Learning Objectives

• • Learn the importance of alternatives in negotiation

• • Understand the importance of listening

• • Explore techniques for effective listening

• • Learn about the importance of power and how to enhance it

• • Understand how to say “No” in a productive way

Opening Profile: Walmart Vendors

Walmart vendors are trained to treat their vendors in a variety of ways, depending on where you fit in their plan. This case shares the story of a vendor called Sarah who negotiated a win-win outcome with Walmart. Walmart, the world’s largest retailer, sold $514.4 billion worth of goods in 2019. A partnership with Walmart is either the Holy Grail or the kiss of death, given the organization’s single-minded focus on EDLP (everyday low pricing) and its ability to make or break suppliers. However, one’s perspective may make a difference.

Sarah Talley (owner of Frey Farms) acquired a deep understanding of the Walmart culture while finding “new money” in the supply chain through innovative tactics.

For example, Frey Farms used school buses ($1,500 each) instead of tractors ($12,000 each) as a cheaper and faster way to transport melons to the warehouse.

Talley also was skillful at negotiating a coveted co-management supplier agreement with Walmart, showing how Frey Farms could share the responsibility of managing inventory levels and sales and ultimately save customers’ money while improving their own margins.

Sarah Talley’s key negotiation principles:

When you have a problem, when there’s something you engage in with Walmart that requires agreement so that it becomes a negotiation, the first advice is to think in partnership terms and really focus on a common goal, for example, getting costs out and asking questions. Don’t make demands or statements. Rather ask if you can do this better. If the relationship with Walmart is truly a partnership, negotiation to resolve differences should focus on long-term mutual partnership gains.

Don’t spend time griping. Be problem solvers instead. Approach Walmart by saying, “Let’s work together and drive costs down and product it so much cheaper you don’t have to replace me because if you work with me I could do it better.”