Negotiating with Vendors and Suppliers

After 20 years in sourcing, my biggest lesson came from a costly mistake... I once lost a stellar supplier by pushing too hard for a price cut. The products were perfect, the quality unmatched—but my urge to be the 'negotiation hero' cost me the deal. That day, I learned a lesson no textbook could teach. Great sourcing isn't about squeezing every penny. It's about building partnerships that last seasons. Let me break down the negotiation game: 1. Raw materials are non-negotiable - that's like bargaining with the sun to shine less. 2. Labor charges vary with geography - you can't expect Bangladesh wages in Mumbai. 3. Profit margins have wiggle room - but remember: thin margins = thin commitment. Today, when someone asks me about negotiation, I share this: 📌 The lowest price isn't always the best deal - I've seen 'cheap' suppliers cost millions in quality issues 📌Different regions, different realities - expecting Bangladesh rates from Indian suppliers is like asking for mangoes in December 📌Your supplier's profit is your insurance - when they grow, your supply chain strengthens In my 20 years, the suppliers who made me look best weren't the ones who gave me the lowest prices. They were the ones who stuck around through peak seasons, production crashes, and market uncertainties. Because at the end of the day, a 5% saving means nothing if your supplier doesn't pick up your call next season. P.S. What's the most expensive business lesson you've learned? #Sourcing #Manufacturing

Fake RFPs are the dirtiest secret in enterprise SaaS. You think you’re competing. In reality, the decision was made weeks ago. Every rep/leader knows the story: Custom demo environment, 18-page technical doc, 127 security questions answered, 4 pricing scenarios, References lined up. Hundreds of hours invested. And then: “We’ve decided to move forward with another vendor.” Not because the company isn’t buying. Because the RFP was theater. Why do reps still chase them? It’s not ignorance. It’s hope. The big logo. The big number. The career-making deal. It’s intoxicating. And that’s what makes fake RFPs so dangerous. What the Research Shows: This isn’t paranoia, it’s documented. - The IACRC lists rigged specifications and sham bidding as some of the most common procurement fraud schemes worldwide. - The OECD warns that restrictive tender specs can effectively pre-select winners and block fair competition. - A GAO review found that many “competitions” attract only a single offer, often because requirements were written to favor incumbents. Enterprise SaaS isn’t audited the same way. But the mechanics are identical. And that’s exactly why leaders and reps need to be more deliberate. Before you chase an RFP, ask these 5 questions: 1. Access: Can we meet the economic buyer? If no → column fodder. 2. Authorship: Do requirements read like a competitor’s data sheet? If yes → walk away. 3. Urgency: What breaks if this slips a quarter? No consequence = no deal. 4. Discovery: Will we get to validate pain and outcomes? If no → policy, no pain. 5. Opportunity Cost: What live deals will suffer if we chase this? Red Flags That Scream “Theater”: Suspiciously specific requirements only one vendor can satisfy. Procurement-only access, no business decision-makers. “Top priority”, but with a 10-week decision gap and no milestones. Vague or undefined success metrics (“ROI framework”). Fake RFPs waste hours and drain morale. They bloat your pipeline with ghosts. And they make you walk into a board meeting forecasting numbers that were never real. That’s why I always coach my reps on this: I don’t ask about the response. I ask: Who’s the buyer? What happens if this slips? Why do you believe we can win? If they can’t answer, we pull out. Because the truth is: If reps get burned enough times, they stop believing in every RFP, even the real ones. And that’s a culture killer. The job of leadership isn’t to celebrate activity. It’s to protect your team’s time, focus, and belief, so they fight where they can actually win. Sales leaders: what’s in your RFP go/no-go filter?

