Negotiations with suppliers are an integral part of the work of procurement specialists; The success of procurement activities as a whole largely depends on the outcome of negotiations. However, studies aimed at identifying effective negotiation strategies in this area are very few. This article presents the results of a large online survey in which purchasing managers from 69 companies were asked to rate the effectiveness of various negotiation techniques in the context of purchasing activities.

Undoubtedly, the best-known guidelines for negotiation were developed by the Harvard Negotiation Project, the results of which were first described in detail in the book The Path to Agreement, or Negotiating Without Losing, by Roger Fisher, William Ury, and Bruce Patton. This book, published in 1981, is today considered one of the classic works on negotiation techniques. The Harvard researchers' core message - "be firm on the issue, but gentle with the people" - is reflected in the key recommendations formulated during the project. Researchers from Harvard have conducted research in several fields, including game theory and psychology, and the results of their work formed the basis of our online survey.

Research into negotiation strategy within the framework of game theory is based on the assumption that the behavior of negotiators is strictly rational. Proponents of this theory, guided by the works of Nobel laureates John Nash and Thomas Schelling, have conducted a lot of research in the field of negotiation strategy. Taking into account the fact that with this approach the emphasis is on the problem of rational choice, one of the most important objects of analysis of the negotiation process within the framework of game theory is the exchange of information between negotiators.

Unlike analysts who proceed from the thesis of rational behavior, scientists who consider negotiations from the perspective of social psychology pay primary attention to psychological and behavioral factors.

Researchers belonging to this school study the following aspects: what style of negotiations people with one or another personality type prefer and what are the typical psychological mistakes made by the parties before and during negotiations.

In addition, there is a structural theory of negotiations, as well as a theory that considers negotiations as a process. Within the framework of structural theory, aspects related to the formation and use of a negotiating position are analyzed. Researchers working in this direction pay great attention to issues that relate to the best alternatives to the agreement being discussed, that is, the opportunities that are available to participants in the negotiation process. It is these opportunities that form the decision space and determine the freedom of action of each party. A theory that views negotiation as a process focuses on the role played by each individual stage of negotiation (preparation, initiation, main rounds, conclusion, etc.) and what the critical factors are that determine success or failure at each stage.

In the context of purchasing management, none of these theories can be considered the most or least significant. The outcome of any negotiation depends on the specific situation, so developing an effective negotiation strategy and its successful application requires an integrated approach. In other words, all aspects must be taken into account, since each of these aspects can, to one degree or another, influence the development of events in the negotiation process. One should not rely entirely on any one theoretical model, since each of them has its own value.

In our online survey, we asked respondents, who primarily included purchasing managers, to rate 21 tips for successful negotiations from the perspective of purchasing professionals. The rating was given on a five-point scale, with one point characterizing the recommendation as “extremely important” and five points as “unimportant.” Of the 21 recommendations, none were considered “not important.” At the same time, eight recommendations were rated “very important” or “extremely important” (see the sidebar “Strategy and Tactics for Successful Negotiations,” which lists the eight most significant recommendations, according to respondents, in order of decreasing rating). All other recommendations were considered "important" with the exception of one - to underestimate the value of goods and services that are the subject of negotiations.

Recommendation 1 - do not allow negotiations to result in interpersonal conflict - can be considered the main guideline. According to the survey results, this recommendation, which directly reflects the results of the Harvard Negotiation Project, received the maximum rating. There is no preparatory work required to take advantage of it, while the other seven recommendations, rated “highly important” or “extremely important,” require careful preparation for negotiations.

Thus, preliminary preparation can be identified as a separate factor influencing the outcome of procurement negotiations. Before any serious negotiations begin, procurement managers must ensure that staff have gathered the basic information necessary to compile a comprehensive “negotiation dossier” that meets the highest standards. Effective preparation for the negotiation process is the most reliable guarantee that procurement specialists will be able to achieve the highest possible results during negotiations.

Strategy and tactics for successful negotiations

1. Don't allow disagreements on the subject of negotiations to result in personal attacks and conflicts.
2. When developing your basic negotiation strategy, always look for alternative suppliers and alternative opportunities.
3. Make thorough preparations - before sitting down at the negotiating table, you should soberly assess the interests and positions of the parties.
4. Use communication techniques wisely, such as open and closed questions and active listening.
5. Try to simplify the discussion of controversial issues by using objective evaluation methods, such as price comparisons and cost analysis.
6. Be prepared to propose and consider new, alternative solutions during negotiations that will allow you to achieve better results.
7. Take into account the personal characteristics of your negotiating partners (degree of extroversion, information preferences, sources of irritation).
8. To plan for what to do if negotiations reach an impasse, evaluate each party's best alternatives to the agreement before starting negotiations.

1. Organized planning of the content of negotiations.
2. Comprehensive analysis of the solution space.
3. Planning strategy and tactics of negotiations from a psychological point of view.

