Purchasing and Negotiation Training

Harry Hough, PhD, founder of the American Purchasing Society

Editors note: Dr. Hough is a regular guest contributor to this blog.

There are both Good and Bad times to negotiate.  Let’s identify many of these so that we don’t fall into easy traps.

 GOOD TIMES TO NEGOTIATE

• Whenever you make a purchase for a new item
• When the potential rewards in the long run are higher than accepting the original offer
• When you have been giving or expect to give an ever increasing amount of business to a supplier, but are still getting the same low volume price
• When new untried suppliers are trying to obtain business and are giving you rather attractive bids and your existing supplier is performing very well
• When you are in no hurry to place an order but know you will need the material or service in the future
• When it is a buyers market and it has been over a year since you discussed your on-going purchases with an existing supplier
• When the news media reports that prices for the products you purchase are going down but you have received no reduction from your supplier
• When you are well informed by knowing the product, knowing the company you are going to deal with, and knowing the state of the marketplace
• When the supplier is in a hurry to make an agreement with someone quickly
• When the supplier announces a general increase or a supplier tells you he must increase prices

BAD TIMES TO NEGOTIATE

• When you need the product or service immediately
• When you are in a hurry or have a limited amount of time to spend
• When it is a sellers market and it has been over a year since you discussed your on-going purchases with an existing supplier
• When the news media reports that prices are going up but you have received no hint of any increase from your supplier
• When you do not have all the facts
• When you don’t know the product you are buying
• When you don’t know anything about the company you with which you are dealing
• When you don’t know conditions in the marketplace
• When you are tired, under undue stress, or emotionally upset
• When you don’t know the limitations of authority of the people with whom you are dealing
• When you don’t know your own authority to make concessions
• When the supplier knows your business is failing or that your company is near bankruptcy