Jeremy Ferrer
Webinar :
Cross-border Purchases and VAT: Optimization Strategies
Tuesday Sept. 10, 2024 at 11 am (France)
I am often asked ethical questions about negotiating with one or more suppliers after receiving offers. Should we give all suppliers the opportunity to negotiate?
During the analysis phase following the receipt of offers, I create a ranking of the best suppliers (on Excel or my ERP Purchasing).
Whether it is based on price alone or on a combination of quality/price criteria, I use it systematically.
My rule is to never give the opportunity to negotiate with a supplier without giving this same opportunity to all the suppliers that are BETTER placed in my ranking.
Thus, if you have seven suppliers and you want to negotiate with the third in the ranking, you will also have to give the suppliers placed in 1st and 2nd position the opportunity to review their offers.
I don't waste time with suppliers at the bottom of the rankings unless I think they also have a chance of winning the deal. Generally, I dismiss them at the earliest with objective arguments.
If after negotiating with the 3rd supplier I got a better offer and I do not give the suppliers in 1st and 2nd position the opportunity to review their proposals, it will not be An ethical call for tenders.
ATTENTION: The problem with this method is that providers take advantage of it if it is used too regularly. If, from experience, they know that they do not have to offer their best offer because they will have theopportunity to negotiate later, The negotiation process will become more complex and less effective.
You should also assess yourself and ask yourself, “Why am I negotiating with anyone other than both?” best suppliers ? ”. In some cases, this may be due to internal policy pressure to keep the current provider.
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