BILATERAL NEGOTIATION…

In our previous post we explained that preparation in advance is crucial to optimize the results of a negotiation. With the proper preparation, good results are guaranteed in most negotiations.

But in some cases, we need bilateral negotiations. While the preparation even though surely needed, is not enough to create competition and assure the best results.

Bilateral negotiation means that there is no alternative supplier, or at least not with better conditions, and consequently we need to agree to do business with the current supplier. It could occur because of single sources in a specific market (technology, logistic, capacity…) or as the final round of multi-lateral negotiations with the preferred supplier after previous rounds with other alternative sources.

The worst-case scenario is when we depend on the supplier but the supplier is not interested in business. This rarely happens, but it puts us in a very weak position. In this case, the specific tactic is to rely on empathy and the personal working relationship, trying to improve the conditions with the argument of partnership. Do not sub estimate the importance of the relationship in a negotiation (if you play your cards properly).

The other scenario is the mutual dependency, when we depend on the supplier but the supplier also depends on us. This occurs often, and the key point here is not to think about our dependency, but about how much they would lose if there is no agreement with us. Thinking in this way, we open the frame of the discussion, and our mind set change from “losers” under stress to “players” with the chance to win.

Once we have this “player” mindset, we just have to play properly our cards.