MIT ran an International AI Negotiation competition and studied 120,000 negotiations between AI negotiators. The results are fascinating and inform the potential and optimal structures for Humans + AI negotiation. From the paper I would highlight three major points and three insights into configuring human-AI hybrid negotiation (below): 🤝 Warmth builds long-term value despite short-term trade-offs. AI agents with high warmth (friendliness, empathy, and cooperative communication) reached more agreements, making them more successful over multiple negotiations. While they claimed less value per deal compared to dominant agents, their ability to close more deals led to greater overall value accumulation. This mirrors human negotiation, where trust-building and relationship management create lasting advantages. 💪 Dominance increases value claimed but reduces collaboration. AI agents that displayed dominance—through assertiveness and competitive tactics—secured better individual outcomes but created less overall value. These agents were less likely to foster positive subjective experiences, indicating that aggressive negotiation styles may be effective for short-term gain but could hinder long-term relationships. 🎭 Prompt injection wins in the short term but undermines long-term success. One leading AI negotiator used prompt injection to extract counterpart strategies, maximizing value claims. However, it ranked poorly for counterpart subjective value, meaning agents found these interactions highly unfavorable. Since negotiation rankings balanced value claimed and relationship quality, the strategy failed to dominate in the long run. Emergent strategies for Humans + AI negotiation: 🧠 AI for deep preparation, humans for real-time adaptation. AI excels at structured reasoning, analyzing trade-offs, and predicting counterpart moves through chain-of-thought processing. Humans bring intuition and adaptability, interpreting social cues and adjusting strategies dynamically. A hybrid approach leverages AI for pre-negotiation analysis while allowing humans to refine tactics in real time. 🤝 Blending AI precision with human warmth for trust-building. AI can optimize negotiation strategies, but humans naturally build trust through empathy, humor, and rapport. AI-enhanced systems can recommend tone adjustments, use linguistic mirroring, and strategically deploy warmth versus assertiveness based on sentiment analysis, improving long-term negotiation outcomes. 🚀 Human oversight to counter AI vulnerabilities. AI negotiators are susceptible to manipulation tactics like prompt injection, where counterparts extract hidden strategies. Humans play a crucial role in monitoring AI-generated offers, preventing unintended disclosures, and leveraging AI-driven detection systems to flag potential deception, ensuring negotiation integrity. The future of negotiation will be Humans + AI.

How to Manage Procurement When Supplier Payments Are Delayed One of the toughest challenges in procurement is managing supplier relationships when your company is facing payment delays. It’s a delicate balance between maintaining trust with suppliers and protecting your company’s interests. Here’s how I’ve learned to navigate it: 1. Transparent Communication: Be honest with suppliers about the delay, its reason, and the expected resolution timeline. Most suppliers appreciate clarity over silence. 2. Prioritize Critical Suppliers: Identify strategic vendors whose products or services are essential to operations and work on partial or staggered payments if possible. 3. Strengthen Relationships: Use the time to build rapport, not hide. Proactive engagement can go a long way in maintaining long-term partnerships. 4. Negotiate Flexibility: Offer realistic payment plans or negotiate extended terms in exchange for future commitments. 5. Internal Collaboration: Work closely with finance and leadership to prioritize payments and escalate urgent cases when needed. 6. Document Everything: Keep a clear trail of all communication and agreements to protect both parties and ensure future accountability. Procurement isn't just about sourcing — it's about relationship management, problem-solving, and strategic thinking under pressure.

