• SumoMe

While most people will never have the opportunity to negotiate something as important as the Treaty of Versailles (pictured), we do negotiate in our everyday lives–even though we might not know it. Going to the store and buying an item is the most common form of unknown negotiation. The prices of goods in a store are mere offers by contract law, and the purchase of those goods acts as an acceptance of that offer. Technically, a negotiation occurred right before your eyes, however, you likely wouldn’t know it.

Other negotiations are more obvious, such as a teenager pleading with his/her parents to stay out an hour later, or dealing with a pesky car salesperson who keeps trying to force every last penny out of you. For most people, these opportunities are avoided like a plague, and they would rather get taken advantage of if only it means avoiding the confrontation.

Learning to negotiate properly is an extremely useful skill to acquire. A proper negotiation should always maintain a level of respect between the parties, contain explanations of each side’s mentality, and lead to an agreement that is mutually beneficial.

Maintaining a level of respect is the first key in negotiating successfully. When you begin a negotiation, always start off with a respectful comment. “I want to use your talents because…” or “I like this car because…” can go a long way with creating a sense of mutual respect. Without respect, a negotiation will quickly deteriorate. This is especially true when both parties enter into the negotiation for mutual benefit.

After you lay the appropriate groundwork for respect, go ahead and lay out your position on the matter. Tell the other side how much you’re willing to pay, what you’re willing to do, or what you want from the other side. Laying this out up front is the best way to show that you are open to a negotiation and aren’t merely wasting time. However, this takes some skill because you might not want to show your cards yet. In a case where you need to expose some potentially confidential information, find a way to either frame it so that you don’t give away all the details, or don’t mention it at all. This is much easier said than done.

For example, if you are willing to buy something for up to $10,000 you obviously wouldn’t start out the talk with “I’ll pay up to $10,000” unless you are totally desperate or you know that’s the only way the deal will work (this is unlikely). Instead, start out by saying something to the extent of “I really want to stay around the $8,000-9,000 range.” This is both true and helpful. If you start out by saying “I’ll pay you $3,000 for that $10,000 object” then the other side will immediately know you aren’t serious and will likewise ask for $20,000. This is not helpful, although it is very common. It is a much better strategy to start with a respectable offer and make small concessions than it is to start with an outrageous offer and make large concessions.

Lastly, a negotiation should result in a mutually-beneficial deal to both parties. The salesperson would rather make a little profit than see you walk out the door–always keep that in mind. Most high-dollar items are excessively marked up and designed to allow for some wiggle room for negotiation. If the $10,000 item cost the seller $8,000 when they bought it wholesale, if you offer $9,000 or walking away, most prudent businessmen would take the $1,000 profit rather than see you walk out of the room. This deal is mutually beneficial to you, as it is within your range of desired prices, and it benefits the seller because he was able to profit from the negotiation as well.

Most buyers feel they have no power to negotiate against the prices set in the store. Remember, money (especially to retailers) is a very powerful leverage tool that you should use to benefit your position. Always know your strong points and how to use them as leverage. Always know your weak points and how to minimize their importance.