Negotiation: Not About Lowering Price

By Rich Weissman

June 06, 2012 at 12:28 PM

When do you negotiate? Why, always!

That was the message I gave today to a very nice group of procurement professionals attending the NAEB-NE Buyer’s Forum at Holy Cross in Worcester, Massachusetts. This was a group of educational buyers who are challenged on a daily basis to balance budget constraints, sourcing, and internal and external relationships. While I do not purchase for my college, I do understand the intense pressures they are under. Heck…I create some of that pressure for our procurement organization and I know better!

Be it manufacturing, education, not for profits or the service sector, the fundamentals of negotiation are the same. It is not about lowering prices but increasing supplier performance. That message does not resonate in many organizations that are slaves to a bottom-line budget number. But improving overall supplier performance will result in long term cost reductions, service level increases, reduced risk and happier customers. Often, happier customers are willing to pay a bit more for the service that they receive, and that service is a byproduct of excellent supplier performance. A high performing supply base directly contributes to increased customer satisfaction. And that may result in higher margins.

Everyone has their personalized negotiating style and I’ve certainly honed one over the years. I call it being a ‘sophisticated customer’. For the most part, but quite honestly not always, it has worked for me. It includes:

  • Thoroughly understanding my business
  • Thoroughly understanding my supplier’s business
  • Follow-up and follow-through
  • Anticipation
  • Comprehensive communication

Too many people look at negotiation as a hard bargaining process popular with car dealers and labor unions. If you look at negotiation in the big picture, with ongoing give and take with trustworthy and high performing suppliers, it can be an enjoyable experience where both sides do well. 



Tags: Strategic sourcing Supplier management Negotiation Procurement
Category: Blog Post

Rich Weissman

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Endicott College Assistant Professor Rich Weissman teaches management courses for the School of Business and the Van Loan Graduate School. He is also the director of corporate education, which includes the Center for Leadership, Endicott’s management development institute. He is vice chair of the planning committee and also serves on the technology committee and the Institution Review Board.  A practitioner turned educator, Weissman has more than 25 years of experience in all facets of procurement and supply chain management. He has held positions with large business units of Fortune 500 companies, medium-sized contract manufacturing companies, small venture-backed Internet startup firms, and third-party procurement, consulting and strategic sourcing firms. 

Rich holds an M.S. in Management from Lesley University and a B.A. in Economics from Rutgers University. He is past president of the Purchasing Management Association of Boston and a recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the association.


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