Send to KindleDuring negotiations,when you are making an initial offer, you need to take a lot of care in this step. As I am conducting research (watching Pawn Stars or American Pickers), one of the things I see is that people will say “I want $1000 for this item but I will take $600”. So when asked for what they want for the item, they will say “I want $1000!” Maybe it’s part of my East Tennessee heritage or just being cheap; I would immediately counteroffer at some lower price or ask them what their best price is.
People expect a bargain and often are not willing to accept the first price. If you expect to have to come down in price, why would you start where you want to end? If you are going to negotiate, you want to leave yourself some wiggle room to give or take on the price. If I am selling, I always ask for more than the price I want, unless I make it clear that this is the fixed price and I am willing to walk away from the deal. When I have been asked if I would take less for the item, my response is a polite “no”, followed up by a statement that they know that what I am offering is a good price. Their reaction is often a sheepish look, a “Well I had to ask,” response, along with them fishing in their pocket for the money to pay for the item.
If I am willing to negotiate, then I will give them my price along with any facts or features I want them to be aware of and then wait. If they counter offer, then I can see how serious they are what the range is and work toward my desired price. In negotiating, you usually don’t start with the ending price since it is human nature to want a bargain and you set yourself up for a difficult negotiation if you do not allow room to maneuver. What’s your experience in this?
Cool tips, and yes, I laugh too when I see people on Pawn Stars “I want $2500″ and then they walk out with $500. They need you in their back pocket!
Sue
With a physcal item, what you outline is perfect. With a service, Alan Weiss taught me (thru his writing) that when someone negotiates you down, you correspondingly bring down the service.
Great advice, Bill. This sounds similar to a technique that I teach my clients called “positioning the investment.” I also, agree with, Jeff on the service comment. Whenever someone is negotiating with you on a service that will require your time, energy, and resources, IF you agree to lower the investment, you also take away some of the features or you will find yourself in a hole.
Bargaining in the marketplace in Mexico has always been difficult for me, but you give me some strategies, Bill. And the idea of taking away some of the features on services you offer makes sense. Thanks for this discussion! It gives me some things to think about (which is always the first step to action).
Interesting points you make – this is certainly my experience in buying property – as a property investor for over 12 years I always have wiggle room in my negotiations – in fact I have even bought two properties in the past for half the sellers original asking price – how – by understanding their motivations and the benefits of them selling and working with those rather than focusing so much on price.
Bill – great reminders
We use this strategy when hitting garage-sales with the kids. We give them a set amount of cash in the morning and they can spend it on whatever they want, but when they’re out – they’re out. They aren’t afraid to negotiate at all – it’s awesome to watch adults get talked down by little kids … and because we’ve taught them never to take no for an answer and to always counter offer … at 5 and 8, they have great success getting all the trinkets they want 