Director of Contracts, E&I Cooperative Purchasing
E&I is one of the largest purchasing pools dedicated to the education market
Negotiate for mutual success. Every negotiation should be a win-win. The successful negotiator has to learn the art of give-and-take with suppliers. The process isn't always about increased savings—sometimes it's about building a supplier relationship.
Be prepared. Set your requirements in advance: what you're willing to offer, what you're willing to accept, what concessions you're willing to live with. Learn as much as possible about the supplier and its services. How do their prices compare to competitors? There's a wealth of information you can check on the Internet. Business ethics are important. Deceptive tactics such as bluffing or misleading a supplier may do you damage in the long run. While being honest, be careful not to give away your bargaining power.
Articulate your potential as a customer. Be sure to talk to suppliers about your key goals and objectives—not just for your unit, but for your organization as a whole. Identify key success metrics that you're going to be measured by. A supplier may be able to help you meet those goals. It's very important for them to know the value of having you as a preferred customer.
Ask what incentives you qualify for and let negotiations begin from there. It's OK to mention competition. They need to know you have options. But don't disclose pricing or other confidential details.
Build a partnership with your supplier. They must make a profit to stay in business. Any time a supplier starts a relationship
Director of Development, LEARN
Regional Educational Service Center
LEARN represents 24 school districts of varying size in Connecticut
It can be a really big challenge for smaller districts to leverage buying power through volume. What we like to do for our smaller districts is create a regional purchasing cooperative.
We want to make sure that schools have really good quality, so we always do a reference check. It may come down to total value versus the lowest dollar amount.
We also like to talk with vendors about their personal contact with each district to make sure they don't undermine the regional cooperative, saying "we're doing this just for you."
Look at bundling a product with a service. With technology, for example, does that vendor offer managed services? We try to look for a full service contract that brings us bigger value or a discount. You can build a better relationship with a vendor, and get more value for your dollar.
Piloting new services is another way to stretch your dollars. Volunteer to be a beta or demo site. When we do that the vendor gets access to multiple districts at the same time.
Recently we've been able to get our districts to try a whole new purchasing method called online procurement, or reverse auction. Think of it as eBay reversed—as vendors bid to be a preferred vendor, their prices go down. It's very transparent because it's all a Web-based process.
It occurs in a 30-minute time frame. Bidders sign in with a code, and all vendors agree in advance to the bid specs. Everyone can watch the process online. Vendors put up different prices for lots. A lot could be for an order of interactive whiteboards, paper or custodial supplies. In the two online procurements we organized recently, we saw savings of 27 to 50 percent.
There are some challenges. You don't always know vendors in terms of a personal relationship. Some people are a little skeptical because it's brand new for the public sector, but it's not brand new for the private sector.