The key is to establish your preferred outcome. But remain realistic – if you’re not prepared to compromise, the negotiations won’t get far. You should also consider what offer the supplier is likely to make and how you’ll respond.Although getting the best possible deal in the short-term is important, a good relationship in the future may help you get even cheaper prices or other perks, such as priority delivery. Don’t underestimate the importance of good will

By conducting some basic research into a potential supplier you can work out how valuable your business is to them. Your bargaining power increases in direct proportion to your potential supplier’s need for your business.

If the supplier runs a near monopoly it is likely to have the upper hand because:

However, if the supplier has a number of competitors – or is a new entrant to a particular market – you’ll be in a much stronger position. Also, the supplier may already be offering good deals in a bid to increase its market share.

It’s essential to plan your strategy in writing before beginning negotiations. This will help you set clear goals and work out where you will draw the line and walk away from the deal.

Start by defining what your priorities are, such as low price, high specification goods or a specific delivery schedule.

Think about different offers the supplier could make and what you are willing to concede or compromise on. For example, you may decide that you’ll only pay the full price in exchange for fast turnaround.

Before you start negotiating, state the aspects of the deal you’re happy with and the points you want to discuss. Ask the supplier to do the same.

Make sure both sides are satisfied with what is being negotiated. Get the supplier to restate any discounts offered and payment terms. Keep these key bits of information to hand.

If you have enough bargaining power, insist on using your own terms and conditions of purchase.

Do not indicate that there are things you’re prepared to concede or compromise on too early in the negotiations. Try to give the impression you’re approaching the negotiations positively without revealing your position.