The Negotiator Magazine

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Dear Jack,

Sometimes there is absolutely nothing that you can do. You have no options, they know it and you are stuck. Where that is the case, the best thing is not to obsess over it and spend your energies where you can have the most impact.

That said, however, we often find that if one looks carefully, there are options that can produce leverage for you. These options usually fall into one of two categories. The first involves creating risk for the supplier. The second involves trying to impact their total revenues.

The only reason that a supplier is willing to negotiate in the first place is the risk and fear that they will not get the business. However, in a sole source situation, the supplier believes that you have no choice but to buy from them. Here are some things that you might consider to create some risk for them.

Have you looked globally? In one case a client of mine found a supplier in Argentina at a better price with excellent quality.

Is this really a negotiation with your internal customers? Often it is easier for the end user to stay with a current supplier since it reduces their risk even though it costs the company a lot of money. Can they qualify a new supplier, or can they engineer around it or can they use a not-in-kind solution?

If there are really no other suppliers out there, can you grow a second source?

Start looking for options. Sometimes you hit real pay dirt. Also, remember that it is not always an all or nothing situation. An alternate supplier might be able to provide 10% of your needs. This can be especially helpful if your sole source supplier is not totally sure that your alternate supplier can't do the full job for you.

The second approach involves trying to impact their total revenues. This can work alone or in combination with the creating risk approach. Here it depends on the supplier's total portfolio. If 90% of their revenue comes from their sole source products or services, this will not work. However, if a large portion of their revenue comes from competitive products, then there may be options for you. Are you buying some of their competitive products now? If so could you increase or decrease the amount you spend on those products? If you are not now buying their competitive products could you do so?

I hope this is helpful to you.

Michael Schatzki is a master negotiator whose programs have a 20 year track record of producing bottom line results for his clients. His Negotiation Dynamics® keynotes, breakout sessions and seminars educate and entertain. More than 75% of Mike's programs are for satisfied, repeat customers. To learn more about Mike Schatzki and The Negotiation Dynamics® system you may visit his web site at

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February 2005