Negotiating a deal with purchasing

So, you go through a pitch to a large company, then you get a RFP.  Then you bid and pitch again.

Then comes the call from purchasing:  “In the spirit of partnership, would you be willing to discount X%?  We’re also asking all the other candidates as well.”

First thing you ask:  “Will it secure the business”?  Of course they can’t answer that – they are just the purchasing department.

Then you suggest: “Let’s work on this together – if we do 5%, we’d like 50% up front payments (deposit). And if you do 100% up front then we’ll do 10%.”    Then they say it does not work for compliance reasons.

This is how the negotiation process works. The risk is that if there are other vendors in the fray, that you are being too aggressive. However, if the % they request is low, then they are not really trying to save money, they are just trying to get a “win.”  So – it’s not really about the price.

If they have cash on hand, it should be a non-issue other than policy – which the legal team can work around.

Posted on November 10, 2010 in Market

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