Discover how to handle complicated, high-level business negotiations with vendors. Learn about the Top 3 Strategies to handle negotiations. To know more: https://aavenir.com/3-win-win-strategies-to-negotiate-with-powerful-vendors/

1. 3 Win-Win Strategies to
Negotiate with Powerful
Vendors

2. Challenge
The balance of power has dramatically shifted
from buyers to vendors for many industries.
In some cases, vendors have eliminated their
competitors by driving down costs or developing
disruptive technologies.
In others, fast-growing demand for inputs has
outstripped supply to such a degree that vendors
have been able to charge what they want.
2

3. What are the
strategies to
make right
deals?

4. Strategy #1
This is the easiest approach.
Try to rebalance the power equation and turn a purely commercial
transaction with vendors into a strategic partnership. Companies can
provide new value in two ways:
1. Be a gateway to new markets
2. Reducing the vendor’s risks
4
Annual
Bring New Value to the Vendor

5. Strategy #2
Your next best alternative is to change your pattern of demand. Because
this strategy can have implications for other parts of your organization, it
requires close collaboration with any functions that could be affected. A
company can change its demand patterns in three ways, all of which may
require intensive data collection and analysis:
1. Consolidate purchase orders
2. Rethink purchasing bundles
3. Decrease purchase volume
5
Annual
Change How You Buy

6. Strategy #3
This is a high-risk option, but it can transform a company’s prospects.
This strategy is necessary in industries where price negotiations have
gone so far as to drive most vendors out of business, effectively giving the
survivors a monopoly. Firms have essentially two paths:
1. Bring in a vendor from an adjacent market
2. Vertically integrate to become their own vendor
6
Annual
Create a New Vendor

7. “
In the negotiation process, a procurement
professional should learn to compromise to
the best extent possible.
However, one must know where and which
areas to compromise as it is important to
reach an agreement that will avoid conflict and
misunderstanding.

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