Make the first offer!

Numerous studies have already shown that whoever makes the first offer tends to anchor the negotiation in their favor. Yet, I’ve hardly ever seen a procurement team take advantage of this.

The procurement process is almost always the same: you send out an RFQ and wait for the supplier to set the price, throwing away the opportunity to anchor.

You should be doing the opposite: stating the price you expect! This is how you create leverage and take the initiative in a negotiation. This is actually the core thesis of Arkestro, a US-based tech company that aims to "set the starting price" in negotiations.

Of course, this approach requires disruption!

On one hand, e-procurement systems (think Ariba, Coupa, etc.) aren't designed for this. They can’t truly create psychological anchoring with suppliers. They don't even see this as part of their scope—they are merely systems of record, almost like an ERP, where the buyer is left to fend for themselves.

On the other hand, companies rarely have the data or processes that allow them to know prices in advance.

For materials, a well-maintained master data system should help solve the problem (easier said than done!).

For services, however, the issue is much more complex. How do you anchor the price of something when the scope is poorly defined? Without a clear technical definition, it becomes a dangerous guessing game. This is a topic we will be diving into deeply in future posts!