Organized planning of negotiation content

Recommendation 3, which respondents considered “extremely important,” addresses a key aspect of preparation for negotiations: assessing the interests and positions of the parties. When preparing for negotiations, managers and procurement specialists must identify the range of issues that are most significant to each participant. For example, a buyer may be primarily interested in price, quality and reliability of supply, while a seller may be primarily interested in price, delivery time and packaging requirements. It is important to weigh all aspects to determine where compromise is possible and where it is not. Based on the results of the analysis and his assumptions, the buyer can understand which concessions the seller will make easily and which will have to be achieved with great effort.

According to Recommendation 8, it is also useful to find out what options are available to each of the negotiators and which of these options the parties will be willing to use. This can be determined by analyzing the best alternatives to the discussed agreement available to the parties. However, to do this, you must first obtain as much information as possible about the supplier and its current position in the market. Unless the procurement professional has knowledge of the supplier's order backlog, it is nearly impossible to determine the best alternatives available to the supplier for the agreement being negotiated. To strengthen your negotiating position, you need to have many alternatives to the agreement, and really good alternatives.

This is where Recommendation 2 comes into play: only those buyers who pay sufficient attention to searching for alternative suppliers and identifying alternative opportunities can expect to enter into agreements that serve their interests. If the supplier suspects that the buyer has no real alternatives, he will insist until the last minute that all of his requirements are met. As a rule, suppliers strive to maintain close relationships with the buyer's specialists who work in manufacturing and product development departments. Thanks to this, the supplier is usually well aware of whether the buyer has viable alternatives or whether the supplier has a monopoly position.

Comprehensive solution space analysis

In addition to organized planning of the content of negotiations, preparation for the negotiation process includes the study of the solution space through analysis and the construction of hypotheses. The key elements in such studies are the criteria for decision making, as well as the scale and boundaries of the decision space. As noted in Recommendation 5, it is necessary to define in advance criteria for success based on measurable indicators, that is, develop criteria for assessing the results that each party plans to achieve during the negotiations. For example, to determine the target price, the buyer can conduct a comparative price analysis and/or a comprehensive cost analysis - this will help to find out what the optimal price should be for a product supplied in certain volumes. Companies that have established effective purchasing practices typically hire cost planners to carefully evaluate supplier costs. These costs include the costs of producing the goods that will be discussed during the negotiations: these are the costs of product development and the acquisition of raw materials, as well as production costs. With knowledge of these costs, the buyer can negotiate a fair price. However, this only becomes possible if each party is willing to openly discuss their costs as part of the negotiation process.

Along with the formulation of criteria for decision making, an important role in assessing the decision space is played by the definition of its boundaries. Following recommendation 6, it is useful to consider possible alternatives during negotiations. To avoid negotiation pitfalls, procurement professionals must think through and evaluate alternative scenarios in advance. Typically, these scenarios also need to be discussed and agreed upon with other decision makers in the company. Typical alternative scenarios developed within procurement management include prepayment, direct reimbursement of some fixed costs (such as tooling and engineering costs), alternative logistics arrangements, and leasing options. It's always good to have alternatives like this on hand. If there is a danger that negotiations on controversial issues (for example, on price) may reach a dead end, the negotiation process can be resumed by offering alternative scenarios to the partner.

Planning strategy and tactics of negotiations from a psychological point of view

Having clearly defined the content of future negotiations and explored the solution space, procurement professionals can move on to the last critical stage of the preparatory process. At this stage, it is necessary to figure out how and with whom to negotiate. Related research has shown that people with different personality types negotiate differently. In this regard, you should refer to recommendation 7, the essence of which is as follows: it is necessary to analyze in advance the personal characteristics of the negotiating partner and find out what style of negotiations he prefers. Some people can only be persuaded by logical arguments, while others are susceptible to emotional appeals, in particular to arguments such as the duration and efficiency of the business, as well as personal relationships between partners. Some people immediately put on the brakes as soon as they feel pressure from the other negotiator, but it also happens that it is simply impossible to achieve serious concessions without pressure. Therefore, it is important to determine what type your potential supplier is. The more you know about your partner's personality traits, the higher your chances of success.

Recommendation 7, regarding the analysis of personal characteristics, is closely related to recommendation 4, according to which language and communication techniques should be used competently during negotiations. This is especially important when conducting procurement negotiations. Thus, the procurement professional must carefully practice communication techniques such as active listening, questioning techniques, and persuasion techniques. In addition, it is necessary to carefully plan the use of these techniques in the context of specific negotiations. How can I use listening techniques to show my partner that I am ready to listen carefully to his position? What should I ask my partner to find out what his goals are in this negotiation? What arguments will your partner find convincing and which ones will be stronger than his own arguments?

– everything is more or less clear. There is a choice, there is something to lose for each other, subject to restrictions and the market, it is proposed to choose the most convenient option. But what to do, for example, when there is no choice and there is only one supplier of goods and services? How to behave with him? The current economic situation, by the way, contributes to the fact that competition in a number of areas will be reduced to zero, and buyers need to do something to counter the “force of evil” (thanks to “Star Wars” for the term). So what to do?!

