I was on a beach and a guy tried to sell me some local precious stones. Very quickly we went from $100 to $10 and when I tested the ‘stones’ they were actually lumps of plastic. He shrugged and moved on to the next tourist – no hard feelings on either side. His negotiation approach is more zero-sum than win-win but has this damaged his business? – probably not.
Handle negotiations with a one-off sale badly in B2B and you may harm your reputation or your bottom line, but usually only on that one deal. However, getting it wrong with an ongoing relationship can be disastrous, especially in the channel. Where a company is re-selling your product, you have to know exactly where you fit in the value chain. What is the Standard for your product? What will your partner need to sell at, to win against the competition? - and still make enough margin to excite them, and their salespeople. What is unique about your offering and how does that translate into benefits for your partner and their customers?
I see basic negotiation mistakes all the time in my industry and usually due to lack of research and preparation. Suppliers trying to sell products to resellers without considering what they will sell it for, or assuming that their ‘unique’ features are benefits, without having properly tested the proposition. On the other side, resellers come back with random requests for discounts and get offended when you ask why. Alternatively, they invent prices they have received from other suppliers in an attempt to improve their own margin.