding the supplier’s costs. Suppliers have their own expenses, including materials, labor, and overhead. They need to cover these costs and make a profit to stay in business.

When you understand and respect this, negotiations become more productive. Instead of pushing for the lowest possible price, you can work together to find a fair price that works for both parties. 

Build Your Influence By Getting Certified!

Some say procurement negotiations are all about influence. Well, do you know how you can build your influence? By getting certified.

If you’re interested in expertly handling procurement negotiations as a certified procurement professional, check out our upcoming CIPM session here. 

Led by Dr. Graw, with over 20-years of experience in supply chain, this is one of the most leading procurement certifications in the industry. 

This session not only covers procurement strategy development, but also dives into economic, social, and technological factors that are shaping global supply chains.

Hurry Up: The upcoming CIPP session starts on 22nd June and only has a limited number of seats up for grabs now. Register Your Interest Here! 

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For more details call us at +1-3112-300-8968 or email artin@procurementcenter.or