The Strength of the Buyer in Negotiation: Session 6

by Bill Garcia on February 14, 2011 · 0 comments

in Business,Closing the Deal,Media,Planning4Profit

Buyers (or the customer) normally deploy two primary approaches to get a better deal from their suppliers. The first is added volume – “can I get a better price if I also buy some of these?” The idea is that the seller is motivated to increase revenue in exchange for a little less profit. It can be a good deal for the supplier and a good deal for the buyer – a true win-win.

The second approach used by buyers is to create risk and uncertainty on the part of the supplier. This lowers the expectations of the seller. The greater the seller’s perception of risk and uncertainty, the better the deal is for the buyer; at least theoretically. Buyers use a range of tactics to lower expectations such as competition, time, timing, etc. Imagine the customer says “we are going to decide which supplier gets the order by Monday”. Monday passes, and so does Tuesday and Wednesday. How is the seller feeling? Desperate, like they didn’t get the order. Then on Thursday the customer calls and says “we have been trying all week to make this work but your price needs to be a little lower”.

How do sellers defend against these buyer tactics? First, recognize that a tactic may be at play. A “tactic recognized is a tactic disarmed”. Look at the situation from all angles and wonder “what is really going on here”. When a potential buyer says “I am interested in buying your product but I don’t need it for 3 months”, ask yourself “then why is he talking to me right now?” rather than rushing in with an offer of a discount if they buy from you today. Another way to defend any tactic is to have confidence in what you are selling and the price you are quoting. It is a proven fact that greater confidence and courage in a negotiation leads to better outcomes. On the other hand, fear and desperation lead to poor outcomes. Believe in your product and service as well as the value your company provides and you will do better.

PDF: Strengths of the Buyer

This post was written by

Bill Garcia, Partner at TableForce, Inc., addresses topics such as, what negotiating means and the settings it applies to; the stages of negotiation and how to manage the overall process; various tactics and strategies to help produce a favorable negotiation outcome; what is meant by a "win-win” outcome and its importance to the overall success of your business; and how to negotiate aggressively, but fairly, in order to build and maintain positive long-term relationships that have maximum value for your business.

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