Probably everyone has heard a wonderful joke about strategists when an owl says to mice “We must become mice!” For the most part, most negotiation training courses amount to the same thing. People who did not negotiate with the supplier were not in the position of a “weak link” and had no choice: you come to an agreement, either tomorrow the plant will shut down or the management will fire you due to the lack of goods at the required price trying to teach this. Precisely because it is not so easy to teach negotiations in courses, especially with strong suppliers, this will be our first and most likely last article on the topic of negotiations.

Let's first figure out why there is only one supplier and why you need his product.

There may be several reasons:

- Historically, only he produces this. ( this was the case with rails, for example, until recently)

— Technical limitation when the enterprise is tailored to one type of raw material

— Some suppliers dumped, killing competition and eliminating rivals from the battlefield, and as soon as they left they decided to raise prices.

— Large buyers receive all the best, and the rest plus many percent on the price and growth every day, thereby killing competition in the final product.

There are others, but in any case, whatever the reasons why a company finds itself in a “weak negotiating position,” they need to put pressure on the strategic component rather than try to “bend on price.” We decided to help a little with this issue and offer to familiarize yourself with a set of four steps that (we hope!) will help the company get, if not the desired, but close to it price in a market where you have virtually no choice. Here's what we offer:

Negotiations with suppliers step #1: try to explain the value of you as a buyer to your supplier

This is not about the fact that by purchasing his product, the supplier will make a profit. A little different story.

For example, your product is exported. And using raw materials/products/components abroad, you can open foreign markets to the “local monopolist”. Maybe your international development department is much stronger than your supplier's. He can't reach the same markets, but your product can. Open the “doors” for him, ask for a discount for using him for export goods.

For example, reduce supplier risk. It happens that large manufacturers are again “historically” tied to the raw materials of a small supplier. A small supplier can raise prices, he understands everything perfectly well. True, its production volumes are also not unlimited. So what to do? Move on to consider a long-term agreement that will allow both him and you to plan volumes. Both for him and for you to reduce the risks of loading/receiving raw materials. A 10-15-20 year contract with a clear rate of return may be of interest to the supplier. And in return - a 10% discount on current base prices - an equivalent exchange.

Negotiations with suppliers step No. 2: change the procurement format

If you don't feel you can bring additional value to the supplier, then let's think about how to change your procurement format.

For example, . It often happens that in large companies, various divisions purchase similar goods and services from the same supplier. This leads to the fact that the supplier successfully takes advantage of the moment, earning much more from customers than you would by selling your products. What to do? Consolidate. We already wrote an article on this topic some time ago. It is located here and you can familiarize yourself with it.

Another format for consolidating volumes is the creation of consortia, associations, and groups among small consumers. Together they can give a “good carrot” to suppliers and they will simply be forced to reduce prices. Another question is that competitors will essentially join this association and how our FAS will look at this. We need to study the details.

For example, buy something else besides a specific item. If you cannot collect significant volumes of goods to offer to the supplier, you can see what else you can purchase from him. Even if there is an alternative, but this supplier is ready to supply at market prices, and in addition to give a discount on products that you cannot buy anywhere else, if it is economically justified, you must use it!

For example, reduce consumption. Honestly, when the supplier realizes that he really has something to lose, that with such prices you can easily find an alternative product or rebuild internal processes for another supplier, he will change his attitude towards you. This can probably be called one of the most powerful tools in the fight against would-be monopolists.

Negotiations with suppliers step No. 3: creating another supplier

As they say, “if you can’t fight a competitor, buy it.” If your company can afford it, then why not use it. But this article is rather for those who cannot afford to buy everyone who enters into a strict contract.

For example, create and develop other suppliers. The situation when, as a result of dumping, most suppliers disappeared from the scene is common in our time. But who to look for and hire for “development”? It may be better to start with foreign companies that are considering, but are not yet ready to come to the country of presence. With your support, a small report on the market, volumes and consumers, they may be interested in this proposal. In second place are local suppliers with a small market share. It is possible to negotiate, guarantee the volumes for which they will expand capacity, obtain acceptable prices and get out of the monopoly situation. Or send your “troopers” to develop their processes and search for weak links in the same supply chain that do not allow them to compete, and by finding them guarantee savings.

For example, produce it yourself. If you think that in the “Make or buy” formulation you are getting closer to Make – go for it! Start developing your production if it does not require unaffordable investments. Proper calculation together with the financial department can improve your situation in the market. Therefore, always communicate with colleagues.

Negotiations with suppliers step No. 4: we begin to fight with suppliers

Correctly assess your strength before getting into tough opposition. Find an alternative, restructure processes, purchase large inventories. Do the math so you don't lose in the upcoming battle. Severely close all projects with suppliers and their access to competitions, remove them from everywhere, from all articles about suppliers and products. Share information about the supplier’s work with the market as much as possible. We must survive this fight.

As you can see, you can’t give up right away, you need to look for options. If suddenly you are the head of a company, and your buyers show all the hopelessness for you of a particular supplier - doubt it. Probably, only in 10-15% of cases everything is really bad (we exclude oil, gas and other monopolies), in the rest you can look for options to come to an agreement, change the format of work and procurement.

