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Tips for Collaborating on a Sales Contract Negotiation

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January 05, 2022

Tips for Collaborating on a Sales Contract Negotiation

When negotiating a sales contract, it can be tempting to start out with a goal of victory at all costs. It's an understandable instinct. Not long ago, after all, it was common wisdom that dominant attitudes and mannerisms were the keys to getting the most value out of a negotiation. Negotiators were (and are) often taught to speak loudly, to use specific body postures to look larger, or to assume physical positions associated with dominance. 

More recently, though, the value of a collaborative approach to negotiation has become clearer. Here, we'll look at the reasons for using collaborative negotiation, its benefits and dynamics, and how to get dominance-motivated negotiators to see and realize the possibilities of an alternate approach.

When "Winning" Isn't Everything

Negotiating a sales contract with a vendor is the kind of situation where the instincts of a dominance-driven or competitive negotiator will be to achieve the lowest price possible. Going overboard in this regard, however, is generally a bad idea.

Victory in the short term may come at the price of leaving a supplier less motivated to trust or help you in the future. Driving the price too low can also force them to cut costs in ways that aren't immediately obvious at the negotiating table, such as in customer service. If that happens, the overall costs of competitive negotiation can outstrip the benefits.

The Benefits of Collaborative Negotiation

A collaborative approach to negotiation, also known as interest-based negotiation, is about taking a win-win approach instead of treating it as a zero-sum game. It's an exercise in joint problem-solving, where the parties work at providing the best possible deal for everyone. 

This approach cuts against the grain for someone used to having a poker face and concealing their goal. Collaboration is upfront about objectives and value, a kind of openness that can be scary to competitive negotiators to whom it can feel like weakness.

However, collaboration brings concrete benefits: it makes for a fair process that leaves everyone feeling they've gained something of value, while transparency and trust help build long-term relationships. Explained clearly, these benefits should prove attractive to even the most habitually competitive negotiator.

Collaboration and the Sales Contract

Bringing a collaborative approach to the sales contract has some specific implications. The first is that, instead of looking for the lowest possible price, the starting position is simply asking for the terms of a standard deal that will profit both you and the vendor. If the counterparty is looking for an exception, this puts the burden on them to prove that any such exception will likewise benefit everyone.

Secondly: make your contract presentation superb. It should look genuinely attractive to the counterparty and should be drafted with attention to the details that will convince them of its benefits. With the right presentation, the win-win premise of collaborative negotiation becomes a natural endpoint. If any final adjustments need to be made, be sure to convert from PDF to Word to quickly update and print the file.

Your Chamber of Commerce as a Resource

Networking, business directories, and the support and collective knowledge base of your local entrepreneurial community can make a major difference to your bottom line. 

To learn more about how collaborative negotiation can help you, join your local chamber of commerce today.