My winning story
I remembered, when I worked at Measat, I was handling a contract renewal to purchase goods valued at more than RM 10 million. For many years the Business Unit (‘User’) only purchase from one particular vendor (‘the incumbent’). And ‘quality is the main reason.
Upon negotiation of the contract, the incumbent agreed to reduce only 5% from the original unit price. As 5% discount was the department’s target, I could easily agree.
The user insisted to renew the contract.
However, I managed to convince the User to conduct tendering exercise and invited 4 vendors (including the incumbent) to participate.
Upon receiving the quotes from all, I was surprised. The incumbent turned out to be the lowest. And the best part, they reduced the price by more than 40%!
From this, you can see how the power of option helped in negotiation.
I don’t have to do much effort, and yet I get significant discounts. by showing the seller that I have options.