We really hope that this article will help you at least a little in your work and communication with suppliers and customers. If you have other ideas on how to negotiate in a situation where you need a supplier more than he needs you, write to us. We will collect options and update the article!

“Lucky is the one who is lucky” - this is what the proverb says, and we absolutely agree with this.

Business consultant and specialist with current experience in management and negotiations, Sergei Ilyukha, gave a proven scenario for negotiations on the introduction of new products into the assortment, turning a loss-making deal into a profitable one.

Why do suppliers overpay networks?

I would conditionally divide all suppliers into three groups:

• Beginners. Such companies offer 5-15 types of “incomprehensible” goods, do not explain to the network why they need it, and want to get on the shelf at any cost (sometimes literally!)
• Experienced. Manufacturers who are already working with the network, are represented in several product categories, know the rules, know their economy, behave “with dignity, but not arrogantly”
• Monsters. Market or product category leaders with strong negotiating positions.

I’ll make a reservation right away. Any buyer will explain to you quite reasonably that there are no irreplaceable suppliers or products. There are only suppliers who are difficult to replace. And there are networks that the supplier is not afraid to lose. This is where “monsters” appear. Negotiations on an annual contract with them are difficult, the buyer has to make mutual concessions. Contract profitability is sometimes low. Therefore, working in a retail chain, I always looked forward to the moment when the “monsters” would have new products.

The day when my long-time opponent appeared on the threshold of my office with the words: “Hello, we have released a new product and would like to put it on the shelves of your supermarkets” promised me a quick solution to all current issues and a general improvement in the terms of cooperation. Why is the manufacturer so defenseless at this moment?

• He comes with an unknown product
• It has no sales statistics
• He needs the decision to be made urgently
• A new product must be entered into the matrix
• He offers the product at the moment when all agreements have already been reached
• The buyer does not know about the product and is initially not interested in entering it into the matrix.

Due to these circumstances, regardless of whether this product is needed or not, I included the “I don’t want anything” manipulation. It was clear to me that, unlike negotiations on concluding an annual contract, the manufacturer offering a new product has no resource maneuver. It must either give the network something truly valuable. Or something to scare the buyer. As a rule, it is impossible to scare, because the network operates within the framework of the contract. And the supplier has no choice but to “pay for entry” in one form or another.

How not to offer new products

In order to overcome the buyer’s manipulations and convince him to introduce the product into the range on mutually beneficial terms, the supplier must have strong arguments. First, let's look at what arguments a supplier usually comes to the network with when offering a new product.

• The sales manager and his managers have faith in their product
• Discount in price for new product
• Additional premium or trade credit (deferred payment) for a new product
• Program for bringing a new product to market from the manufacturer
• Added value.

There are no sales statistics. There are arguments from the field of marketing, branding, loyalty and enthusiasm. And these are quite controversial arguments when discussing economic issues. A fair price for the new product has not yet been formed. Arguments such as “This product costs 500 rubles. But you are a very important sales channel for us, and we will give you the first batch for three hundred,” they work only in the eastern bazaar.

A large premium and deferment are beneficial to the retailer only when sales are high. With zero sales, the amount of the premium and the benefit from the additional deferment will be zero. In addition, for food products, the amount of deferment and premium is strictly limited by the Trade Law. And if a new product does not have sales potential, then the program for introducing it to the market simply will not work.

But the goods must be put on the shelves! If it is important for a manufacturer’s manager to promote a new product at any cost, he will give the network everything he has, as long as he doesn’t have to pay anything for it. I especially remember one example from my practice.

A regional manager of one of the leading alcohol importers came to the negotiations and proposed introducing a new premium segment cognac into our chain’s assortment, which was developed by the owner of the company himself. He placed several bottles on the table and began his presentation. The presentation contained a standard set of arguments:

• Unique product
• Beautiful bottle
• Best plant
• Special price
• Additional deferment
• Prize
• Budget for promotion
• Promotion 2+1 for the first month.

It would seem that it couldn’t be better! I did not carry out the standard “The shelf is not rubber” manipulation. I saw the prospect of improving the contract as a whole. So I went the other way and asked:

How many bottles per month do you plan to sell?

Maybe two or three at each outlet, was the answer.

At this level of sales, introducing your cognac into the assortment is unprofitable. Come back when he becomes recognizable and in demand.

But we need to start sales as quickly as possible...

The supplier spoke the language of his needs and needs. A typical mistake. Even before the negotiations began, it was clear to me: the manufacturer needs the cognac to get into our network at any cost. But the manager who represented the supplier did not have enough authority to provide the conditions that would suit me. Therefore, the task of the first stage was to take the negotiations to a higher level. To do this, I used a technique that I call “false alternative” and offered the manager two options:

1) We can sell cognac, but there is a very high probability that they will not buy it. Therefore, in order to compensate for losses, we will have to remove four other low-liquidity positions of your company from the assortment and introduce additional two positions from another manufacturer that show good sales.

