Consultative Approach: Advocates for the Buyer
With an understanding of the buyer’s capacity, we can then advocate for the buyer’s interest to help both design a successful transaction and negotiate for any special accommodations. A qualified buyer with a full understanding of their capacity to transact help place the buyer in the most favorable and qualified position to negotiate.
3 Factors That Drive Qualification
There are 3 factors that determine a buyer’s transactional capacity. Understanding these parameters through a consultative dialogue is an essential process in designing or negotiating the transaction for success.
Transactional Authority
Who are the parties involved in the transaction and what is their authority to place an order for product or authorize funds? Large commercial transactions often require the collaboration between multiple parties or partners. For both compliance and qualification purposes, it is important to understand the legal relationship between the parties.
Funding Capacity
Large commercial transactions require access to funds which need to be raised or aggregated from various sources including lines of credit, funding partners, government entities, etc… The status and location of those funds needs to be understood as they relate to the ability to transact efficiently.
Mechanism
What are the processes and parameters that are either preferred or required on behalf of the buyer to provide reassurance that the product exists or to trigger the release of funds.
What’s Negotiable
As long as the parameters of the transaction lie within the provisions of the law and the tolerances of risk and compliance, many facets of the transaction can be negotiated including, price, procedures and terms.
Best Prices are Dependent on the Strength and Risk of the Buyer
Pricing is affected by perceived or actual risk factors. The more that a transaction is fully understood and disclosed, and the various parties meet the seller’s due-diligence and compliance criteria, the lower the risk.
