Purchasing and Negotiation Training

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

 The American Purchasing Society has been the purchasing profession’s leader for decades.  Continuing that reputation for vanguard, I am proud and happy to announce that we have collaborated to develop the first sustainablity professional designation in purchasing.  The Certified Green Purchasing Professional (CGPP) designation will be unveiled in early 2012.  CGPP will provide the standards in education and training required to become a true sustainability professional.

The CGPP designation will involve studies of an online course and an extensive workbook and manual, Green Purchasing and Sustainability  plus a passing grade on an open book examination.  The application process also includes references, a background check, and a review off accumulated experience and credentials, including other professional designations. 

The CGPP is the equivalent of an advanced degree; accordingly, achievement of the Certified Purchasing Professional (CPP) designation is a prerequisite.  We strongly urge you to earn the CPP in order to cement your credentials and demonstrate your devotion the purchasing profession.  

Those who have already earned the CPP designation may apply for CGPP certification today.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

No matter the view on sustainability, the fact is that going green saves money.  Saving money  is the province of the purchasing profession.  Therefore, purchasing is in the best position to lead the sustainability movement in business.  Indeed, it is the cost savings harvested by purchasing in the familiar forms of energy conservation, waste reduction, recycling, land fill  space reduction, raw material preservation and all the other areas that provide the funds for mounting a sustainability program.  

None of these sustainability gains can be achieved without

1. a substantial investment in education and training of a sustainability team led by a purchasing professional
2. the execution of a well crafted Green Purchasing and Sustainability plan leading to large and verifiable sustainability gains accompanied by handsome cost savings 

Green Purchasing and Sustainability

Writing a cogent, executable, verifiable, and bona fide Green Purchasing and Sustainability plan, however, remains the most daunting challenge to the purchasing professional.  Chapter six of the Green Purchasing and Sustainability  workbook and manual is devoted to helping purchasing pros create their own plan.

 There are many organizations that prefer to outsource this expertise for reasons including time, resources, and expense.  Help with writing your plan is available in the form of consulting service.  Send me an email (address) or call 214.513.8484 and we discuss your interests.  Choose from minor assistance to a complete plan.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

 Experts in purchasing are rare indeed – an expert witness in purchasing  is close to unique.  Most practitioners in the purchasing field are far from professional.  Only a comparative few have earned any professional designations.  Because of these facts, many lawyers resort to broker agencies to find a purchasing expert. 

Whether you are a lawyer, referral source or a broker, here is profile of an expert witness in purchasing. 

Content expertise                                      Published works such as books, workbooks, online courses, CDs, MP3s and the like all indicate content expertise.  At the very least, magazine articles or interviews with industry authorities are required.  Speeches, talks, seminar and workshops to industry groups are another reliable indicator.  Peer recognition from fellow professionals is more difficult to establish but an expert witness in purchasing should be able to provide verifiable sources. 

Professional designations      Certified Purchasing Professional (CPP), Certified Professional Purchasing Consultant (CPPC), and Certified Professional Purchasing Manager (CPPM). are recognized standards of excellence.  They demonstrate dedication and devotion to the profession and differentiate the pro from the pretender. 

Education credentials            An MBA is not near as important as a CPP for the expert witness in purchasing.  Since purchasing is a process and systems oriented profession, undergraduate degrees in the sciences, business, engineering, and finance tend to favor a career in purchasing.  

Experience in the field           An expert witness in purchasing should have at least two decades in the purchasing profession in a variety of capacities such as sourcing, contract management, negotiation, supplier qualification and evaluation, foreign trade, business law, training, and consulting. 

Oral and written communication skills             Well developed oral and written communication skills are mandatory.  A history of published works and experience with spoken presentations (such as seminars, speeches, etc) is a helpful indicator here.  The expert witness in purchasing will need to compose oral and written reports.  Depending upon the facts of the case, a well crafted and imposing report with unshakeable opinions can often encourage settlement, especially if the opposing party does not want the expert witnesses report to be made public.  

consulting services

References

 A recognized and true purchasing expert should have dozens of references from coworkers, clients, and fellow purchasing pros.  These should be immediately available in the form of a web page, PDF document or even on Linkedin.  Most importantly, the expert witness in purchasing should have references from attorneys he has served.           

