A Negotiator’s Checklist: What You Must Get IN WRITING Before You Buy

Our memories can fail us, and salespeople can sometimes enhance reality. So we need to write things down, especially prices.

You’ve already learned this – either the easy way, or the hard way. The problem is that a simple reminder to “get it in writing” is not complete when it comes to business purchases and dealing with vendors.

For one thing, a stand-alone price in writing may not be very helpful. There’s more information that you need from the seller for that quote to be useful. (I’ll explain this more below.)

However, the MOST important things to get in writing will not come from the seller.

Is that a surprise?

Not for buyers who routinely capture maximum VALUE – as opposed to simply paying the lowest price. The value is the difference between the BENEFIT and the price. (Video explanation here.)

 

The Inside Work

So, if getting the price in writing from a vendor before making a purchase is important, it’s even more important to write down the benefit. How do you do that?

One simple way is to cover the basics like a good journalist:

  1. What – what do you plan to buy?
  2. Why – why are you buying this? What is the business goal? (The more specific, the better.)
  3. Who – who at your company will use it?
  4. How – how will they use it?
  5. When – when do you need it?

The length of sufficient answers depends on the purchase. Higher dollars and complexity mean more detail, while smaller buys may just require a few bullet points.

Every business should do this for every purchase over $100. If it’s easy, it will only take you five minutes. If it’s hard… then you need to make sure you understand your benefit and ask why you’re buying. Struggling through the What-Why-Who of a purchase means the connection to your business goals may be shaky.

Know Thy Benefit: a great price on the wrong buy is a bad deal.

 

OK, now that you know what you need to put in writing, let’s talk about what you need from the seller and finish out our list of what you need in writing:

6. Detailed Description / Specifications

Would you buy a car for $25,000? What about a Toyota Sienna? What about a blue 2011 Toyota Sienna? It could still be either a great deal or a terrible one, depending on additional details. That’s true for most purchases. The same is true with business purchases and you need to know all of the details and a specific description or specification of what you’re purchasing.

If you have done the inside work and know your benefit, you know what the most important part of the purchase is. On that most important part, the description (in writing) needs to eliminate wiggle room that could impact the value of the purchase.

7. Terms & Conditions

No price walks alone. It travels with an entourage of terms and conditions that spell out how risk is divided between buyer and seller. Each side may have wildly different assumptions on this. Instead of bringing lawyers into a late argument about what is “standard” or “commercially reasonable” or “causes heartburn,” get those T’s and C’s on the table with the dollars… before you choose a vendor.

8. Delivery

This is the when and how of getting and using the purchase. Does it need to be shipped? When will it be finished? Depending on the answer to your “when” above, these details may be critical.

9. Price

Now that the specifications, delivery, and T&Cs are pinned down that number really means something.

Let’s review that list again:

  1. What
  2. Why
  3. Who
  4. How
  5. When
  6. Product Details
  7. Terms & Conditions
  8. Delivery
  9. Price

For the tenth item, write down the vendor name.

Finally, for true Buying Excellence, find three more vendors, and repeat 6-9. You’ve already done the hard part, so you might as well drive that value up even more.

Wishing you Excellence in how you buy, and in what you buy.

Want to know more about figuring out exactly what you need, make sure that you take a look at our article titled: “What Are You Buying Anyway?“. Or maybe you need more information about how to compete purchases with different vendors for your business, we’ve got you covered here as well.

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