10 Tips For Negotiating with Vendors in a Down Economy

By Eva Marer

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Editor's note: This is a sidebar to Putting The Squeeze On IT Vendors.

Let's face it. Up to now vendors have had the home-court advantage. After all, their job is to sell you services -- and they do it every day. You may be many things, but chances are you're not a professional buyer. In the back-and-forth with vendors you've probably lost a few rounds.

These days, however, the ball is back in your court. With the economy in low gear, many vendors are eager to relax the hard sell and play nice. Despite corporate downsizing, companies are paying on average 10 percent less for the same vendor services, according to Howard Lackow, senior vice president of the Outsourcing Institute, a professional organization and consulting firm based in Jericho, N.Y. Especially in areas where human resources are involved --such as systems integration and application development-- it's not uncommon to negotiate deals for 20 percent off their price before the downturn.

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Read the main Special Report story, Putting The Squeeze On IT Vendors to learn about buyers' strategies in action.

Also read Don't Overlook Used Equipment Market

The advantage may have shifted to your side of the court, but that doesn't mean you should smash every serve into oblivion. After all, you still have to collaborate if you want your project to run smoothly, and you don't want to create an adversarial relationship from the get-go.

A little savvy can help polish your volley when it comes to negotiating with vendors. Knowledge of fundamentals --and a straight face-- is the hallmark of an ace.

Eva Marer is a freelance business and technology reporter based in New York. She covers investments, personal finance and corporate technology issues for a variety of trade and consumer magazines. Contact her at egresspress@aol.com.