A successful negotiation should be done in two parts, the first part is to understand the negotiation process, and the second part is to prepare for the negotiation. The negotiation process includes understanding the definition and purpose of negotiation, when to negotiate, what are the barriers to effective negotiation, the characteristics of a successful negotiator, techniques for facilitating negotiation, and insights in negotiation. Negotiation preparation includes understanding the other party's intentions, establishing your position and that of your opponent, determining where the key issues lie, developing negotiation strategies and tactics, and organizing appropriately. Negotiation is a process whereby both parties reach a mutually satisfactory *** understanding, so a win-win situation becomes the goal of the negotiation.
From the buyer's side the following five factors can lead to negotiations.
(1) At least two suppliers
(2) The seller intends to intervene
(3) There are clear specifications
(4) There is a difference between the bidders
(5) The amount of the purchase is large enough to cover the cost of bidding. Obstacles to Successful Negotiation.
Characteristics of a successful negotiator include the ability to plan, clear and quick thinking, a strong drive to succeed, the ability to take on board the views of others, self-control, understanding of human nature, good listening and so on. But all of these require constant training and practice, as well as the complementary skills of team members.
Skills to drive negotiations. The first is to learn from the past, a summary of the negotiations just completed, where it worked, where it went wrong, where to change, how the other side, which will help in the future. The second is group meetings, which can be used to resolve differences within the negotiating team and to revise strategy and tactics. If it is a one-person negotiation, you can arrange to have someone call you to answer the phone, or tell the other party that time is limited, and reply later.
Preparation for negotiation
It is important to note here that previous contacts with the other party and prospects for future cooperation are important considerations. In addition, without adequate preparation, even if you are very articulate and articulate, you will achieve very little. Here is a list of eight steps to prepare for negotiations.
1. Analyze the other side of the program. Evaluate the price, delivery, specifications, payment and any deviation from your requirements. Remember that the other party's proposal is often in their favor.
2. Establish your goals. Specifically set down your price, quality, service, delivery, specifications, payment and other requirements and write them down on paper, rather than saying to the other party, "you try?" .
3. Set the program. For each problem, you need to decide the best option, the target option, and the worst case scenario, which can help you develop a strategy.
4. Analyze the position of the other party. You can also estimate the likely position of the other side, which is easy to predict their negotiation strategy. At this point you can roughly feel the scale of the negotiation range. 5. Identify and organize the problem. Now you can organize the issues and list the similarities and differences between the parties on each issue. Remember that each point of contention must be supported by reliable information.
6. Plan your strategy and tactics. Three practical strategies are A) Avoid talking about your side's position and first test the other side's point of view. This is often used for the other side is very eager to reach an agreement, and they lack sufficient information. b) directly speak out your ideal program. This is often used when you already know the other side's scenario. c) Speak about your ideal scenario, followed by your target scenario. This is often used when you are in a weak position but have the ability to persuade the other side. The proper use of tactics can lead to the successful implementation of a plan. These tactics include:
1) Ranking questions in order of importance 2) Asking smart questions to get as much information as possible, rather than "yes" or "no" answers 3) Listening effectively 4) Maintaining the initiative 5) Utilizing reliable information 6) Utilizing silence, which can make the other person feel nervous. Silence, which can make the other side feel nervous and further discussion 7) Avoid emotions, which can make the negotiation to the person rather than the matter 8) Use the negotiation gap from the new thinking, avoid to the other side of the constraints 8) Do not worry about saying "no" 9) clear deadlines 10) pay attention to the body language 11) open-minded, do not be expected to be tied up in planning creativity 12) put the negotiation 12) Document the negotiations so that they can be turned into a final contract.
7. Select the negotiating team. Choose a team leader. The other members must be clear about their tasks and support the team leader.
8. Set the agenda for the negotiations. What issues will be discussed, who will discuss them, and the flow of the meeting should be predetermined. Remember that it is always advantageous to have the home base on your side. And to determine whether the negotiating partner has the right to decide, if necessary, you can directly ask the other side of the authority.
The above discussion is a review for expert negotiators and a starting point for novices. The application of the above skills depends on the individual style and the specific situation. Whether you are negotiating formally or informally, the content provided in this article can help you increase the effectiveness of your negotiations.
Negotiating with inexperienced salespeople
To negotiate with an inexperienced salesperson, finding a third-party expert may be an effective approach. When you're negotiating with a salesperson sent by an important supplier, you'll quickly realize that this salesperson not only knows very little about his product, he's also an amateur at professional negotiation, and has no idea what win-win negotiation is. Worst of all, he is not prepared and has no knowledge of your company. If the relationship between your two companies is very good, and if you have a lot of important issues to discuss with him, what should you do? Would you take advantage of his weaknesses to get more? Of course not. Because its management once found that the agreement is not reasonable will also ask to reopen negotiations.
