The Art of Win-Win Negotiations

Most people see negotiation as a game in which the gains of one come at the expense of another. Winning means getting six pieces from a 10-piece pie. But negotiation has the potential to be a win-win process by which both parties cooperate to create a bigger, better-tasting pie. The basic principle of win-win negotiating is that there is always a bigger, better deal. Only after searching and finding that deal do they worry about how to share it. These avenues might be explored in a typical purchasing contract negotiation:

Taxes. It’s safe to assume that the parties to a negotiation have different tax needs.  Accountants might be able to point out some unseen opportunities (particularly in foreign transactions).

Payment terms. Some sellers need quick payment; others might prefer a deferred payment (for tax or other reasons). There are many win-win variations.

Specifications. A better deal may be possible if changes can be made to balance the buyer’s end-use requirements against the seller’s specific production capabilities.

Transportation. Transportation costs can often be reduced at no expense to either party. Perhaps the buyer’s empty trucks will pass the seller’s facility. Or maybe the seller has access to low bulk rates.

Delivery date or performance specifications. The reality is this: a buyer’s delivery requirements never represent the seller’s optimum production economics.

Quantity. One of the best win-win strategies I know is to close a price gap by changing quantity.

Processes. In my experience, the surest path to finding a better way to do anything is to study the detailed production and paperwork processes.

Risk and contract type. All business involves risk. Incentives might be used to balance the seller’s risk with potential for earning greater profit.

Like successful entrepreneurs everywhere, win-win negotiators find hidden opportunities in what each could do for the other. Win-win raises the stakes in a negotiation. It raises the level and content of the relationship between the bargainers. It also reduces the tensions inherent in bargaining. There are few phrases that more quickly capture the attention of the other party than, “Let’s find a better deal for both of us.”

Source: Chester L. Karrass, “The Art of Win-Win Negotiations,” Purchasing, May 6, 1999, p. 28.