Knowledge of and experience with the legal process           To work well with legal professionals, the expert witness in purchasing must be familiar with discovery, depositions, and testimony.  An understanding of direct and indirect examination and the ability to hold up under legal pressures is helpful.  

Other skill sets                      

• Many law suits never reach the court house.  For those that do, an ability to testify appropriately is required.  Depending upon the scope and magnitude of the law suits, some lawyers help the witnesses with mock depositions and testimony, using video tape as an instructional tool.  Ask your lawyer about answering “hypothetical questions”, saying “I do not know”, and how to recognize other traps posed by opposing counsel.
• Always let your lawyer take the lead and never let the opposing lawyer take the lead or let him confuse you.  Answer the questions in direct testimony with short, clear, and direct responses.  Let the lawyer develop the case at his approach and pace. 
• Do not volunteer information that is not asked.  This is especially true for cross examination.  Respond to opposing counsel’s cross examination in ping pong style with short strokes. 
• The expert witness’s testimony should not self aggrandize.  Rather, the expert witness wants to come across as a personable and knowledgeable authority whose valuable opinions carry the weight of persuasion.
• Practice in Alternative Dispute Resolution (ADR), particularly arbitration as opposed to mediation, is very helpful.  My 15 years of service to the American Arbitrations Association  Panel of Arbitrators provide a thorough mastery of adversarial representation techniques.
• This web site has other helpful tips. 

For attorney’s seeking an expert witness in purchasing, call 214.513.8484 in Dallas or send me an email to RobertMenard@RobertMenard.com

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

 Some sustainability debates are downright political, some are mystifyingly technical, and some are just plain fun.  The Dallas Morning News (DMN) published a story entitled “Is the can or a bottle the greenest way to drink?”  For sustainability pros, the debate is not as whimsical as most others would think.  Yet for all of us, it is enough of an “attention getter” that it deserves at least a few minutes of our time.   

The DMN story featured all things beer scheduled for November 12-18 in downtown Dallas.  In an ironic twist, the Dallas Beer Week  was cancelled for lack of interest.  Leaving aside for the moment how that could ever have happened, the story concentrates on whether the can or the bottle is the “greener” alternative.  

The conclusion was that the can was greener

The DMN cites this reasoning.  “New glass bottles are made mostly from silica sand, an easily mined resource.  New cans come from bauxite – much of it shipped from distant shores- that is turned into aluminum in an energy-intensive and polluting process.” 

These few sentences in italics illustrate the problem with casual and uninformed observers of the sustainability landscape.  The story goes on to insist that a higher percentage of aluminum cans get recycled and suggests that this is a favorable factor.  This is a problem for sustainability pros for several reasons.  First, what does the “percentage” mean, weight, volume, or number of containers?   If containers, what size?  As is much of the sustainability debate, the specifics are hard to come by. 

The DMN story makes the unassailable point that the heavier container or tare weight of the glass bottles causes more fuel expense and associated Green House Gasses (GHG) per net weight of delivered beer product.  However, there is no consideration given to the energy consumption involved in the glass and aluminum recycling processes.  Wouldn’t that be a major factor in your calculation?  Well, it was not in the DMN author’s perspective but therein lies the problem for sustainability, and particularly green purchasing pros.  

Was the Conclusion Justified?

If  this is not enough taste for your palette, consider the physiological and gastronomical issues.  Yes, these too relate to the sustainability argument.   The DMN story intimates that the amber bottles of beer are not as light resistant as aluminum cans.  However, since beer is perishable after production, the inference that cans are better than bottles for shelf  life is questionable at best.  If the brew goes down the drain and the container is recycled (or not), what is the sustainability gain? 

What do you think?

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Expert witnesses are fairly common commodities for professions such medicine, construction, banking, IT, and hundreds of others.  A Google search for “expert witness” turns up hundreds of pages.  Most listings are brokers seeking paid registrations from experts on the one end and customers, usually law firms, on the other.  The broker then matches the laws firm’s need with the expertise obtainable.  

 Amongst the many hundreds of brokers and expertise specialties available, almost nowhere will you find an expert witness in purchasing.  This reality is another reflection of the reality of our profession.  Although purchasing is the most efficient generator of profitability in all of business, it lacks the high profile luster of sales, marketing, and finance, to name but a few. 