2) Your new product interested me, but our network has strict standards for profitability of sales and return per meter of shelf space. If you take on commercial risks and guarantee the required rate of return for the portfolio and category, I will try to quickly resolve the issue.

The first of the options I proposed was obviously unacceptable. So I started selling the vendor a solution to their problem myself. The manager asked for time to think, and a week later a “high leader” came to see me. Together with him, we began to look for ways to solve the problem (or, more precisely, budgets), and very quickly we were able to agree.

• We introduced cognac into the assortment matrix, but removed two illiquid positions from it (we kept the number of manufacturer SKUs on the shelf and did not put a competitor’s product on it)
• The network premium across the entire portfolio of this manufacturer was increased by a percentage (compensating for a possible loss of profitability)
• We agreed to hold several promotions for top positions that are important to me (to guarantee profitability)
• We resolved a number of controversial issues of cooperation in favor of the network (I met the manufacturer halfway)
• The cognac on our shelves became “golden” for the manufacturer, but everyone was happy!

How to talk to buyers

What should a manufacturer do to convince a buyer to take a new product without harming its own economic interests?

• Pre-test sales. Come online with statistics, reviews from customers and other retailers.
• Do not forget that the retailer does not need a “unique product”, but a product that will allow him to make money. When presenting, it is necessary to talk not about the characteristics of the product, but about how it can be useful to the network, or even better, about what problems it will help solve.
• Give the sales manager more authority, the ability to maneuver resources and benefits in order to create an attractive package offer for the retailer.
• Grant the manager the right to introduce new products not to all stores, but only to those where they will show the highest sales during the test period.
• Negotiate correctly with the buyer.
• When signing an annual contract, leave yourself an “ace up your sleeve” in case new arguments may be needed to solve the problem.
• If the issue cannot be resolved immediately, you have the opportunity to postpone the introduction of goods into the assortment until a new contract is agreed upon.

The negotiations on the supply of cognac that I described could have gone a completely different scenario if I had heard from the manager something like the following: “Our product showed high sales in test stores. Surveys say that the buyer compares it with French cognacs, and the price is 30% lower. At the same time, you earn even more per bottle. We guarantee that when placed in hypermarkets with the right product range, our cognac will ensure sales of at least X units per month. At the same time, it will not delay sales of other products, but will attract new customers.”

• It is important to try to combine negotiations on the introduction of a new product with the moment when the buyer invites you to resolve an issue that is important for the network.
• It is important to take the initiative and not allow the buyer to change roles with you. It is your product that will help the network earn a lot of money, and it is not the buyer who will help you personally solve the problem of logging into the network and not get thrown out of work.

If the moment is chosen correctly, when discussing the supply of cognac, the manager could say to the buyer: “I understand that you invited me to negotiate an unscheduled promotion. But my managers made it very clear to me that until I got my product on the shelves, promotions were not even discussed. On the other hand, if we introduce the product into the assortment, within a week you will receive additional income from the sales of this cognac. And I guarantee you that after this I will quickly approve the action.”

An additional argument in favor of the deal could be: “We have been discussing with you for a long time the issue of switching to deliveries through a distribution center. I think introducing this cognac will solve it as quickly as possible.” Or this argument: “There are products left in your network from last year that were not included in the new contract. It sells poorly and just takes up space on the shelf. If the problem of free shelf space is so critical, we can discuss buying out the remaining balances.”

If the supplier manager had used these recommendations, the issue of introducing new products could have been resolved much easier. But there is no single solution. These recommendations do not work if the new product has no sales potential or the supplier is new to the network and does not yet have voting rights. In addition, each network and each buyer needs an individual approach. You just need to be aware that introducing new products is actually concluding a new contract for entering the network. And you need to prepare for negotiations just as carefully as you would for negotiations on an annual contract.

Negotiation is a critical part of any business partnership. Further work with the client or supplier largely depends on the quality of the negotiations, and it is at this stage that the main conditions of cooperation are determined.

From a psychological point of view, each of us is a unique individual. We have our own life position, views and preferences. The same applies to a person as a counterparty in the transaction process. The director, manager, financier and other officials represent a specific company that needs specific conditions. The private client, in turn, is interested in a certain product in a certain quantity. The people with whom you will negotiate need specifics - this is important. But along with it, there are standard negotiation techniques. They can be considered as a kind of template, in the good sense of the word. These rules are formed on the basis of factors such as business ethics and psychoanalysis, so their effectiveness can hardly be questioned.

