The Bargaining Power Secrets You Need In Business
In business, there are all types of bargaining power. There is consumer bargaining power as well as bargaining powers of suppliers. Depending on your industry you might have your focus on certain types of bargaining, for example, bargaining power of suppliers in banking industry, bargaining power of suppliers pharmaceutical industry, bargaining power of customers buyers, bargain power of buyers, bargain power of suppliers, and bargaining power of customer, as examples.
In business, bargaining power is the ability of one party to control the resources and benefits of another. Bargaining power is very important to your business success and the more you understand the secrets contained in this article the better negotiator you will be so that you shift negotiations in your favor.
5 Secrets Of Bargaining Power
- Be prepared to listen and deeply tune in to hear what the other party desires. Remain silent and charge neutral and leave your ego and desire to be right at the door.
- Know what you want and have a clear way of expressing it using visual and auditory and tactile means.
- Do not be attached to any outcome other than serving both parties with the highest outcome available.
- Pause and stop and think before you speak. If you need time to sleep on what is discussed, then request that time.
- Be prepared to walk away if your gut tells you that this negotiation is not a win-win.
A Client Example Of Increased Bargaining Power
My client owns a bakery and first went to speak to a supplier with a large customer base. My client was new in business and the supplier had a very established business. The supplier would not negotiate a reduced fee for this start-up business. I helped my client family member to find another supplier who had a smaller customer base and this supplier was happy to negotiate. My client didn’t have enough bargaining power with the supplier who had a lot of customers yet the supplier with fewer customers was thrilled to receive a new client and negotiated with her right away.
Whenever I am asked for bargaining power of suppliers examples, I share this story. I believe this story illustrates the definition of bargaining power of suppliers. If the supplier group is small and concentrated in an industry they have the extra bargaining power. Some of my franchise clients have found that the vendors supplying their franchise offer lower prices, or faster delivery or flexible credit terms and this is how they stand out from the crowd and get contracts with the franchise.