The American Purchasing Society is the best source on the web to find the most highly qualified experts in the profession.  One broker recently found and hired me through the Society.  His law firm client needed me to examine the discovery documents, write a report and testify on purchasing practice, ethics, UCC obligations of buyer and seller, freight terms, and related supply chain matters. 

Law firms expect experts to have earned professional designations such as Certified Purchasing Professional (CPP), Certified Professional Purchasing Consultant (CPPC), and Certified Professional Purchasing Manager (CPPM).  The ability and history of testifying, an understanding of the mechanics of legal process and law suits, experience in arbitration or other Alternative Dispute Resolution (ADR) are all helpful.  Some law firms will prepare and train witnesses in testimony etiquette using video taped mock depositions. 

They also need the expert’s Curriculum Vitae (CV), a summary of academic and professional history and achievements.  Here is what I list for areas of Expertise on mine. 

• Purchasing
• Purchasing Policies and Procedures
• Green Purchasing
• Negotiation
• Supply Chain Management
• Professional Practice in Purchasing

 Your brief bio should include publications in which you have been cited, your published works, related experience, and other useful skills.  Mine has the following:  Veteran business pro, Certified Purchasing Professional (CPP) and Certified Professional Purchasing Consultant (CPPC) providing training and consulting in purchasing and negotiation for public and private clients, extensive foreign trade credentials, Author of “You’re the Buyer – You Negotiate It” and “Green Purchasing and Sustainability“, foreign language fluency in French and Italian, strategic partner to the American Purchasing Society, member National Speakers Association.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

This hot issue shows no signs of being resolved.  Whether rebates benefit the bottom line or are just a gimmick can be a matter of optics.  

My view is that Rebates should be PRE-BATES.  Rebates are a great sales device but a violation of Cost up, not Price down principles of purchasing. This rebate craze grew out of the economic malaise of the 70’s with auto dealers offering “manufacturer’s rebates”. All they did was take an extra $2,000 of your money, spin it around in the interest mill in Detroit, and 6-8 weeks later sent you back your own money, but in a multi-colored shiny envelope.

When you get an income tax refund, are you happy? If you are, then you’ll love rebates. The government s sending back your own money that they over withheld.   Sellers justify rebates as a reward for loyalty and attaining certain volume levels. NONSENSE. At higher volumes, their costs are less so they are effectively given you money that you failed to negotiate.

Consider instead a partnering program where you establish a projected volume and set the price based on that volume. If you think the volume is unpredictable, then maybe a discount is not justified because the supplier can not achieve economies of scale. If you can predict a volume, factor it down by some percentage and settle on the discounted price up front. This way, you won’t be getting your own money back later. If you exceed the volume, re-negotiate these subsequent rebates.

Below are many gathered other viewpoints from online discussions from various sources about the topic.  Let’s examine them by groups.

Favor

• Well managed rebate programs can be one pathway to a lower price.  The rebate must be realistically achievable and subject to audit verification.   
• In a Business-to-Consumer (B2C) universe, supplier rebates are designed to boost sales.  Most sellers know that the number of rebates that are actually applied for and that meet the conditions of the rebate are small so it’s a low cost way to try to drive purchases and capture business from competitors.
• For procurement groups heavily focused on cost reduction, suppliers use rebates to entice buyers. The rebates often qualify as cost savings.
• Rebates represent too much of a bottom line contribution over and above operating profit for owners and executive management to ignore.
• 

  In-house corporate training

  Manufacturers can negotiate and incorporate the rebate in the price. For resellers where who must deal with Robinson-Patman Act price discrimination protection, it’s a good way to hide extra discounts. So you can pay $1 like everyone else in the same price volume but you can get 10 cents back on rebate for something like  that no else gets. 

