Effectively Negotiating New Equipment Purchases

Negotiating equipment purchases can be tricky. As the buyer, the power dynamic of the conversation is tilted away from you. However, there are a few things you can do to give yourself an advantage in the negotiation; namely, having a clear idea of what you need, getting quotes from competitors for leverage, and showing the flexibility to negotiate in terms other than currency.

1. Know exactly what you want

It’s easy to become distracted by the innovative features or groundbreaking specifications of new lab instrumentation. Sales representatives are all too aware of this, and they often leverage that in trying to upsell you on instrumentation that will fit your needs, but possibly be overkill.

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To shield yourself from being upsold on equipment with features unnecessary for your uses, know exactly what you want out of your new equipment before approaching a vendor.  Simply having a vague idea of what specifications suit your application is not sufficient. You should know not only your minimum specification requirements, but also factors such as the media that the equipment will interface with and its compatibility with your lab’s informatics platform.

Expected future needs should also be considered. Ideally, the new instrument will grow with your lab, both by supporting an increased sample throughput and accommodating new workflows. For instance, your lab may only analyze cuvettes right now, but if you expect to scan microplates in the future, purchasing a plate reader with an integrated cuvette reader will support your lab’s expansion.

By arming yourself with this information, it will be much easier to shoot down the sales rep’s attempts at upselling you on the new equipment. You are aimed squarely at what you want.

2. Query other vendors for leverage

A fundamental tactic in negotiating for pay raises is to secure offers from competing companies to use as leverage. This same technique is effective when purchasing equipment, and it may be the most impactful technique in your arsenal. As a buyer, showing that you can walk away is a surefire way to shift the power dynamic in your favor. To accomplish this, query multiple vendors, gathering the prices, technical specifications, and purchase bonuses of options that fit your need and budget. Use this information by asking vendors if they can match the price of a competitor, offer a better service package, etc. By investing time in such market research, you can secure the best possible deal.

3. Negotiate in terms other than money

It’s better to approach a negotiation in terms of value rather than money. Thinking in terms of money may limit you to only negotiating the price of the equipment, while value encompasses many more factors—service packages, warranties, post-sale support, consumables, reagents, etc. Negotiating on more factors widens the boundaries of the discussion, giving you more room to pivot and land a better deal. For instance, if a vendor won’t match the price of a competitor, you can ask them about including an extended warranty or an upgraded support package, essentially netting the same value that a discount would have.

But what does it look like when these principles are put into practice? Here are two conversations, one that illustrates a poor negotiation in which the customer leaves dissatisfied, and an effective negotiation in which both parties are satisfied.

An Example of Poor Negotiation

Buyer: Hi, I’m looking for a UV-Vis spectrophotometer.

Seller: Certainly. We have several models available. Do you have any other specifications in mind?

Buyer: I just need a general-purpose unit.

Seller: Okay, how about this new model? It’s a multimode plate reader that also supports cuvettes. It’s great for labs with diverse spectroscopy needs.

Buyer: Right now, we only use cuvettes...but I suppose it wouldn’t hurt to have a plate reader. How much is it?

Seller: We’re asking $30,000 for it.

Buyer: Oh. That’s more than I wanted to spend. Could I get a discount?

Seller: Unfortunately, I can’t offer that.

Buyer: Well, if that’s the price, that’s what I’ll have to pay.

Seller: Great! Let me print out some forms...

In this conversation, the buyer made some key errors:

1. They didn’t know exactly what they needed. This made them vulnerable to being upsold.
2. They only tried to negotiate in terms of cost.
3. They didn’t query competitors for leverage.
4. They accepted the first offer with no resistance.

An Example of Good Negotiation

Buyer: Hi, I’m looking for a UV-Vis spectrophotometer to read cuvettes. It must have a wavelength range between 250nm and 1000nm, though ideally wider. My budget is $20,000.

Seller: We have a few options for you. Here’s our newest model; it supports cuvettes and multimode microplate reading. It also has the widest spectral range of any of our products. It’s available for $26,000. I think you’ll find the added flexibility of the plate reader will justify the cost.

Buyer: No, I don’t need a plate reader now and I don’t expect to need one in the future. Also, I don’t want to go over $20,000. What else do you have?

Seller: We have another cuvette reader that fits your needs. Its spectral range meets the minimum range you mentioned. It’s $22,000.

Buyer: That’s more like it. I have a quote from one of your competitors for a model with identical specifications for $18,000. Can you match that?

Seller: I’m afraid I can’t.

Buyer: If you can bundle in an extended warranty and support package, I’ll pay the full price.

Seller: I can do that! I’ll include a three-year warranty and one year of no-charge service calls.

Buyer: Great! We have a deal.

In this negotiation, the buyer did everything right:

1. They knew exactly what they needed, shielding them from being upsold.
2. They did their research, using quotes from competitors as leverage.
3. After trying to negotiate in terms of price, they pivoted to negotiating in terms of benefits, essentially netting the same value that a discount would have.
4. They showed flexibility, willing to boost their max price in exchange for another value add.

In short, the buyer who negotiated well created a win-win negotiation: they got a unit that fits their needs with valuable bonuses on top, while the company was able to sell a model at full retail price. Both parties walked away happy.