Negotiating a Purchase

4. Controlling the Negotiation

4.1 Establish negotiating points.

• Try to get the supplier to state a starting price before discussing other points.
• For important purchases, suggest written heads of agreement, setting out the key points of the deal you are proposing.For instance, when buying database software, detail what you want from the supplier, eg functional requirements, installation procedures and training for your staff. Set out the timescales involved.

4.2 Work with the right information.

• Get the seller to restate the spec in the offer to supply and include specific details of discounts and payment terms.
• If you have enough power in relation to the supplier, insist on your own terms and conditions of purchase (see 8).
• During negotiations, keep key facts and figures from competitors' quotes to hand.
• Keep a suppliers file, containing all the information you hold on them. Log any problems you have had in the past.

4.3 Do not reveal your negotiating position.

• Answers like 'We are keen to do the deal' give the other side no useful information, sound positive and allow you to go on asking questions yourself.

4.4 Confirm understanding each time a key point is agreed.

• Summarise the state of negotiations before and after each meeting.
• Ask for a break if you need time to think before agreeing a point.

4.5 Be aware of common negotiating tactics.

• If the seller keeps referring to urgent deadlines or abruptly raises the emotional temperature, there may be some gamesmanship involved.