The Art of Negotiation
Annual cost comparisons
Overall competitiveness is best determined by calculating the anticipated total annual cost of each proposal, not just by looking at one or two proforma invoices. The various proforma models need to be weighed with a reasonable estimate of how many issues (of each type) make up your annual volume. Inevitably, senior publishing management will want to know the annual savings impact of selecting Printer A versus Printer B and how the proposals compare to current manufacturing costs.
You should base your supplier selection on capability, quality, service, price and relationships. Price consideration is irrelevant if a prospective printer cannot fulfill your magazine's requirements. After careful analysis of the first four considerations, you may well have a tie. That's when relationships come into play. Relationships can win ties, particularly if you feel comfortable with a printer's culture and staff.
Current supplier considerations
If your current supplier consistently provided excellent quality and service—and remained price-competitive—you may consider an early renewal proposal from the incumbent and bypass the full-blown RFP process. This presumes that your current supplier offers appropriate pricing incentives linked to reductions for the last six months to a year left on the existing contract. However, renewals without consideration of competitive proposals should only be done once, never two cycles in a row.
In some cases, proposals may be very close in all the aforementioned areas. How long the prices are effective or when they are subject to escalation may distinguish one from another. Payment terms is another area where one printer may be more flexible than another. The contract should allow for equipment and specification flexibility.
Close the deal
Rarely will one round of bids bring you closure. A second and (hopefully) final round will enable you to fine tune the many basic and subtle issues with two finalists. Going beyond two rounds is usually not necessary, nor is it recommended. If you are changing printers, three-to-six-months notice to the incumbent is appropriate to ensure a smooth transition.