BAD NEGOTIATION RESULTS DUE TO…
During one of the last negotiation trainings one of the participants, we’ll call Mr. Schmit, talked about a case where the supplier was expensive (available target calculation), but he did not have alternative suppliers, and “surprise, surprise” he got nothing from the supplier.
Mr. Schmit explained to us how upset he was after the negotiation with the supplier because there was no price reduction, and also felt that the supplier should not be considered strategic because of lack of cooperation and willingness to reduce the cost.
My answer was clear: the supplier was better prepared than Mr. Schmit in that negotiation.
To be prepared in a negotiation we always need transparency and competition, or at least the notion that competition can arise in the future.
In this case, the supplier knew that there was no alternative, and obviously for them the margin was more important than the long-term relationship or future competition. So why reduce the margin if they could maintain it? Would you lose your margin just to make others happy? Moreover, Mr. Schmit should feel lucky because the supplier did not increase prices, right?
So instead of being upset with the supplier, Mr. Schmit should be upset with himself, congratulating the supplier for their good results and acknowledging that he will be better prepared for the next negotiation.
What do you think?
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