I absolutely love a good negotiation.\u00a0 It\u2019s one of the building blocks for basic economics!\u00a0 In order for an exchange to happen between two parties, they must first agree on a price.\u00a0 If a proposed price is unacceptable for one party, the exchange will not happen.\u00a0 With this in mind, you can still feel good when you talk down a price somewhere because they wouldn\u2019t sell it unless they\u2019re going to benefit from it in some way.<\/p>\n
I was in a local hamburger \u2018hole-in-the-wall\u2019 earlier this year and had the chance to negotiate for my lunch.\u00a0 Now, usually I don\u2019t make a fuss and offer someone a lower price than what\u2019s on the menu, but they had just duplicated a two-cheeseburger order, which would normally cost a little over $4.00.\u00a0 I could hear the manager talking and she looked a little frustrated.\u00a0 These two cheeseburgers were about to go to waste.\u00a0 Knowing I should probably act fast, I said, \u201cWould you take $2.00 for the cheeseburgers.\u201d\u00a0 A little surprised, she thought for a second and said, \u201csure, it\u2019s better than me eating them.\u201d<\/p>\n
I saved 50% on something because of a simple negotiating tactic \u2013 ask for a lower price. <\/strong>You really never know unless you ask, which is key to a good negotiation.<\/p>\n That was a pretty unique situation that probably won\u2019t happen again for a while.\u00a0 But for more common negotiation, there are skills that you can and should be familiar with so that you can get the very best deal possible.<\/p>\n What\u2019s an anchor?\u00a0 Think about it like this: I have a pen for sale at a price of $2.00.\u00a0 I can go lower, but you\u2019re not sure how much.\u00a0 If you offer me $1.50, you\u2019ve set your anchor and cannot go any lower.\u00a0 It\u2019s important to set your anchor at a price that makes me pull it upward.\u00a0 I might have taken $1.30 for it, but now I\u2019ll probably counter with $1.75 \u2013 a good price for both of us, but you could have done a little better with a good anchor.<\/p>\n In most negotiations, you are your only advocate.\u00a0 One of the best pieces of advice is to not negotiate against yourself!\u00a0 Wait until the other party offers a concession before making another offer that cheapens your end of the deal.\u00a0\u00a0 Keep quiet and really let the offer sink in.\u00a0 Make it awkwardly silent and let the other person be the one to say something after the silence.\u00a0 This will help you to find your absolute best deal.<\/p>\n The worst time to go into a negotiation is when you are stuck between a rock and a hard place.\u00a0 If you have even one alternative, you can create a better negotiating environment.\u00a0 For example, if you want to buy my pen for $1.00, but I won\u2019t sell it, your alternative might be to use the pencil that you already have.\u00a0 It sounds simple, but it\u2019s crucial for a good outcome.\u00a0 Academics call this your BATNA \u2013 B<\/strong>est A<\/strong>lternative T<\/strong>o a N<\/strong>egotiated A<\/strong>greement.\u00a0 It\u2019s your fallback, and you need to make sure you know what it is before you jump into a negotiation.<\/p>\n Do you know why stores always seem to have special package deals that catch your attention?\u00a0 It\u2019s because you think you\u2019re getting a better deal \u2013 and sometimes you actually are.\u00a0 Don\u2019t let the manufacturers be the only one to win with this strategy.\u00a0 You can do just as well with it.\u00a0 Try it at the next garage sale you go to.\u00a0 When you see a few things that you really want, try to first talk down the price of one item.\u00a0 When you have an idea of what they\u2019ll discount something for, try to bundle them together and apply the same discount.\u00a0 It\u2019s easier to negotiate for a bunch of items than to stand and talk down multiple things.<\/p>\n This can be the most challenging because it involves the most psychology.\u00a0 You both might be getting a great deal, but if your approach to the negotiation is \u2018all about me,\u2019 the other person might feel slighted and refuse to do business with you again.<\/p>\n Always try to create a WIN-win situation.\u00a0 I made the first WIN large because you want to be on the side with the bigger win :).\u00a0 When the other person feel that they\u2019re getting a good deal, they\u2019re more likely to work with you again in the future \u2013 which means a greater chance of even more good deals for you.\u00a0\u00a0 You don\u2019t want to burn the bridge you spent so much time building!<\/p>\n Negotiating is really an art form and takes patience.\u00a0 If you can incorporate some of these suggestions to your approach, you will start to see some improvement.\u00a0 Don\u2019t expect them to work for every situation.\u00a0 You\u2019ll just need to practice and try your best until you feel more comfortable with a negotiation.<\/p>\n During my MBA, we actually had an entire class dedicated to negotiations.\u00a0 A lot of these principles are the same that you\u2019d learn if you wanted to get an online negotiations degree<\/a>.\u00a0 Learn these tips and you\u2019ll become a better negotiator guaranteed!<\/p>\nSet your anchor.<\/h2>\n
Keep quiet!<\/h2>\n
Know your backup plan.<\/h2>\n
Create a package deal.<\/h2>\n
Let them \u2018win.\u2019<\/h2>\n