So, the rules for successful negotiations include the following points:

1. Preparation. You must clearly understand the purpose of the negotiations even before they begin. Ideally, break this goal into three points: the planned result, acceptable and undesirable. For each of them, it is necessary to have its own strategy of behavior, which is put into action even before the result is achieved. Let's say you see that the conversation is going in the wrong direction, and you cannot come to a common denominator with your interlocutor. Use techniques that will give you the opportunity to get out of the situation.
2. Performance. At the beginning of the conversation, make it clear to your partner who you are, what company you are acting for, and for what purpose you invited him to this conversation. This will help avoid many questions in the future. An informal retreat makes sense if you really know how to communicate on abstract topics. If the conversation “about the weather” is done insofar as it is insincere, it will only be harmful, because will be a waste of time. Which many business people simply lack. It's better to get straight to the point.
3. Understanding. Of course, during the negotiation process you must defend, first of all, your interests. But it wouldn’t hurt to look at the conversation from the other person’s point of view. This will help you better understand what advantages of your offer you can highlight for him. Know how to listen and hear someone else's position.
4. Entourage and appearance (for “live” negotiations). Make sure that the negotiations take place in a suitable place, where no one will disturb you. If this is an office, its furnishings should be business-like. Close the door (but don't lock it) and make sure no one disturbs you. If this is a cafe, try to choose a cozy establishment. Do not invite persons whose presence is not required to participate in negotiations. Control the time of negotiations, do not delay them, but also do not look at your watch every 5 minutes, this is a sign of bad manners and your lack of interest in the deal. As for appearance, it must be neat. You're hosting a business meeting and need to look the part.

In fairness, it is worth noting that on this point everything is purely individual. Often people, when promoting their product or service, create such an appearance for themselves that their interlocutor at first cannot understand with whom he is even talking. This makes it possible to play first fiddle in terms of business communication, while the other party devotes time to studying you as a person. But here on a thin one. It is important not to overdo it, because... Excessive expressiveness in style can also give a completely opposite result - a person initially will not see you as a serious partner.

1. Positive nature of the conversation. Both you and your interlocutor are interested in mutually beneficial cooperation. This is good, isn't it? Show your positive attitude. But not with the help of an “on duty” smile or fawning, but so that the emotions are sincere. Talk about the prospects for cooperation with feeling, with a sparkle in your eyes. If you do not prevaricate, it will be very easy to maintain such a tone. But at the same time keep your distance. Perhaps in the future you and your interlocutor will become best friends, but at the moment you are representatives of different business parties, each of which defends its own interests.
2. Unambiguity. If we are talking about financial partnership, terms of payment for goods, etc. points, it is necessary that they all be clearly stated, and then spelled out in the contract and not be subject to double interpretation. Naturally, you shouldn’t sign the document right away. Why - see the note above this point.
3. The main thing is the details. Didn’t understand what this or that phrase from your partner’s mouth meant? Don’t be lazy to ask him a clarifying question. Doubts, uncertainty, etc. feelings must either be confirmed or dispelled. Clarifying questions in this case are the best way.
4. Maintain balance. Between the “good and evil policeman.” Another important factor on how to negotiate a collaboration. Here, as in battle, the strongest is not the one who attacks, but the one who takes the blow. You need to defend your positions not through refusals, disputes and other negativity. It is important to demonstrate professionalism. And then the partner will be more loyal to the conditions you propose.
5. Keep your word. Since we test our partner for honesty and integrity, we can be sure that he will do the same. Promise only what you can guarantee. Keep your promises. More precisely, not even promises, but obligations under a future agreement. Otherwise, you will face not only moral, but also administrative (and sometimes criminal) liability. Plus, it's your reputation. Don't let her get hurt.
6. Competent end of the conversation. After negotiations, the parties must reach a joint outcome. This may be a compromise, a preliminary agreement, or sometimes a categorical disagreement of the parties with each other. But negotiations cannot be left unfinished. Even if they were just one of the stages, after which you will have other meetings, conversations or correspondence. Treat them like you read a chapter from which you need to draw a conclusion. And, of course, observe basic politeness. Shake the person's hand (if it's a man), smile at the lady, wish her a good day. Do this regardless of the outcome of the conversation.

IMPORTANT! The outcome of negotiations does not mean a decision has been made. The verdict on cooperation should be made only after thinking it over in a calm atmosphere, discussing with your colleagues everything that you talked about during the negotiations. Especially if the interlocutor offered you options for cooperation that you had not previously thought about. You need to carefully analyze this proposal and understand whether the stated conditions suit you. It might be worth looking for pitfalls. To make it easier to understand, take notes during negotiations. If you agree to a deal during the conversation itself, you can become a victim of a personality with strong charisma, due to which you will be confused.

How to negotiate with a client?

The above recommendations applied to negotiations in general. Now let's look at a few points regarding what line to follow when communicating with the person to whom you want to sell something. It doesn’t matter whether it’s a wholesale buyer or a retail client. For us, he is first and foremost a buyer.

1. Find out what the client needs. What product, in what volume, for what purposes (remember the specifics). After receiving this information, let the person know that you can implement his requests.
2. Describe the benefits of the product. Preferably with numbers. How many components are richer than its composition, how many times this product will help you save, etc. This will allow you to justify the price you want to receive for the product.

IMPORTANT! You must understand all the advantages, first of all, yourself. Only then will you be able to justify them and convey them to the buyer.

1. If the price doesn't suit the client, don't complain on the fact that such a cost is due to the costs of production, logistics and other expense items. The buyer is not interested in this. It is better to emphasize once again what benefits he receives from the acquisition. Preferably financial. If there really are any, the person will gladly pay you one time in order to save in the future. In some cases, you can offer a discount and special conditions. Which ones exactly – calculate in advance, as well as the size of the discounts.

