The best tips for strategic negotiation in business include never underestimating the power of listening. While it can be tempting to become overly talkative during business negotiations, employing good listening skills may be a better strategy. By understanding the other party’s core needs first, this can set the stage for subsequent negotiations based on providing these in exchange for what best suits the business. Persuasion is required in effective strategic negotiation, and creating a compelling offer is easier with a clear understanding of what the other party is hoping to get out of the trade deal.
For example, a trading company that negotiates product prices with a supplier is likely to get a better deal by creating a working relationship than simply asking for the best possible B2B (B2B) cost. Researching the supplier to first find out minimum orders, standard prices and major product lines is crucial to forming a strategic negotiation position. It is likely that the supplier representative will appreciate the company’s understanding of your terms. If the company can demonstrate that it will not take a lot of time from the supplier to explain the ordering policies, but rather that it will be a quick and easy sale, the supplier is more in a position to provide the low prices the company wants. .
A respectful relationship approach created through making the required work as easy as possible for the other party is always better in strategic negotiation. It is also generally best to let the other party make the first offer during the negotiation phase. This allows the first party to have the power to accept the offer or make another suggestion. Usually, it’s not a good idea to make the first offer. In many cases the party that made the first offer is willing to move away from that amount closer to what the other party wants. In most cases, however, both sides will have to compromise to reach an agreement.
Once an agreement is reached, the best strategy is to create a contract for both parties to sign. It may take several draft contracts to satisfy both parties. Once this agreement is reached, this makes the strategic negotiation clear for both sides. A win-win negotiation is achieved if the company receives a good price for the desired products and the supplier has a customer “blocked” to purchase a certain quantity of product.
Author: Kirt Linington