Disfavor

• If there is enough money for a rebate, then that is money that was left on the negotiating table. Also, monitoring, verifying and disbursing rebates can be an additional resource drain to both the supplier and the customer.
• When rebates don’t relate to a specific project, they can be used to transfer money from one department to another, perhaps erroneously.
• Rebate programs can be a road block to potential value added services that might be achieved with a strong potential for customer savings. Although suppliers favor rebates as a means to securing higher volume sales, there is no guarantee that the goals will be achieved. Issues can arise regarding quality, delivery, and service that can outweigh any rebate.
• Suppliers should be willing to engage and “collaborate” with customers. Getting rebates for quality and on time delivery is a foolish business practice.  
• Rebates can encourage poor end of year behavior with money being spent just to achieve the rebate.  What is worse, the next budget year must resolve the “found money” problem.  Either the Finance team must accrue the value of the rebate or the money gets applied to the following year, or the rebate calendar out of time with the budget.
• The purpose and a value of a rebate as the cost reduction can be applied directly to the price. The actual processing of a rebate incurs additional cost and therefore the savings is diminished.
• Eliminate rebates so that management can view standard company reports or invoices and see the prices paid. Rebates are also vulnerable to abuse.  The only time to consider a rebate is when a processor quotes a total cost that includes a product that is purchased. A competing vendor may offer a rebate to compete with other suppliers. If this is done one must be certain that accounting knows about the agreement.
• Rebates can become “too a tight link” with the Customer, and it can be interpreted, as a sort of legalized bribe. It is much better to negotiate a price discount. 
• Have the hard savings applied to a reduction in cost rather than agreeing to volume rebates over a period of time. This way not only is the savings guaranteed, but is realized immediately. Rebates are generally counter-intuitive to both short term and long term cost savings goals. They are also hard to project and apply to the bottom line. They tend to muddy the waters on the cost savings spreadsheets and I have also seen them muddy the waters in the supplier relationship.
• Rebates are used by suppliers to influence customer sourcing decisions. For each purchase it can force an evaluation of any price difference against the impact that purchase would have on the rebate. If a Buyer wants the price break for a quantity and makes no firm commitments to purchase more, the supplier can either refuse or inform the buyer that the rebate will kick in once the quantity level has been met. The seller has nothing to lose.  If the buyer fails to purchase the required quantity, no rebate will be paid. 
• Many buyers view rebates as price reductions that they should have been receiving from the beginning and an additional cost as the supplier has the use of the buyer’s money until they pay the rebate.
• If suppliers will not agree to reduce the price and insist on a rebate approach, understand that the rebate is an attempt to lock you in for the future. Ultimately, chasing rebates could result in paying more than what the competition is charging to get the volume for the rebate. That may have been what the supplier’s strategy was in the first place by offering it.
• Very few buyers like rebates. They are a hassle and add costs of collection, accounting, and management. A rebate’s purpose is to hide pricing from the market. 

Uncertain 

• Rebates are just a tool, not an end-all solution. It may have value under some circumstances, and not in others. While having the savings locked in at the beginning is preferable, if a volume rebate is a last resort, it shouldn’t be dismissed out of hand.
• Some suppliers do not want to invest the time and expense to manage rebate programs. Others see them as a mechanism that drives sales volume and loyalty.  
• Most rebates are tied to sales volume.  In negotiating rebates, do it the same way you would negotiate any volume pricing. Look at where there are real cost differences and opportunities.
• If suppliers realize cost breaks from buyer volumes, the rebate should be higher than if your volume will have zero impact on their costs.
• The case against perpetuating rebates is easy to make in manufacturing. But in supply management, dependent on the resale of commercial and industrial goods, rebates are not going away anytime in the foreseeable future.
• If the rebates set are unachievable, they merely to encourage more spend. Unless the rebate is achievable, it will not work.

 Opinion

In this admittedly unscientific sampling, the overwhelming opinion is to disfavor rebates.  What do you think?

The value, power, savings, and efficiency created through a well crafted procurement card (P-Card) program are still poorly understood three decades after their debut.  Let’s better understand all that the P-Card does.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

What are P-Cards? 

P-Cards are a form of company credit card but are assigned to individuals.  Staff employees can buy goods and services by-passing the tactical procedure using requisitions and purchase orders. Authorized employees are enabled to buy what they need, within budget approvals, and use the P-Card to streamline the Procure-to-Pay (P2P) process.

Many controls can be programmed into the P-Card such as the amount of single purchase, the amount of purchases per month, and where the P-Card can be used.  For instance, administrative assistants can use the card at Office Depot but not Home Depot while the facilities technician can use the card at Home Depot but not Office depot.  The card can also restrict the universe of suppliers. For instance, if the corporate policy is to use “partner” suppliers with pre-negotiated service level agreements, the card will authorize transactions only with prescribed suppliers.

