Art of Negotiation
Chapter 18. Price Negotiation Tactics
When money realizes that it is in good hands,
it wants to stay and multiply in those hands. ― Idowu Koyenikan
In chapter 3,
we talked about two types of negotiation:
short negotiation term,
one-time and long-term negotiation.
In short-term negotiation,
your task is to get the best price and terms at that moment,
regardless of whether you continue to cooperate
with this partner or not.
There are many price negotiation tactics
you can use to get a better price
or deal when conducting a one-time sale.
These tactics also work
when negotiating long-term agreements,
the kind of agreements where you’ll need
to see your partner again every year.
Strategy 1: Hesitation
No matter what price the other party offers,
act hesitant as if you’ve just heard something discouraging.
Put on a sad or miserable face.
Lift your eyes up,
then look down as if you were in great distress.
Say something like,
“Oh! This is going to cost too much!”
Sometimes just this hesitation is enough to make the opponent
adjust the price immediately.
If initial hesitation gives you a lower price to buy,
or a higher offer to sell,
continue to use hesitation again
and again when negotiating.
Strategy 2: Ask questions
Ask: “Is this the best you can come up with?
Can you do anything better than that?”
When you ask about the price,
after the other person responds,
pause for a moment,
“Is this the best price you can offer?” then silence.
If you can be flexible,
usually the other party will immediately lower the price
or increase the offer.
If the other side lowers the price,
you can continue to ask:
“Is this really the best you can offer?”
Then keep pressing to get the best price and terms possible.
Follow up by continuing to ask,
“What more can you do?”
Remember, the person you’re negotiating
with isn’t actually talking to someone
who gets a better deal from knowing
if it’s true you did them.
You can also ask,
“If I were to make a decision now,
what would be the best thing you could do?”
This adds an element of urgency
and sparks in the seller’s mind the fear of losing the deal.
At times, you can also ask:
“Are you telling me that you have never sold this item
for a lower price to someone else?
Has no one ever bought this item at a lower price?”
Whenever you ask this kind of direct question,
the respondent will feel almost obligated to tell you honestly
if they have ever sold the item for a lower price.
When buying an item at a retail store,
you can ask: “Is this on sale?”
Most of the year retail stores have special discounts
based on certain conditions.
When they tell you that this product usually has a spring sale,
you can answer them:
“Wow, so I missed the last sale,
but I want to buy it at that price today. .”
all you need to do is give the seller a compelling reason
why they should sell you a better price,
and they will most likely change their mind.
Strategy 3: Affirmation
No matter what the other person tells you the price of a particular item,
please replied immediately,
“I can buy it elsewhere for less.”
In doing so,
they will most likely become flexible
and lower the price for you.
An affirmative answer like the one above often knocks down price resistance
because at this point the seller is afraid
you will leave and go elsewhere.
Remember, stay friendly and peaceful,
even when conducting this type of negotiation.
When you ask in a pleasant tone,
it’s easier for the other person to give in than
when you’re serious or sloppy.
Strategy 4: Bid low
When a seller asks for $100,
offer a lower price:
“I’ll pay you $50 right now.”
Every time you talk about instant cash,
the opponent’s price resistance will decrease significantly.
There are many reasons why an all-cash offer makes people more open
to doing business with you.
Of these, the most obvious are the following three reasons:
reduced storage costs,
no credit card fees charged by the seller,
and a feeling of “instant gratification”.
As another example,
let’s say you offer $50 for a $100 item
and the seller usually returns $60.
You often find
that even though your offer sounds ridiculous,
the seller is still willing to sell you for much less
than you thought you would pay.
Strategy 5: Small extras
Small add-ons are additional offers.
You say something like:
“Okay, I will agree to this price if you do free shipping.”
If the other party is hesitant about adding a clause to the deal,
you can say in a soft voice,
“If you don’t ship for free,
then I don’t want the deal.”
Here’s the key to making effective tactical use of little extras.
Please agree to buy the main course.
Agree on price and terms.
Act as if the deal is closed.
The seller will think that
they have sold the item for the desired price.
Then add additional requests.
This tactic works
even if the item you are buying is a house,
or a yacht.
Lessons from buying a house
You agree to buy a house for a certain price.
You’ve set a purchase price and move-in date,
but before you sign any paperwork,
ask the seller for extra furniture,
and a lawn mower,
all included in the price show.
You will be amazed at what you get.
After the real estate market weakened,
a friend of mine bought a house that was valued at $2.4 million.
After six months of negotiation,
the couple finally agreed to sell the house for $1 million,
just to get rid of the house and its maintenance costs.
Then my friend,
a brilliant negotiator, said,
“Of course, this price includes all furniture and artwork, right?”
As it happens,
the house is fully furnished with furniture
and artwork worth more than $100,000.
Owners are desperate to sell their homes
and also realize that they have nowhere to keep their belongings.
At that time,
they agreed to leave my friend everything he offered,
even though they had to sell the house
for a much lower price than they had hoped.
People do not care how much you know
until they know how much you care. – Teddy Roosevelt