Negotiation 101: When to stick firm

Mira ZasloveDirector of Sales. Enjoys negotiating and learning new things. Currently lives in Silicon Valley with husband and baby daughter.

When to negotiate and

when to stick firm

Relative advantage in these 2 areas will determine strategy & how much leeway you

have to negotiate:Alternatives to completing the

deal

Timeframe to complete the deal

VARIABLE1: AlternativesAre you dealing with a rare item or everyday commodity?

The party with the best alternative option has the leverage.

Example – You have the Advantage:

You are selling a rare antique wedding ring. You showed it to a buyer, who fell in love with it.

Strategy – You have the advantage:

There are not many other viable options, so do not throw out the first price.

Ask for their best offer. You may get a lot more than what you were going to ask for.

Example – You have the disadvantage:

You want to sell a camera you no longer use. The market is flooded and there are only a few buyers.

You want to set the price because you lack the advantage. Buyers have many other alternatives.

In a moment of weakness you might accept any offer.  You want to be clear and definitive.  Offer a price you know is fair.  Back it up with stats, and stick to it.

Strategy – You have the disadvantage:

VARIABLE 2: TIMEFRAMEUnderstand when you and your counterparty need to complete the deal. 

The party with more time flexibility has the leverage. 

Example – You have the advantage:

You have a piece of manufacturing equipment for sale.  Your buyer needs the equipment to produce their product. They are losing money every minute until they get the equipment.

Because they are under more pressure, wait for them to give their offer.

Because you have the advantage: if their offer is low, walk away. Do not accept a price less than what you want for both the equipment & your time, you don't need to.

Strategy – You have the time advantage:

Example – You have the disadvantage:You are moving and need to sell your car, you don’t have time to shop around for other buyers. 

When you have the disadvantage, charge a price you are comfortable with, and can back up with stats (Kelly Blue book, etc).

Stick firm and move to close the deal quickly.

Strategy – You have the time disadvantage

AND

Negotiate when you have leverage

Stick firm when you are weaker.

mira-zaslove

Mira-Zaslove

@mirazaslove