It would not be wise to simply ask the other side to send someone else, and the best way to do that is to face reality. You can product knowledge, industry norms, win-win negotiations and other theories to teach and help him. Specifically, you can start from the following aspects. Quality: based on facts, objectively state the quality standards you want, the salesman will be difficult to argue. Delivery: list the facts of what other suppliers can do, the salesman is difficult to refute. Price: If you have done a price and cost survey, you should also provide sufficient basis. Even if that inexperienced salesman is very emotional, it will be hard for him to disprove the facts.
What if the other side is still very stubborn? Then you can utilize the third-party expert approach. Let the other side know that this is to make the two sides work better together, because the third party can provide feedback in front of both sides after the negotiation. The third party can come from an arbitration body, a trade association, or a mutually recognized organization, or you can have the salesman appoint a professional from his own company to act as the third party. In short, the goal is to have an objective third party involved in the negotiations.
Finally, remember two points: First, blame is meaningless, the salesman will not be blamed and suddenly know the product very well; Second, do not have a sense of emotion and a sense of failure, the salesman is not reasonable, but you must be reasonable. Of course this is easier said than done, but this is the time to show your negotiation wisdom.
How to make the right inquiry (a)
"Request for Quotation (RequestforQuotation)" is the procurement staff in the operational process of a necessary stage. After receiving a requisition, understanding the current inventory status and purchasing budget, the most direct reaction is usually to contact the supplier immediately. If this is a regular purchase and the demand is for standardized parts, there will be no problem for the supplier. However, in the development of new products, for those parts that do not belong to the standard product, the inquiry must pay special attention to whether to provide the supplier with sufficient information to facilitate the quotation operation. In order to avoid future purchasing and suppliers to say their own words, as well as in the quality of the cognitive differences, for the request for quotation should be provided on the preparation of information can not be sloppy. Because a complete and correct RFQ document can help suppliers in the shortest possible time to put forward a correct and effective offer. A complete RFQ document should at least consider including the following main parts.
First, the RFQ item "name" and "material number"
First of all, the RFQ item "name" and "material number" is the name of the item in the RFQ. First of all, the "item name" and "material number" of an RFQ item are the most basic information that should be prepared on the RFQ. The supplier must know how to refer to the product being quoted, which is called
Second, the "quantity" of the RFQ item
Usually the supplier needs to know the buyer's demand when quoting, because the quantity purchased will affect the calculation of the price. Quantity information is usually provided in terms of "annual demand", "quarterly demand" or even "monthly demand"; "different levels of demand quantities "different levels of demand," such as 500K, 1M, 3M, etc.; the approximate "order quantity" for each order; or the "total life cycle demand" for a product. In addition to letting the supplier know the demand and the shape of the purchase, it also allows the supplier to analyze whether its own production capacity can cope with the buyer's demand.
The buyer usually has a common problem when asking for quotes, that is, they are afraid of not getting a good price for a small quantity, so they inflate the demand or purchase quantity. At this point, although the procurement can obtain short-term benefits, even if the price of the volume production, if the real procurement, can not reach the expected number of quotes, the supplier is not to raise prices, or in other areas to reduce the service to customers, or stop the supply, in the end, the loss of more than their own. Therefore, the demand for information should be very real with the supplier to communicate, at the same time, procurement can also come up with market forecasts to convince the supplier, so as to achieve long-term cooperation, the purpose of continuous supply.
Third, the RFQ project "specification"
The specification is a description of the quality of the product purchased tool, should include the most "new version" of the engineering drawings, test specifications, material specifications, samples, color swatches, etc. to help the supplier to quote all the information. The specification is a tool to describe the quality of the product being purchased. The engineering drawings must be current, and if the drawings can only be used for estimating purposes they should be included in the RFQ. For international procurement, if the original engineering drawings are in a language other than English, such as German, French, Japanese, etc., they should also be accompanied by a translation into English, the common international language, and presented in a bilingual form to facilitate communication. If the engineering drawings can be provided using electronic files, it is necessary to ask the supplier about the degree of acceptance, in the provision of attention should be paid to the international ****common file formats such as DWG, IGES, DXF, PRO/E, etc., in order to facilitate the conversion of suppliers to the drawing files. However, in the use of e-mail transmission files at the same time, it is best to also provide a clear drawing in the drawings of the project surface, in order to avoid the transmission of files may occur when the information is lost.
