Negotiation skills

Develop proposals
1st proposal: to accept the increase of the
7%.
2nd proposal: to accept 3.5 % of the price
increase
3rd proposal: don't accept the 7 %increase
in the price.
1 s t p r op o sa l: t o a cce p t t he
incr e a se o f t he 7% in p r ic e .

Estimated issues :
it is an essential product that is supplied
with the Best quality in the market along
with limitation of other competition
(monopolistic market ).

It is a complementary product that the 7%

increase wont affect much the price of the
final product.
 Estimated issues :
Establish good business relationship with
the new mgt that will benefit me in the
future.
Economical changes due to
A- rise in taxes ,inflation& exchange rates
B- rules imposed by labor unions to increase
salaries so they are trying to compensate it
with the increase in the price .
Needed information
Whether my segment market will accept
this increase or not .
Can the company afford this increase or
not.
Get more information about the
competitors to be sure that there is no
other substitute supplier.
Is it really an essential product or its a
complementary one .
Needed information
Whether the company is interested to
establish this kind of long term
relationship or not with the new mgt.
Updated with the new issued taxes rules
that is imposed on this industry.
Updated with currency exchange rates if
the supplier is importing some of his
materials.
Needed information
Updated with labor laws rules imposed
on workers on this industry regarding
salary ,incentives and bonuses
increases that could affect the supplier.
Increase in the fuel prices due to
inflation rates which will increase cost
of transportation on the supplier.
Sources of information.
Company afford it or not from mkting &
financial dep.
Get info from central bank ,tax authorities,
Regarding rise in taxes, exchange rates or
general rise in prices due to inflation
rates .
Review labor laws regarding % of in crease
in salaries ..etc.
Sources of information.
Regarding acceptance of my customers , get
trials results from mkting department & know
from the involved parties in the company if they
are interested to establish long term
relationship of this supplier.
Knowing from the production dep. Whether it is
an essential or complementary product & its
prices from purchaser dep.
Get information about the competitors from the
market, internet or commercial chambers.
2 nd proposal: Is to accept 3.5 % of
the price increase in exchange of :
A- free delivery terms.
B- increasing the volume of the order .
C-offering him services in return of 3.5%
discount.
D-the supplier company offers me credit
terms.
 Estimated issues :

The supplier company payment policy is to pay in

cash they dont offer credit terms.
Increase of raw material prices.
New strategy of the supplier according to new
management so they are seeking for new clients'
category that are more profitable
may be it is just a trick from the new mgt to get
higher profit so ill accept a slight increase.
Expansion of the suppliers factory so they need to
offset extra expenditure by the price increase.
 Needed information
Whether my segment market will accept this increase or not .
Can the company afford this increase or not.
Info about raw materials price increase if it is imported or
local made.
Information about the new mgt strategies from old
connections if they are looking for new customers
category ,offering developed products with lower prices
,making mkting campaigns to increase their market share or
to change their segment market or targeting new segments
or they are just bluffing to get extra profit from us.
 Needed information
Cost of transportation in my company & in the suppliers
company ,whether they use their own trucks or they
rent it .
Information about the capacity of production in case of
increasing the volume , whether I have enough storage
area for this extra inventory , whether there is enough
spaces in the stores they offer my product.
Offering services as constructing or equipping part of
the suppliers factory in case of expansion , info how
much these kind of services will cost me & compare
between the prices of these services & the 3.5%
discount which is higher .
Needed information
Comparisons made by finance& accounting
dep between the three alternatives .to
calculate which four will be more profitable
for the company.
Info from all the dep. Involved in choosing
one of the four alternatives.
Availability of the credit terms from the
supplier.
 Sources of information.
All departments involved in evaluating the three
alternatives.
Cost of transportation from trucks rent companies .
Affording the transportation cost from financial dep
or logistics dep.
Getting any Inner information from the supplier
companies about new strategies or transportation
costs . from old employees whom I have good
relationship with.
If the factory is expanding or making new branches I
can know it from commercial register.
 3 rd proposal: don't accept the 7 % increase in the
price.

Estimated issues
its a complementary product where I can buy
from any other supplier.
Our customer wont accept any increase in our

product prices as we dont offer any credit terms.

Our company cant afford the 7% increase as it is

an essential product that is used in huge

quantities & we are suffering from shortage in
liquid money.
They are just bluffing to get extra profit so if I

approve on this increase now they ll do it every

year .
 Needed information
Is it essential or complementary.
Info about other available competitors inside & outside the
country.
Whether the company can offer credit terms to our
customers or not.
Reviewing sales patterns & % of cash flow to solve the
problem of liquidity for example to deal with more suppliers
that offers credit terms.
Whether the company can increase the % of sales by new
mkting campaigns that can overcome any increases in the
raw material prices in the future.
Getting info about the new mgt strategies.
 Sources of information.
Regarding acceptance of my customers , get
trials results from mkting department &
know from them if they are interested to
establish long term relationship of this
supplier.
Knowing from the production dep. Whether it
is an essential or complementary product.
Get information about the competitors from
the market, internet or commercial
chambers.
Sources of information.
complementary or not from production
dep.
Info about competitors from market,
internet ,agencies, commercial chamber
etc.
Availability of credit terms from accounting
& financial department.
Finally all information related to sales from
sales& mkting dep.