Procurement negotiation is not just about lowering prices but about securing the best overall value for an organization while maintaining strong supplier relationships. This was clearly explained during a recent discussion on Mwelekeo TV featuring Kevin Waswa, who has over ten years of experience in procurement and supply chain management.
The discussion highlights that negotiation is a strategic process that goes beyond simple price bargaining. It involves agreeing on quality standards, delivery timelines, cost structures, and how risks are shared between both parties.
Kevin emphasizes that focusing only on the unit price can be misleading. Instead, procurement professionals should consider the total cost, including storage, inventory, logistics, and even the supplier’s sustainability.
This view helps create deals that benefit both sides over time. Preparation is presented as the most important stage of negotiation.
According to Kevin, negotiation begins long before any meeting with a supplier. It starts when planning the purchase itself, including defining needs, quantities, and expected pricing. Research plays a key role at this stage. Buyers must understand market trends, evaluate supplier reliability, and identify alternative sources. This level of preparation ensures that decisions made during negotiation are informed and strategic.
To guide this preparation, Kevin introduces a simple framework known as PATCH. This approach focuses on planning requirements clearly, identifying alternatives, considering possible trade-offs, and understanding the people involved in the negotiation.
He explains that proper preparation builds confidence and reduces the risk of accepting weak deals.
The discussion also addresses common mistakes in procurement negotiation. One major issue is entering discussions without enough information.
Poor communication is another problem, especially when buyers talk too much instead of listening carefully.
Kevin advises that silence can sometimes be a powerful tool, allowing suppliers to reveal more information. He also stresses the importance of knowing when to walk away from a deal that does not meet expectations. At the same time, procurement professionals must follow legal and ethical guidelines, including Article 227 of Kenya’s procurement laws, which promote fairness, transparency, and accountability.
When it comes to practical techniques, Kevin suggests using open-ended questions to encourage suppliers to provide more details. For example, asking about discounts based on higher volumes can open room for better terms.
He also recommends structuring concessions carefully rather than giving in too quickly.
Another important concept he explains is BATNA, meaning the Best Alternative to a Negotiated Agreement. Knowing your BATNA helps you stay firm and avoid accepting unfavorable terms.
Handling difficult suppliers is another key topic. Some suppliers may act aggressively or behave as if they have no competition. In such situations, Kevin advises staying calm and using emotional intelligence.
He shares an example from his experience at Silver Spark African Safaris, where he successfully negotiated vehicle costs down by several million shillings by focusing on total value instead of just the initial price.
Communication skills are also essential. Active listening, asking the right questions, and observing body language help build trust. Kevin notes that strong relationships with suppliers often lead to better service and long-term benefits.