Benefits may include:

• free shipping when purchasing a certain amount;
• the possibility of purchasing goods in installments;
• additional bonuses (3 products for the price of 2, etc.).

There are a lot of options, the main thing is that they are economically feasible for you. If a buyer asks for an unrealistic discount, don't be afraid to turn him down. At the same time, justify your refusal, say that such conditions are simply unprofitable for you. And offer an alternative.

ADVICE: Examples of successful negotiations demonstrate the relevance of comparisons when voicing prices. “This book costs the same as 10 cups of coffee,” “A monthly car payment is equal to three dinners at a restaurant,” etc.

The main thing is not to start the conversation with cost. First, introduce the buyer to the product (or general assortment), list its advantages, and then politely but confidently announce the price. Confidence is an important point. If the client sees that you are hesitating, he will definitely start bargaining. Pronounce the number as confidently as you pronounce your name. When bargaining, if it does take place, use what was said at the beginning of this paragraph. But don’t rush to make the discount itself if the client talks about “how expensive it is.” He may just be waiting for you to recount to him why the item is worth what you want for it.

1. Do not despair, if a person refuses to purchase. Perhaps he just needs to wait until payday or find out the conditions and prices of your competitors (especially important for wholesale clients). Leave your contact information and politely say that if anything happens you will always be happy to cooperate.

Difficult client - who is he?

Yes, there is such a separate category of buyers. Many people don’t like them, but these are the people who help sellers understand the weaknesses of their business. They represent a challenge to be accepted and an obstacle to be overcome. Moreover, these clients themselves are divided into:

• rude people;

When communicating with such people, the main thing is not to succumb to provocations. Stay calm and confident. Rudeness means the absence of other arguments, and when a person realizes that shouting and accusations will not get through you, he will retreat on his own. And all his negativity will remain with him. Or perhaps these are just emotions that need to be allowed to spill out. If a person is dissatisfied with the price or appearance of the product, agree with him, using speech patterns like “Yes, you are certainly right, but let me clarify...”. And then, despite your emotions, try to help him.

• shy and indecisive people;

Such a person, as a rule, is not confident in himself and in his choice. He is haunted by doubts that you need to level out. Maintain it, expand it, or, on the contrary, narrow the list of options for purchase. Here it is doubly important to emphasize all the advantages of the product. If a person wants to consult with his wife or boss, offer your help in this matter.

• "smart guys"

The client wants to demonstrate that he knows your product better than you do. Well, in this case you can play his game. Show how much you admire his competence, do not use harsh objections if he criticizes the product, but only offer alternative arguments. The main thing here is to find a compromise. And a healthy discussion always benefits both sides.

How to negotiate on the phone?

First, let’s clarify that any serious transaction requires a personal meeting. Successful telephone conversations are only one of the stages of cooperation. But this stage is also very important. Let's talk about him.

The client calls first

This already means that he has an issue that needs to be resolved. The person found your contacts, dialed the number, and waited for an answer. Here your task is to greet him politely, introduce yourself, and find out about the problem. This will give a boost to a certain amount of trust when the client understands that there is also a real person on the other end of the line, and a robot manager. Don't disappoint his expectations. But at the same time, give the opportunity to be convinced of your professionalism, since the caller is not always an expert in the field of goods or services for which he actually called you. Having learned about his preferences, clearly and concisely voice them in your own words and give the client the opportunity to agree with you. And then make an offer and arrange a meeting.

You call first

In this case, the first priority is to find out whether the person has time to talk. If not, ask when you can call back, since at the moment the busy interlocutor, if he does not hang up, is unlikely to pay enough attention to your proposal.

The rest of the client communication script looks standard:

• Introduce yourself;
• Find out about the needs of your interlocutor, clarify them if necessary;
• Making an offer;
• You make an appointment.

Individual nuances are selected for each specific area.

If your product or service is intended for business representatives rather than corporate clients, find out from your interlocutor who in the company is authorized to respond to proposals similar to yours and contact this person. And then follow the established pattern: defining the problem - your solution to it - pricing issues - confirmation of interest. And use the necessary marketing techniques - provide information about discounts and other favorable conditions.

In practice, conducting such telephone conversations looks like this (example):

– Good afternoon, my name is ..., I am a representative of the company ..., we sell stationery. Do you have time to talk?
- Yes, I’m listening to you.
– Tell me, do you use forms to print tax documents?
- Yes, we use it.
– So, is it important for you to purchase such documents?
- Yes, that’s right, what do you want to offer?
– Our company will be interested in cooperation in supplying such forms for you. We are ready to discuss individual pricing policies and terms of cooperation.

Then the conversation will go on its own if the person is really interested in your proposal. In case of refusal, try to find out the reason and offer an alternative option for cooperation. Don’t be shy to ask questions and encourage your interlocutor to provide feedback. This is the only way you can build a constructive dialogue.

Negotiations with suppliers are carried out in order to improve existing terms of cooperation, conduct bonuses and marketing promotions, etc.

