Negotiating indirect purchases: Winning techniques

Negotiating indirect procurement is a complex process that requires a strategic approach and effective management. Indirect purchases include all expenses made by a business for goods and services that are not directly related to the production or sale of its final products or services. These purchases include categories such as office supplies, IT services, general services, logistics, services, etc.

Have you ever said to yourself “I'm not going to negotiate this purchase, it's a waste of time”?

You are not the only one in this situation. Indeed, when they do the management of indirect purchases, every day, buyers place orders for small amounts at the list price, without negotiating them.

Many of these same buyers reserve their time to negotiate major purchases or more strategic activities.

Focusing on activities with a better return on investment (ROI) is indeed consistent. But ignoring easy opportunities with better management of indirect procurement, which you could add to your total savings, isn't always smart.

Negotiation Strategy for Indirect Purchases: Keys to Success to Optimize Costs and Performance

To successfully negotiate indirect purchases, it is essential to put in place a clear and effective purchasing strategy. This strategy must take into account the needs of the company, the criteria for evaluating suppliers, the objectives of cost reduction, as well as logistical and operational constraints. It is important to start by analyzing current business expenses and identifying opportunities for optimization. A good knowledge of the indirect procurement category and its competitive environment is also necessary. This will allow buyers to set realistic negotiation goals and select appropriate suppliers.

Managing Negotiations for Indirect Purchases: Supplier Assessment, Transparency and Professionalism

The first step in negotiation is to look for alternative sources of supply and to assess the performance of current suppliers. It is crucial to establish a solid relationship with potential suppliers, with a focus on transparency and the exchange of information. The buyer must also be able to provide solid arguments to justify their requests for price reduction or better payment terms. The negotiation itself must be conducted in a professional and respectful manner; the buyer must be able to defend the interests of the company while maintaining a relationship of trust with the supplier. Negotiation can cover several aspects, such as prices, delivery times, quantities, payment terms, guarantees, etc.

Optimizing Negotiation with Supplier Performance Tools and Monitoring: Keys to a Successful Relationship

Using tools such as tenders or supplier panels can facilitate the negotiation process by comparing offers from different suppliers. Once the negotiation is concluded, it is crucial to set up regular monitoring of suppliers' performance. This ensures that the negotiated conditions are respected and that the quality of the goods or services provided is in line with the expectations of the company. Careful supplier relationship management is essential to maintain a long-term win-win relationship.

Have you already been paid 1500 euros per hour or more?

Let's take an example: If you could earn 50 euros every time you spent two minutes of your time, would you? If not, then consider that the return on investment of the time invested will be equivalent to a rate of 1500 euros per hour.

So using these two minutes will save money. And that will produce a positive ROI (return on investment) for your employer.

Of course, you need to reach your highest goals first.

However, optimizing purchases during major negotiations requires a lot of preparation time. Indeed, negotiations related to the management of indirect purchases Sometimes you just need to ask simple questions. These will result in savings.

Here are some examples of questions to suppliers to quickly obtain small savings that are significant in the long term.

1. How flexible are your prices?
2. This is not the first time we order from you. What discounts/discounts are available for our business?
3. What is the lowest price you can offer for this product/service?

We don't count the number of times we got a response like “I can give you a 10% discount.” Thus, in a few seconds, savings were generated in situations where we were too busy to negotiate.

Try one of these questions the next time you're tempted to say that negotiating small purchases isn't helpful. Also, if you have internal customers who place their own low value orders. Also, since they're not professional negotiators, share these questions with them to help them save money.

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Strategy and Professionalism in Indirect Procurement Negotiations: Towards Optimized Supply Chain Performance

Negotiating indirect purchases requires a strategic approach and professional management. Buyers should be able to set up an effective purchasing strategy, seek alternative sources of supply, negotiate professionally, and monitor supplier performance on a regular basis. Successful indirect procurement negotiations contribute to the reduction of costs, the optimization of the supply chain and the improvement of the overall performance of the company.