What are the practices for negotiating a purchase contract?

In the phase of Negotiating a contract, your aim is to get The best purchase contract.

This means an agreement corresponding to the best offer on the market on the various terms.

It's going to concern the price, the warranty, delivery time, payment terms, etc. Often, a first supplier offers the best price, a second the best guarantee, the third the best terms of payment, etc.

You should never approach Negotiating a contract thinking that you will have to sacrifice a good compromise on one point of the contract to get another on the next aspect.

Our advice when negotiating a purchase contract:

1

Summarize the responses obtained to your RFP

First, use your e-sourcing tool or create a dashboard! One or the other will list all the important points and each supplier offer for these points.

2

Identify the best compromise for each term and create the purchase contract

Then write the best expected results for each term on a single page! Do it as if only one supplier had offered them to you.

This document will correspond to what the purchase contract should look like. It will represent the goals to be achieved during your negotiation.

3

Figure out what sacrifices you can accept

Sometimes it's just not possible to get The ideal purchase contract.

So you need to prioritize and prioritize the points!
For example, are you ready to accept a shorter guarantee to get a better price? Can you waive this damage clause if you get the payment terms you want?

The negotiation approach should not be seen as simpler or lighter! Now, it should make it possible to identify the most important terms of the contract.

4

Because at least one of your suppliers will have offered The best offer over at least one term, you can be sure that the market can meet your expectations.

You can therefore approach the supplier that best meets your expectations! Nevertheless, care must be taken not to exceed the ethical limit.

Do not say that you want to obtain this or that condition under the pretext that a competing supplier is able to offer it to you.

On the other hand, if one of your suppliers suggests that your request is not reasonable, simply let them know that you have proof that it is reasonable!

5

Validate the compliance of your contract negotiation with a Checklist

Finally, in each Round of negotiation with suppliers, you need to assess your negotiation based on the essential points of your company's strategy.

The attached tool gives you a concrete example of validation points to be respected before finalizing your agreements.

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