Who likes the P-Card? 

Good question.  Let’s look at the parties who benefit by the process.

1. The “requisitioners” by-passed the traditional purchasing entirely and get what they need.  No delays are consumed in the paper chase.  Incidentally, if you are one of those in the purchasing department who must return the wrong stuff bought by your requisitioners, you’ll be amazed how few “wrong” purchases are made by the card users who are responsible for their own time consuming return. We used to call this empowerment in the old days of soft skills buzz words.
2. The buyer is relieved of the tactical drudgery of shopping and placing orders for routine purchases.  The P-card system works best when purchasing pros centrally negotiate deals with suppliers that give the organization the best quality, service, delivery and price (the lowest Total Cost of Ownership).  An ideal application of the P-Card is for high volume low dollar purchases such as office or maintenance supplies.  After the deal is struck, the individual end users order and receive on a decentralized basis.
3. The suppliers are happy because they get paid in 48 to 72 hours.  This improves cash flow and reduces costs.
4. The supplier and customer companies each save the embedded transaction costs which average $150 for both buyer and seller.  Most credit card companies provide volume based rebates that are an issue for another blog post.

Types of P-Cards               P-Cards have become so popular that they have spawned a whole family of related cards.

• Travel P-Cards         Primarily used for employee travel and entertainment related expenses 
• Ghost P-Cards        the name derives from the fact that there is no card but merely an account number.  These are issued to a specific supplier or supplier type to process all the organization’s transactions.  Examples are monthly recurring charges such as utilities, insurance, employee benefits, rent, etc.
• Fleet P-Cards           this is merely a subset of the larger P-Card but dedicated to automobile expenses such as rental, lease, fuel, maintenance, and related vehicle expenses
• Pre-paid and single use P-Cards           cards preloaded with a spend limit and/or used for one-off high value purchases or some specific project spend.  These cards can sometimes be re-loaded.
• Pay Roll P-Cards or P/R-Cards  these are typically used for temporary help who sometimes may not have checking accounts.  These are used by the employees as a cross between debit and credit cards.

online training in purchasing, negotiation, and sales

Challenges to P-Cards for buyer and seller

While there are numerous benefits to P-Card programs, not all organizations are fully informed.  Some of the challenges and how to overcome them are:

• Accounting control                         many executives recoil at the idea of P-Cards.  This is a matter of education.  Some of my otherwise sophisticated clients resisted the advice to adopt a program until they were educated and persuaded of the many accounting controls built into and perfected in P-Card programs.  It is actually much easier to spot fraud and misuse in the digital world.
• System integration                        The early days of integrating the P-Card data manually are gone.  Manual integration into ERP systems creates more administration, cost and error. Ask the card issuer about how the card charges are applied in the general ledger for accurate accounting and budget control.
• Cardholder administration           P-Card programs generally require a person to oversee the issuing of new cards, terminate cards, monitor activity and communicate with the issuer.   This person, the Card Administrator, typically assigns dollar limits and restricts suppliers in concert with purchasing, finance, and management inputs.
• Supplier resistance                       Suppliers pay a user to become a credit card acceptor and as a result not all suppliers participate in P-Card programs.  This obstacle can usually be eliminated with a little education, particularly as to quick payments.   

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

As the leading organization in the advancement of professional purchasing, the American Purchasing Society  announces a new designation to meet the growing marketplace demand and serve its members.  In collaboration with Robert Menard , Certified Purchasing Professional (CPP) and Certified Professional Purchasing Consultant (CPPC),  the Certified Green Purchasing Professional (CGPP) designation will be available in early 2012.

Sustainability is all about preservation and conservation, which are synonyms for savings. Savings are the sole province and forte of the purchasing profession.  I am proud to partner with the Society in this important matter.  The Society is the industry leader in development of products and services to meet the needs of the purchasing profession.   

The Examination will ensure that the CGPP designee has competence and skills necessary to lead and master the challenges of a changing business landscape. 

 As part of the curriculum, my workbook and manual, Green Purchasing and Sustainability  will guide designee candidates through this new and promising field.  I will also be personally available for coaching throughout the Exam process. 

