In negotiations, achieving a win-win often involves rule adjustments, not to deceive the other party but to enhance value for both sides. Let’s explore a couple of strategies that can transform the negotiation landscape.

Quantity Discounts and Bundling:

Boosting value in negotiations is frequently tied to increasing volume, and many goods and services are incredibly volume-sensitive. Buyers can bundle multiple projects, bids, or contracts together or include related goods and services in the pricing. However, maintaining comparability between bids can be challenging. For instance, when bidding on human resources services, different suppliers may offer varied extras, such as managing job postings and providing compensation reviews or adding candidate diversity screening. To ensure a fair comparison, buyers may need to request separate pricing with discounts for bundled services, allowing them to craft the optimal package.

Surprisingly, many conglomerates with diverse businesses overlook aggregating their spend. Despite offering different goods and services, businesses under a single umbrella  share common needs like travel, office supplies, and benefits. Collaborating across businesses or departments amplifies volumes without increasing the overall expenditure.

Long-term Commitments:

Another effective rule-changer is extending a better partnership to suppliers through longer-term commitments. A lengthier commitment reduces the supplier’s risk by securing a stable portion of their business. Sales and marketing demand resources, and with a set relationship for a known period, suppliers save on these resources. Opting for a three or five-year contract instead of a short-term commitment decreases risk for both parties, subsequently reducing costs.

Stay tuned for the next article, where we’ll delve into performance-based pricing and non-price terms for negotiations.