We come to the next functional responsibility of a category manager - negotiation activity aimed at improving the terms of the cooperation agreement. Of course, it is better to achieve the given goals at the initial stage of negotiations, before starting to work together, but, firstly, this does not always work out, and secondly, there is no limit to perfection. Let's go through the points of what you should talk about with the supplier if you are already cooperating.

1. Certainly, increasing the deferment on payments or transferring to a different payment system. At the initial stages of cooperation, the supplier may ask for the first time to arrange delivery on condition of prepayment. If you agree, then before the next order you need to talk about payment on a deferred basis, or at least 50% - prepayment, 50% - deferred payment, then, from the third order, it is quite reasonable to talk about switching to a full deferred payment. If you have a deferment in the payment procedure for this supplier, then you can talk about payment on sale or a trade credit. What arguments should be used when conducting such negotiations? Firstly, this is, of course, huge competition among suppliers and manufacturers. Do not be afraid to use in your negotiations references to another supplier who is ready to work on your terms. Secondly, it is worth emphasizing the desire and plans to further cooperate with this particular supplier. Thirdly, every supplier or manufacturer is interested in expanding the product range, so we can safely talk about introducing several new positions with the subsequent possibility of rotation taking into account changes in the payment procedure. If you feel that your opponent cannot resolve this issue, suggest a pause in the negotiations and set a new date for the call.
2. Rotation. A necessary item in the work of every trading company, especially if you have introduced new positions or groups. Of course, it is better before the start of cooperation, but if this has not been achieved, then it will happen now. Then, when you start introducing a new assortment, your managers may not guess what exactly will become an illiquid product. When introducing a new line, the manager is really guessing, despite the ABC supplier providing analysis using its own matrix. The reason for this is general data for analysis; for you, if you do not work throughout the country, ABC analysis will be approximate, but not accurate. Sales of a particular item vary sharply depending on the region. Our goal is simple - to return illiquid goods. What to operate with? Of course, new orders and expansion of the product matrix for this supplier. Let us repeat, the product prepared for rotation must be in a presentation-ready package - your supplier will have to sell it to other companies, but no one is interested in incurring losses by taking the product of inadequate quality and burying it in its own warehouse.
3. Procedure for dealing with marriage. Another point for negotiation is that there are too many defects, so it is necessary to increase the write-off ratio or introduce a complete write-off. Very often, the percentage of defective goods increases precisely because of the inaction of the supplier or manufacturer. For example, packaging. Not properly packaged goods, poor individual packaging, refusal to ship on pallets - all this leads to defects, which must be discussed with the supplier.
4. Delivery. If, according to the terms of cooperation with the supplier, you must pick up the goods yourself (pickup), it is never too late to talk about compensation, full or partial, for transportation costs or organizing delivery. This is especially true when exporting goods from Moscow, because entry is very difficult and entails additional costs.
5. Exclusive. Of course, it is only interesting for a company to present its selling line of products, to be the only representative, for example, in the region. Do you need an exclusive right to present a particular product line? Undoubtedly, it is your company that the client will come to buy this product, at the same time making a larger purchase. However, the product must actually sell. What to operate with? An increase in trade turnover between companies, otherwise how to increase trade turnover if the products are represented in every trading company, which quite possibly will lower prices, trying to squeeze out competitors by dumping. This is of no interest to anyone, because... In the end, the supplier/manufacturer will end up at the extreme when trading companies refuse their goods, because the markup may fall below the profitability threshold, and they will find alternative products. Therefore, we agree on this as well.
6. Price reduction/additional discount. How to argue? High degree of competition among suppliers and manufacturers. It is important to have two or three suppliers of one product; no one obliges you to work with them at the same time, and you should not do this, but it is necessary to analyze the proposed price lists and, taking this into account, competently negotiate. And don’t be afraid to announce prices to your supplier’s competitors – your interests come first. The biggest danger in this case is that the person conducting the negotiations has absolutely no knowledge about the market, prices and discounts of the manufacturer, supplier, while during negotiations with the supplier, for example, your manager talks about the need or one of the competitors promising a discount from the manufacturer’s base price list of 30%, although the maximum discount from the manufacturer is, for example, 5%. Trust negotiations only to competent specialists.
7. Promotions for both buyers and sales managers. It's no secret that promotions and bonuses attract buyers. Of course, not a single company will work at a loss and hold uninteresting promotions. But marketing campaigns can be different, including those that are truly beneficial for the client. What arguments to use? Of course, by increasing trade turnover. A successful promotion is one that results in an increase of at least 30%. Consider the promotion offered by the supplier or manufacturer, try to carry it out, if the promotion does not show results, it is better to close it. Promotions for sales managers are also relevant. How it works? The supplier allocates the prize fund for the promotion, information is transferred to the managers of the trading floor and they actively offer these products. This stimulates sellers to increase sales of a certain brand, as a result, an increase in turnover.

Any item from your agreement with the supplier can be discussed with the supplier again. We have listed the most common points for discussion. If interested, send your agreements without details of the parties, of course, to