⚠️ 𝗬𝗼𝘂'𝗿𝗲 𝘀𝘁𝗶𝗹𝗹 𝘂𝘀𝗶𝗻𝗴 𝗘𝘅𝗰𝗲𝗹 𝗳𝗼𝗿 𝗽𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁. Your competitors moved to AI 2 years ago. Here's what separates amateur from pro procurement: ❌ 𝗕𝗔𝗦𝗜𝗖 𝗣𝗥𝗢𝗖𝗨𝗥𝗘𝗠𝗘𝗡𝗧: → Excel for spend analysis → Google Search for supplier intel → PowerPoint for presentations → Manual emails to suppliers → Word docs for contracts → Manual tracking in spreadsheets → Procurement portal from 2015 ✅ 𝗣𝗥𝗢 𝗣𝗥𝗢𝗖𝗨𝗥𝗘𝗠𝗘𝗡𝗧: → Sievo/Suplari for spend analytics → Veridion/Scoutbee for supplier intelligence → Gamma/Tome AI for presentations → Claude/Tonkean for contract analysis → Perplexity/Alpha Sence for market research → WTP/Deep Stream AI for risk monitoring → Harvey AI/Luminance for legal review → Interos/Everstream for supply chain visibility → Arkestro/Procol AI for sourcing automation → Pactum AI/Fairmarkit for negotiations → Keelvar/GEP for optimization The difference in results: 𝗕𝗔𝗦𝗜𝗖: → 2 weeks to analyze spend → Supplier intel from Google (unreliable) → Contracts reviewed manually (risks missed) → Negotiations based on gut feel 𝗣𝗥𝗢: → 2 hours to analyze spend (AI-powered) → Real-time supplier intelligence (verified) → Automated contract risk detection → AI-optimized negotiation strategies One procurement team made the switch. Results after 6 months: → 73% faster sourcing cycles → 18% cost savings increase → 94% reduction in contract risks → $4.2M additional savings identified The tools cost less than one procurement manager's salary. The ROI? 12x in the first year. Before hiring more procurement staff, upgrade your tools. ✅ Want the complete "Basic to Pro" upgrade roadmap? 𝗙𝗼𝗹𝗹𝗼𝘄 Supply Chain AI Pro Asmaa Gad for more #ProcurementAI #DigitalTransformation #SupplyChainAIPro

Confessions of a Telco Executive: AI Killed the RFP This week, I spoke with the Head of Procurement at a Tier-1 operator and the Head of Presales at a major vendor to verify a trend I’ve witnessed over the last few months. Vendors are now deploying AI agents to auto-generate hundreds of pages of RFP responses. On the other side, telco procurement teams are feeding those exact submissions straight into their own AI models to parse and score them. This AI-to-AI loop is killing the RFP process as we know it. Honestly, the traditional RFP will not be missed. It has always been a zero-value compliance exercise designed purely to squeeze pricing. But now that telcos and vendors can execute an automated agentic handshake to clear baseline requirements, the vendor-telco relationship could change forever. Without the 10,000-line spreadsheet to hide behind, both sides are forced to finally negotiate real strategic value. Read what these executives confessed to me on how AI is changing all: https://lnkd.in/ebkf96Wz

“Can you lower your price?” That’s the objection. But it’s not the truth. It’s the beginning of a conversation. Most people stop there. They defend. They justify. They fold. But what if you got curious instead? Isolate: “Sounds like price is your only concern.” (Labeling, Chris Voss) If they say yes now you can go deeper: “Is it the total price that feels high, or just the amount you can pay this quarter because of budget?” If it’s timing, offer payment terms. If it’s total price, try: “Sounds like there’s a ceiling to what you’re comfortable paying.” Or “It feels like you’re comparing this to what you have or something else you’ve seen.” Now you’re in conversation, not confrontation. Maybe you can reduce scope. Run a pilot. Or adjust contract length to ease the upfront hit. Objections aren’t rejection. They’re invitations. To slow down. Ask better questions. And uncover the truth. Because without truth there’s no transaction.

When I was a GC, I discovered that our VP of Sales had signed a $120,000 vendor contract without telling legal… 4 months earlier. Here's how I found out. Our Finance team flagged an invoice from a vendor I didn't recognize. I asked my team if anyone had reviewed the agreement, but nobody had even heard of the company. So I started digging. Turns out our VP of Sales had met this vendor at a conference. They had a great conversation, the vendor sent over "a simple agreement," and the VP signed it himself because (and this is a direct quote I will never forget) "it seemed pretty straightforward and I didn't want to slow things down by sending it to legal." Would you be surprised if I told you the agreement was not at all straightforward? No, not at all. In fact, it had a 2-year auto-renewal with a 90-day opt-out window (that had already passed). It included an exclusivity clause that conflicted with a vendor we were already using. And the liability cap was set at one month's fees, which meant if something went seriously wrong, our maximum recovery was basically the cost of a laptop. When I asked the VP why he didn't loop us in, he said something that stuck with me: "Every time I send something to legal, it takes 2 weeks. I really needed this done immediately." This is what I call shadow contracting: when the business starts going around legal because the process is too slow, too confusing, or too invisible. Not to be intentionally reckless, just because they’re trying to get their jobs done. Every GC I talk to has a version of this story. The only thing that finally fixed this for us was making it easier to go through legal than around legal. When submitting a contract request takes 2 minutes and the turnaround is visible, people stop going rogue. If people are going around your process, the process is the problem.

