Purchasing and Negotiation Training

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Editor’s note: This is Part II of a two part series on the basics of purchasing and sales negotiation.  Part I deals with price and Total Cost of Ownership and Part II deals with  P-Cards, sales pros, and Win-Win

What is a Procurement Card?

 The Pro Card, P Card, or Purchasing Card is essentially a credit card, usually given to line employees, for the purpose of making purchases directly, without the aid or intervention of the purchasing department.  Since the average nationwide cost of processing a P.O. ranges between $75-$125, using the card to make low volume, low dollar buys actually saves money!  What is more, the employee holding the card enjoys the empowerment of being “in charge” of his or her own turf.

Sales  also saves a corresponding amount of transaction costs, making the P-Card an attractive cost reduction solution. 

How do I handle pushy sales people or those slick talkers?

 The sales profession suffers from image problems – much as does purchasing.  The resultant lack of respect, understanding and, even hostility stems from poor communication. Sales people have always been trained to cultivate buying signal.  They master many closing techniques and keep trying them on purchasing until successful.

Purchasing pros must recognize and accept this remnant of our past, untrained behavior.  Sales people must be aggressive, constantly promoting, closing, selling. Would we want a careless, unconcerned, unmotivated slug to be our salesperson?  No, we want the aptitude, which often accompanies an attitude.  Handling sales reps requires recognition of their motivations and redirecting the sales energy toward a win-win solution.

What do you mean by “Win-Win”?  Mustn’t there always be a winner and a loser?

Only in the World Series and Super Bowl.  In fact, in any contest or conflict where both parties want the same thing, a winner and loser can be the only outcome.

In the buy-sell context, both parties never want the same thing.  The buyer may want higher quality at a lower price while the seller may want a market presence and a stable book of business.  This divergence of motivations introduces abundant opportunities for each side to get what they want while delivering what the other side wants.  The win-win approach leads to long-term, mutually beneficial buy-sell relationships when each party satisfies its own needs and helps the other side to satisfy its needs. 

Example: A superior supplier may have good quality and service, but its (Delivery) lead time and price may exceed its competitors.  The buyer may grant a small concession on delivery time (a minor sacrifice) in return for a price cut by the seller (perhaps also a minor concession).  Both parties achieve victory by meeting their goals while simultaneously helping/allowing the other side to do the same.