Fourth, the RFQ project "quality" requirements to express the requirements of the RFQ project quality specifications in a number of ways, usually can be presented in the following ways. It is difficult for purchasers to use a single way to fully express the quality requirements for a product or service, and several ways should be used in accordance with the different characteristics of the product or service.
1, brand (BrandorTradeNames): In general, the use of branded products for procurement is the easiest and most convenient, not only to save procurement time, reduce procurement costs, but also to reduce the quality of the inspection procedures, because only need to confirm the product labeling can be. However, the price of branded
products is usually higher, and it is more advantageous to use the branded approach when purchasing small quantities.
2, or the same level of product ("OrEqual"): its meaning refers to products with the ability to achieve the same function, to decide whether to allow the use of a substitute for the same level of product quotations should also be specified in the request for quotations, the confirmation of the use of the same level of product must be used to get the acceptance of the use of the unit.
3, commercial standards (CommercialStandard): commercial standards for the size of the product, materials, chemical composition, manufacturing method, etc., there is a *** through a complete description. For general standard parts such as screws, nuts, electronic components, the use of commercial standards can be eliminated on the quality of the misunderstanding.
4, material and manufacturing method specifications (MaterialorMethod-of-ManufactureSpecification): When the material or manufacturing method has specific requirements, it must be indicated that the applicable standards. If the requirements are specified as DIN European standards, the corresponding CNS or JIS specifications should also be specified.
5, Performance or Function Performance or FunctionSpecification): This type of specification is more commonly used in the procurement of high-tech products and supplier prior involvement (EarlySupplierInvolvement, ESI) in the case. The supplier is only informed of the performance or functionality of the product that needs to be achieved, and the details of how to produce the product to meet the requirements are left to the supplier to resolve.
6, engineering drawings (EngineeringDrawing): engineering drawings are best used to describe the quality of the products needed, its content must be clear in addition to the accuracy of the size tolerance can not be ignored.
7, the market grade (MarketGrade): usually used for commodities such as timber, agricultural products, tobacco, food and other aspects of the quality requirements, due to the market grade can not be very clear delineation of the boundaries of the general public defense, procurement staff will usually be required to have how to identify the purchased product is what belongs to what is often the grade of the ability.
8, samples (Sample): This is a lazy way, the provision of samples of the supplier to understand the buyer's needs have a great deal of help, especially on the color, printing, and the market level of the requirements of the use of the more common.
9, statement of work (StatementOfWork, SOW): mainly used in procurement services such as central security, building cleaning, waste disposal, engineering contracting, etc., a complete statement of work in addition to should be simple and clear, for the quality of work should be achieved should also try to standardize the quantitative approach to the evaluation of its performance. The content of the statement of work must be able to guarantee that the buyer can obtain satisfactory service, and at the same time, it should be able to retain enough flexibility to allow the supplier to play to create the added value of the work.
How to make the right request for quotation (2)
"Request for Quotation (RequestforQuotation)" is a necessary stage in the procurement process. After receiving a requisition, understanding the current inventory status and purchasing budget, the most direct reaction is usually to contact the supplier immediately. If this is a regular purchase and the demand is for standardized parts, there will be no problem for the supplier. However, in the development of new products, for those parts that are not standardized, the inquiry must pay special attention to whether or not to provide suppliers with sufficient information to facilitate their quoting operations. In order to avoid future purchasing and suppliers to say their own words, as well as in the quality of the cognitive differences, for the request for quotation should be provided on the preparation of information can not be sloppy. Because a complete and correct RFQ document can help suppliers in the shortest possible time to put forward a correct and effective offer. A complete RFQ document should at least consider including the following main parts.
Fifth, the RFQ project "offer basis" requirements "offer basis" usually includes the offer of "currency" and "terms of trade". "Domestic trading is relatively simple, usually in RMB transactions, the terms of trade is either "ex-factory price" or "to the factory price (whether the freight is included in another discussion)" to calculate. International trade is more complex, the offer currency suppliers are mostly based on the U.S. dollar as the basis for pricing, as to whether the purchase of local currency pricing, depending on the stability of the exchange rate with the flexibility of the practice.
