Can you positively bargain or negotiate with a ‘monopolistic’ type supplier? If not, what else you do to continue the supply?

Hi, 

It is very tough to bargain with monopoly supplier but you can still negotiate on delivery terms, payment terms, delivery lead time, etc..

Normally it is possible to negotiate with monopoly supplier if you have high volume in terms of order, or you can try to make a contract with my committed volume (Yearly / Monthly), I am sure with this tactics you will be able to get significant results.

It’s a really a tough challenge to negotiate monopolistic vendors; to deal with them should define a strategy, that al will depend;

1-The right time to make sure market conditions favor your position.

2-The other streams of business with the same supplier and use them to leverage in your negotiation

3-Provisions of utilizing the supplier by other suppliers and customers under the same contract. This will increase supplier’s dependency on your firm.

4-Estimate supplier consequence of no agreement. Put all of the numbers on the table and provide a savings target to the supplier in first meeting.

5-Develop a strategic partnership Leverage the experience of the monopoly supplier through its involvement in process improvement,

If Not ,

Source globally , Redefine the market that we are dealing with , Supplier Development , Increase Mutual Dependency , Better information on the supplier , Challenge the ‘reputation’ of the suppliers , Involve other stakeholders , Lease not buy , Long term contracts

In Asian markets, when there is a price - lock on goods, the price is usually as low as governments will allow.  

"Wow" volume ordering is probably a good approach to remain detached in transactions. 

If you mean that the supplier is only one of a few creating demand, then some options include:

• Generating conglomerate demand from different location sources to squeeze the supplier
• Seek alternative manufacture elsewhere at a low rate to ship into the market and replace the supplier

Hello,

in Business you can always negotiate any term of purchasing, if this is a sole source supplier then an alliance or long term relation should be established and to work towards win-win situation, otherwise the business always will have turbulence.

also i agree and support the answer of Ms. Rosemary Marcell

Best Regards

In order for negotiations to be successful there needs to be some force to promote it. If you have no power and there is no alternative then power you can apply is limited. However, even a monopolistic supplier needs customers to exist. My advice is focus negotiations on relationship matters eg performance, quality etc more subjective things rather than price. Price becomes a zero sum game, what they give up you win and it is too definitive. You need to run the price arguement in parallel with other issues, or you will end up with a mexican standoff.....yes vs no.

It all depending upon business nature and market conditions, however, dependability on a single source is strategically wrong. Always keep searching dependable, reliable and sound sources. You must have alternative strategy on the cards to secure your business. Net let yourself down while negotiating, treat your sources /vendors as partners, allow them comfort zone but not at your cost.

My point of view is that you can always negotiate.

In this particular case, it really depends - how important are you to the supplier? Do you have a chance to ever become important to the supplier (ie are you growing?)

If you are small and unimportant to the supplier, you can always try being polite and asking nicely. Most people are unable to say no to a polite request made by someone genuinly nice.

Even if you are in a monopoly market you can still negotiate as the supplier does not know your options.  You have to clever. 

Thanks for invitation.

I support the answer of  Mr. Mohammed Awad

Thank you for the invitation 

Agree with the answers provided by Mr. AAMIR AHMED SHAIKH and Mr. Shibin Thandam Parambil

Regards.

Its quite difficult to bargain or negotiate positively with a monopolistic type of supplier. Whatever the negotiation process, finally, the suppliers wins. In that case, you need to create alternative multiple suppliers if possible so that you impose your bargaining power. On the other hand, you also have to keep in mind the quality issue as well.