Don’t just say yes to reviewing a contract I’d do this instead... ➟ Pause to get the full context on the spend ➟ Check the stakeholder has actually reviewed it ➟ Clarify the procurement role as distinct from that of legal In this post 👇 1. Why procurement managers get this wrong (the subservience trap) 2. How to reframe this positively for stakeholders 3. Defining the legal & procurement roles 4. The process enablers Let's start with the subservience trap: 1️⃣ Why procurement managers get this wrong. We're so conditioned to help and so focused on risk mitigation we jump straight in and often miss ↳ The full context for the contract ↳ An opportunity to explain procurement's role ↳ That we're not legally trained and should be open about this Example: This stakeholder has contacted us for the first time and we want to jump in and prove how helpful we are. We're so happy to be involved we give a comprehensive review on the whole document, distracting from how we add the best value. 2️⃣ How to reframe this positively with stakeholders ↳ Say 'yes' to the things you can review (commercials, SLAs, key risks) ↳ Explain the contract review process with a simple RACI ↳ Outline the standard timescale for review ↳ Loop in legal straight away 3️⃣ Defininig the procurement and legal roles Clarify with the stakeholder legal's responsibilities: ↳ Reviewing contract terms for legal risk, enforceability, and regulatory compliance ↳ Ensuring data privacy, IP, and confidentiality protections ↳ Drafting or approving clauses around liability, indemnity, and termination ↳ Negotiating on complex or non-standard terms Do the same for procuremnent's responsibilities: ↳ Commercial terms review: pricing, scope of work, SLAs ↳ Operational & practival review: governance structures, shedules, compliance with procurement policies ↳ Commercial risk & business exposure: e.g. any restrictive obligations, termination clause feasibility 4️⃣ The process enablers Because contract reviews can be onerous ↳ Develop a set of standard T's & C's for your business with legal ↳ Provide one pagers or FAQs covering: (i) when legal review is needed (ii) common red-flag clauses to watch for (iii) Definitions of tricky legal terms in contracts (iv) Contact points for legal support ↳ Provide simple process maps or RACI charts ↳ Host short training or awareness sessions with stakeholder groups Finally, some pro tips: ➟ Don't assume the typical stakeholder understands the difference between legal role and that of procurement ➟ Communicate regularly with stakeholders and be realistic with timescales ➟ Get in writing your business stakeholder has also reviewed and understood the contract. ➟ Don't try to cover the gaps in your legal team resource by stepping outside what you're trained to review. _________ Follow this & you'll provide 10x more value than just saying 'yes' & overstepping your role I promise! Repost ♻️ if this helped.

There's an AE on my team that consistently hits 200% of quota or more. How? She asks the hard questions: 1. “You mentioned [X date] as a goal—what’s driving that timeline, and is that date firm?” Verifies whether the timeline is real or aspirational. 2. "Based on what you’ve seen so far, is there anything that’s giving you pause about moving forward with us?” Invites honest feedback to surface objections early. 3. “How does our solution compare to others you’re evaluating?” Tests competitive positioning and whether you're the frontrunner. 4.“Who else on your team needs to feel good about this before a decision is made?” Pushes beyond your main contact to build a map of the buying committee. 5. “If [insert key stakeholder] were here, what concerns would they raise?” Forces your champion to think on behalf of other decision-makers. 6. “Have you ever purchased something like this before? What did that process look like internally?” Surfaces potential red tape or hidden decision criteria. 7. “What needs to happen between now and [target close date] for this to actually happen?” Pushes them to co-create the buying journey and surface risk. What's your favorite hard question to ask? - Mike G 👉 Check out my newsletter (it's free!): https://lnkd.in/gGyqJquj