The usual trade conditions for international trade are Ex-Work (factory delivery), FOB (Free On Board), FAS (Free On Board) or CIF (Carriage Insurance Fee Inward Delivery), etc. Under different conditions, the responsibility of the buyer and seller for the risk is different. Therefore, the seller must bear the risk of loading the ship, but the buyer is responsible for shipping, marine insurance and other costs. Under CIF conditions, the seller must bear the risk of loading the ship, but also bear the freight and insurance costs required to transport the goods to the designated port of destination. Therefore, in the transaction of the same goods, the CIF conditions of the offer is naturally higher than the FOB conditions of the offer, the buyer in the inquiry must be specified.
Sixth, the buyer's "payment terms" about the payment terms, although both buyers and sellers have their own company policy, the buyer wants to pay the later the better. On the contrary, the seller of course, the sooner the better. The buyer is obliged to let the seller know the standard payment terms within the company (in the purchase of molds, there are usually "phased payments", such as 30% deposit, 30% for the first trial, 40% for acceptance), the seller can also make its different requirements in the offer, and the final payment terms need to be agreed upon by the buyer and the seller. When the situation is a buyer's market, where supply exceeds demand in a competitive market, where goods and/or labor are readily available, and where the economic forces of commerce tend to result in prices close to the estimated value of the purchase, the buyer is usually able to demand the seller's cooperation with better payment terms, such as "On Account (O/A)", T/T60 days, or even 90 days. or even 90 days. In a seller's market, where demand exceeds supply by a wide margin, the opposite is true. The seller will generally choose a shorter payment period to require the buyer, such as the choice of "cash on delivery
(CashonDelivery, C.O.D.)" or "payment in advance (T/Tinadvance)". In addition, for the payment terms still need to specify the time to calculate the "payment date", in international trade is usually domestic suppliers are generally shipping date (ShippingDate), invoice date (InvoiceDate) or shipment date (OnBoardDate) to calculate the payment due date. Time. At this time, if the foreign buyer is recognized as the arrival date (ArrivalDate) or even to the factory date (ReceivingDate) for the starting date, there may be a difference of one month in the middle of the time, buyers and sellers can not be careful. Specification is a tool to describe the quality of the purchased product, should include the most "recent version" of the engineering drawings, test specifications, material specifications, samples, color swatches and other information to help the supplier quote. The engineering drawings must be the most recent version, and if the drawings can only be used for estimating purposes they should also be included in the RFQ. For international procurement, if the original engineering drawings are in a language other than English, such as German, French, Japanese, etc., they should also be accompanied by a translation of the international common language, English, in a bilingual (Bilingual) form to facilitate communication. If the engineering drawings can be provided using electronic files, it is necessary to ask the supplier about the degree of acceptance, in the provision of attention should be paid to the international ****common file formats such as DWG, IGES, DXF, PRO/E, etc., in order to facilitate the conversion of suppliers to the drawing files. However, in the use of e-mail transmission files at the same time, it is best to also provide a clear drawing in the drawings of the project surface, in order to avoid the transmission of files may occur when the information is lost.
Seventh, the RFQ project "delivery" requirements
Delivery requirements, including the buyer of the purchased products need time, and how much time the seller needs to prepare samples, the first batch of small quantities of production, and the normal time of the order production time required. Although the supplier can be based on the buyer's requirements to cooperate, but the length of the delivery period is related to the price of the procurement of products, the buyer should be based on the actual need to put forward the requirements, rather than the pursuit of timely delivery (JustinTime, JIT).
Eight, the inquiry project "packaging" requirements
Packaging in the supplier's estimate of the price occupies a large proportion, in addition to the shape of the special or large volume of customer orders, the supplier for the packaging of the use of standard cartons, cartons, and pallets and other packaging materials. Delivery location of the country, city, address and contact phone and fax must be clearly told to the supplier. Domestic sale of the delivery method is often railroad, highway-based, international procurement in the delivery location and delivery method determines the calculation of the price. If the seller is required to CIF offer, regardless of sea or air transportation, transportation costs and insurance premiums are of course borne by the seller. With the distance of the delivery will have different billing methods, unless the buyer specifies the air transport, the supplier is usually based on sea freight quotes, because sea freight is the most economical way of delivery.
X. Inquiry project "after-sales service" and "guarantee period" requirements
In the procurement of some machinery and equipment such as punching machines, plastic injection molding machines, test instruments, semiconductor packaging equipment, etc., the supplier will generally provide the basic After-sales service and guarantee period. If there are special requirements at this time, such as the requirement to extend the warranty period, or change the content of after-sales service, etc., because it involves the procurement of "total cost of ownership (TotalCostofOwnership, TCO)". Negotiations should be centered on cost rather than price cost-based negotiations can produce good agreements. Preparation before the negotiation is the key to victory.