How to Negotiate?

How to Negotiate?

Negotiating is a normal part of life, especially in the business world. It can be intimidating and uncomfortable if you're not used to it, but the good news is that anyone can learn how to be a strong and effective negotiator. If you're not sure where to start, don't worry—this article will walk you through everything you need to know to start negotiating and getting what you want.

1. Essential Negotiation Tips

Open at your maximum sustainable position (the most you can logically argue for). Ask for what you want, and then some. Starting high is important because you'll most likely be negotiated to a lower level. If your opening offer is too close to your breaking point, then you will not have enough bargaining range to concede to the other party as a way of giving satisfaction.

On the other hand, you also want to avoid making an outrageous opening offer since doing so may create a "chilling effect" in which the opening party quickly loses motivation to continue negotiations with you. Your opening offer should be much greater than the minimum you'll accept, but close to the most reasonable maximum amount the other person may pay or accept.

Are you worried about insulting them, especially if making a very low offer to buy something? Remember that this is business, and if they don't like your offer, they can always counter-offer. Be bold. If you don't take advantage of them, remember that they'll take advantage of you. The act of negotiation is mutually and beneficially taking advantage of each other.

2. Do your research ahead of time and bring proof. If you're negotiating a salary and you've researched how much people in equivalent positions get paid in your area, print out those statistics and have them handy. If you're buying a car and you know the other dealer will sell you the same car for $200 less, tell them so. Tell them the name of the dealer and salesman. The threat of losing business or opportunity, even if it's not a serious one, can make people compromise.

3. Take your time before you accept or decline an offer. When the other party makes a proposal, don't reply immediately. Instead, use your body language to indicate that you're not satisfied. This will make the other person feel uncomfortable and insecure and often force them to come up with a better offer to fill the silence.

4. Ask for something that's valuable to you but doesn't cost them much. Having both parties feel like they're on the winning side of the negotiation is a good thing. And contrary to popular perception, negotiation doesn't have to be a zero-sum game. If you're smart, you can get creative with what you ask for.

Let's say you're doing business with a winery, and they want to pay you $100 to perform there. You want $150. Why not suggest that they pay you $100 and give you a $75 bottle of wine? It's worth $75 to you because that's how much you'd have to pay to buy it, but it costs them much less to produce that bottle.

Or, you can ask them for a 5% or 10% discount on all their wine. Assuming you buy wine regularly anyway, you'll save money, and they'll still make money from your purchases.

5. Offer or request extras. Can you sweeten the deal in any way, or ask for something to sweeten the deal? Extras or perks can be cheap to provide but push the deal closer to the "sweet" territory.

Sometimes, but not always, offering lots of small incentives, as opposed to one larger incentive, can make it seem like you're giving away more when in fact you're not. Be aware of this, both in giving away incentives and in receiving them.

6. Offer to pay upfront. An up-front payment is always desirable to a seller, especially in situations where most people do not pay upfront (we're looking at you, car dealerships). As the buyer, you can also offer to buy in bulk, paying in advance for a certain number of products or services, in exchange for a discount.

One tactic is to come into the negotiation with a pre-written check; ask to buy the product or service for that amount, and tell them that's your final offer. They may accept it since the lure of immediate payment is hard to resist.

Finally, paying in cash rather than with a check or credit card can be a useful negotiation tool because it reduces risk to the seller (e.g. check to bounce, credit card declined).

7. Never give away without getting something in return. If you give something away "for free," you're implicitly telling the other person that you think your bargaining position is weak. Smart bargainers will smell blood and swarm you like sharks in the water.

8. Always hold back closer or two. A closer is a fact or argument you can use when you sense the other side is close to a deal but needs that final push. If you are a broker and your client is going to buy this week whether this seller is willing or not, that is a great deal closer: your client has a time constraint that she'll want to meet, and you can persuade her why meeting that time constraint is important.

9. Don't let personal hangups sidetrack the negotiations. Too often, negotiations are sidetracked because one party takes an issue personally and doesn't let go of it, reversing any progress made in the initial stages of the negotiation. Try not to take the process of negotiation personally, letting it offend your ego or your sense of worth. If the person you're negotiating with is rude, overly aggressive, or abusive, know that you can walk away at any time.