Tesco - English For Buyers

Are you a buyer at Tesco? Or maybe you are thinking about applying for a buyer position? Or maybe you need a way to counter buyer's tactics? This course is for you!

Definition

1. Party which acquires, or agrees to acquire, ownership (in case of goods), or benefit or usage (in case of services), in exchange for money or other consideration under a contract of sale. Also called purchaser. See also customer.

2. Professional purchaser specializing in a specific group of materials, goods, or services, and experienced in market analysis, purchase negotiations, bulk buying, and delivery coordination.

A buyer is someone who:

  • Likes to go shopping
  • Is responsible for purchasing goods and services
  • Can be bought.

Negotiation Tactics

Here are six common tactics buyers might use to gain a positional advantage, and ideas what kind of response you can expect:

1. Anchoring

Buyer says: "We're looking to spend no more than $500,000 for this." 

With this tactic, the buyer shares a target price, such as a budget cap, to anchor the bargaining range.

Possible answer?

Ideally, you should be the first to suggest a price. Don't wait for the buyer to do so. If that doesn't work out, don't accept their number at face value. Ask how they came up with their number, and how it fits with their budget. The goal is to uncover whether it's a real number or a ploy.

Whack Back

Buyer says: "Your price is too high," no matter what it is when you tell them for the first time.

This is one of the most common buyer tactics—to ALWAYS push back on the first price offered.

Possible answer?

Ask why. Listen fully as the buyer explains their objection, and ask permission to completely understand the issue. What they say will dictate your response. For example, if they say, "Well, I've bought it before for X!" You can say, "I think the reason I'm here is that you've had a lot of problems in the past. We're different than X." And so on.

Sticker Shock

Buyer says: "It costs how much?!"

The buyer appears to be shocked or stumped by the price you've offered. It could be an orchestrated reaction, rather than genuine surprise.

Possible answer?

Ignore their flinch and wait for any theatrics to die down. Ask why it seems high to them. Often their reasoning is faulty, and you can open up a conversation based on what you find out.

Cherry Picking

Buyer says: "I know I told you our initial order would be 5,000 units with 5 components, but we'll just need 500 units and 2 components at first. I did the division so the price should be..."

In this scenario, the buyer has tried to unbundle a solution to gain concessions, and assumed the unit price will stay the same.

Possible answer?

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Address the issue head on with a statement such as "I'll need to review the pricing based on the new scope and terms." They may make it seem as though these new terms came out of nowhere and nothing can be done, but remember—you don't have to accept changed terms just because the buyer changed them. Engage in a discussion to work out appropriate pricing.

Pencil Sharpening

Buyer says: "You're going to have to do better than this. We need to get it for less."

This is a common pushback tactic to "get you ready" to drop your price because it's "expected."

Possible answer?

Don't ask "Well, where do we need to be?" This is a trap. Focus instead on asking questions such as, "Why?" and "What are you comparing us to?" Hold your ground on differentiating the value you offer. If you probe to create solutions, the buyer will often back down.

Now!

Buyer says: "I'm talking to the CEO in 5 minutes. Are you sure I have the best price?" Or, "I will give it to a competitor by noon if you don't make this concession."

This tactic uses time pressure to get the seller to lower their price.

Possible answer?

Don't panic or reflexively drop the price. Stall for time to think. Ask for a few minutes to disengage, saying something like, "I'm in the middle of something else right now. I can take a look soon and call you back." Alternatively, you can ask, "So we'll know one way or another after your meeting?" If the buyer says no, then it could be a bluff. If it's a yes, take time to think and call back with a bargain you want. But be aware that this can be a power play on their part. If you cave, they'll expect it in the future.

Which negotiation tactic is the most useful one in your opinion?