Get Negotiating Vendor Contracts

As part of the procurement cycle, negotiation happens after vendor selection but before signing a contract. While not always the case, ideally, negotiations happen before writing a contract to avoid drawn out rework and redlining.

Negotiating with multiple vendors can give you more leverage and flexibility, as you can use the competition to your advantage. You can ask for better prices, terms, conditions, or value-added services from each vendor, and see who can offer you the best deal.

You may want to negotiate other factors such as delivery times, payment terms or the quality of the goods. Most business owners would view a good deal as one that meets all their requirements. But there are many other factors to consider, such as whether you want to do business with a particular supplier again.

Vendor contracts are typically negotiated at the start of the supplier-retailer relationship and renegotiated as each contract comes to its natural end.

Communicate promptly, treat all points of contact with respect, and represent yourself as the type of client they want to retain. Negotiation is a skill that can benefit business owners every single day, whether they're dealing with vendors or landlords, employees or clients.

Research on the anchoring effect suggests that the party who makes the first offer in a negotiation can gain a powerful advantage by steering talks in her favor. But that doesn't mean that it's always wise to make the first offer, as the anchoring effect could work against you if you choose the wrong anchor.

Negotiating vendor contracts is not only about numbers and terms, but also about people and relationships. You should aim to build rapport and trust with the vendor, by showing respect, empathy, and professionalism. You should also listen actively to their needs and concerns, and acknowledge their value and expertise.

Here are some tips to help you renegotiate vendor contract terms when the situation changes. 1 Assess the impact. ... 2 Communicate early and openly. ... 3 Negotiate with flexibility and creativity. ... 4 Document and implement the changes. ... 5 Maintain the relationship. ... 6 Here's what else to consider.