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Supplier Negotiation Strategies, Part 3 – Supplier Time Pressures

Purchasing Training - Supplier Negotiation
Negotiation Shenanigans

We are doing a blog series here focused on supplier negotiation strategies.

This is an appetizer for the kind of “main courses” I teach in my online and face to face training solutions.

We are learning counter-intelligence about how sales people prepare for negotiations and what tactics they use.

Guess what happens when you know their tactics? You can anticipate and diffuse them.

The next one in this series is “Supplier Time Pressures”. Suppliers know that purchasing professionals are overwhelmed. You know it too.

In speaking to thousands of purchasing professionals in 15 different countries, I’ve yet to meet the purchasing professional who has time to spare.

So let’s start with that premise, because your suppliers start with that premise too.

Suppliers will look for opportunities to put you in a time pinch. This happens most famously when negotiations are held at their facility, which we covered last week.

Suppliers will look for an opportunity to paint you in a corner. It can be something like this:

“Welcome to Singapore! Now let’s negotiate.” This tactic attempts to force a negotiation when you actually need more time and are in no mood to negotiate.

Another one is where you schedule several days to negotiate with a supplier, at the supplier’s facility, because you want to see their operations (or because they convinced you).

The supplier then fills the agenda each day with other activities. These activities can be business or non-business related. They might give you a grand tour of the city and sights, take you to fine restaurants, and treat you like a celebrity.

It’s a great ride, but it doesn’t come with a happy ending. Suddenly, you find that you have two hours left to agree on a deal. That’s exactly how they want it.

Are you really going to go back to work and tell your boss you couldn’t get anything done in three days? I think not. And the supplier knows that.

Something I’ve seen Chinese suppliers do is to make a celebratory public announcement regarding a deal having been culminated between the two of you before you’ve ever started negotiating.

On top of that, they have a big event prepared to celebrate that they’ve put together just for you. What are you going to do, show up at this celebration event and inform everyone that there actually isn’t a deal done?

That’s like showing up to a massive birthday bash scheduled just for you and telling everyone your birthday isn’t for another 8 months. Awkward.

Or suppliers will try to impose their own timelines on getting a deal done, and pretend like they are the ones who have the power of choice.

Guess what, suppliers don’t have power of choice. It is a privilege to do business with your firm. Don’t ever forget it, and don’t let your suppliers ever forget it either.

You need to turn the tables. Tell the supplier you are not going to rush to make a deal, that you have timelines, but you are willing to push them if you are not getting the kind of TCO deal you are looking for.

Then you need to ask the supplier when their fiscal cycle ends and if there are any target dates they want to hit internally for financial or incentive reasons.

And believe me, those are real, hard dates that every sales professional worth his or her salt has committed to memory. Their financial livelihood depends on it!

This is when you start to turn the tables.

Hold firm on your positions and trade TCO concessions on the supplier’s part in return for you allowing them to book revenue by their target dates. It works, and it creates a win/win deal. Both parties get what they wanted.

Always be in control, always exude confidence, and never let the power of money shift to the supplier’s hands. YOU are the one with the money. THEY are the ones who want it, and YOU have the power of choice.

Do you want to learn more of these powerful and eye-opening secrets and put them to work for you?

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Want to know one secret clause that isn’t in your contracts now that will save you 75% time in your negotiations, and how to include it?

Want to learn how you can virtually eliminate redlining?

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These are YOUR negotiations, be in charge!

All the heartache and headache that comes with negotiating contracts is preventable.

Don’t fall victim to supplier shenanigans! Use these strategies to take complete control of supplier negotiations.

Next week, we will talk about “Value Based Pricing” as a supplier negotiation strategy.

There is no better place to be than in this profession. Be your best!

Omid G