More details will be available soon.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Sustainability is here.  Whether seen as a fad or a viewpoint with which you might not agree is secondary.  What is primary is the fact that sustainability is all about cost savings.  Of course there are political agendas at work but even they can be translated to cost savings.

Cost savings are the province of purchasing.  Purchasing is in the position, either because we choose so or de facto, to lead the green revolution.  We can educate ourselves in two ways, digital or paper media. 

Click here for a two minute video on this subject.

One thing you will soon realize is that there are no simple or clearly defined guidelines as to what is or how to achieve sustainability.  There is even a bona fide controversy over whether paper or pixel is more sustainable and thus the reason for this important material to be provided in both media.   

Think that sustainability does not affect purchasing?  On the contrary, the greatest gains in all of business by going green are made by purchasing.  Green Purchasing and Sustainability actually saves many times the cost of implementation, if any.  Consider the cost savings potential for these content areas.

Energy and Fuels

• Conserve electrical energy
• Conserve fuel and use more efficiently
• Choose alternative fuels on a Btu/$ basis
• Calculate dollar savings using carbon footprint data
• Why to choose certain fuels for varying applications
• Convert energy to green house gas calculations

 Commercial, Industrial, or Institutional organization

• Apply the 3Rs of Reduce/Reuse/Recycle to manage
• Use “gray” water and other landscaping techniques
• Conserve and preserve natural resources
• Calculate ROI 
• • waste water
  • waste paper
  • storm water
  • printed material

 Construction and Facilities

• “Green up” facilities through construction techniques
• “Green up” facilities through lighting and HVAC modifications
• Build green buildings with LEED guidelines
• Build Low Impact Development (LID)through a variety of techniques
• Uses for detention and retention ponds
• Reduce combined Sewerage Overflow (CSO)

 Chemical/Environmental

• Calculate the greenhouse gases saved by your savings
• Calculate carbon foot print

 Corporate Social Responsibility CSR)

• Improve corporate image with customers
• Make significant carbon foot print reduction
• Learn how major corporations are pushing Sustainability throughout the supply chain
• CSR gains = cost savings

Plus, Plus, Plus

• Dozens of tables, calculations, and charts
• Case Studies
• Follow up subscription  service to keep abreast of the torrent of new material

 Bonus: How to Write and Implement a Green Purchasing and sustainability Program

 If you are still not convinced, take this quiz . 

To order the the online course, click here .  For the workbook and manual, click here to order.  Discounted prices apply to bulk orders.

Harry Hough, PhD, founder of the American Purchasing Society

Editor’s note:Dr. Hough is a frequent contributor to this blog.  This story first appeared in Professional Purchasing, a publication of the American Purchasing Society.

Now is the best time to negotiate. It is easier to obtain concessions from existing suppliers when the economy is depressed and from new suppliers to make the best offers when they are hungry for new business.

For many items prices are down or steady. Inflation is relatively low except on certain products. Because the economies are down in other countries as well, they too are more willing to negotiate and offer attractive bids. Both domestic and international sources will be less willing to do so as business improves.

Present suppliers are not likely to offer price concessions without being asked to do so. They are reluctant to reduce their prices voluntarily which will only cause them greater financial pain than they are already experiencing because of a lower sales volume. On the other hand, there is a good probability that they will see the necessity of agreeing to a lower price because of some slight arm twisting.

online training in purchasing, negotiation, and sales

To be successful, a buyer’s request for a price reduction needs to be supported by facts. Justification should be based on the availability of better pricing from the competition. However, a supplier should never be told what prices were received from another supplier, nor should the buyer indicate that lower prices were received if that were not actually the case. Other justification for lower prices derives from internal cost reductions made by the supplier. Many companies have laid off employees, cut back salaries, and made reductions in expenditures. The result has often been large increases in company profits.

Buyers can sweeten deals by offering long term purchase agreements based on needs. Suppliers thus obtain a certain amount of security from guaranteed business. Each negotiation should be planned based on what the buyer must have, what the buyer can afford to give, and what the particular seller would like. The best results may take days, weeks, or months, but taking too long to conclude an agreement will mean the business climate has changed and a better deal will no longer be possible.