Banking

Use these tips to gain leverage in vendor negotiations

Consultants must wrestle with vendors to secure the best deals for their clients. We'll tell you how to use silence as your secret weapon in vendor negotiations, and we'll show you some sources for other tips to help you maintain the upper hand.


Wrestling a good deal from a vendor can resemble a scene from TheDevil and Daniel Webster. Making promises and proposals, offers and counteroffers can be a delicate dance. If you’ve already mastered the creative methods for negotiating contracts for your consulting gigs as offered by Meredith Little, you’ve got a great start.

But bargaining with vendors can be a whole different ball game. Here, we’ve gathered some Web resources to help you bone up on your negotiation skills.

Mum’s the word
In an article titled “Hold on to these negotiation truths” on Computerworld.com, Joe Auer, president of International Computer Negotiations, Inc., offers a list of ways to maintain muscle when bargaining. He writes, “The best advice is to never give away your negotiating power before negotiations.” Among his list of things “never to tell a vendor” are:
  • How much you're willing to spend or what your budget is.
  • That you love the product.
  • Who the competitors are.
  • Exactly how much you plan to buy.
  • That the price is reasonable.

Silence is golden
Negotiate This!, a consulting firm that advises individuals and small businesses in negotiations, offers on its Web site a negotiation tip of the month.

This month’s tip is “Silence is Golden.” A tactic often used by Japanese negotiators, the trick is to remain silent—although it is uncomfortable—until your opponent speaks. Often the first to speak is the next to concede a point.

The site also offers advice on how to protect yourself from the good cop/bad cop routine. You can also turn the tables and use this tactic yourself by getting a coworker to help you pull it off. It works just like you’ve seen on TV, although in vendor negotiations it should, of course, be subtler. One person is the cordial, friendly cop; the other is hostile, demanding, and will often leave the discussion in a huff. The good cop is then able to use the confidence and trust he or she has gained to request a concession from the other side in the interest of getting things settled—to his or her advantage, of course.

If a vendor tries to sway you with this ploy, the Negotiate This! site suggests that you:
  • Call them on it by indicating that you are aware that they are using this tactic against you.
  • Ask if the good cop has the authority to make any final decision and deal only with him or her.
  • Walk out of the negotiation.
  • Use your own bad guy.
We want to know how you gain leverage when you’re negotiating with vendors for services. What do you discuss? What do you hold back? Do you lead the conversation or wait patiently for the vendor to bring up that subject? What are your best negotiation tactics? Do you find that bargaining with vendors differs from other types of bargaining? Can you share a great negotiation success story? E-mail us and let us know your tips and tricks or post your comments below.

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