negotiation 101
DESCRIPTION
When to stick firm and when to negotiate.TRANSCRIPT
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Negotiation 101: When to stick firm
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Mira ZasloveDirector of Sales. Enjoys negotiating and learning new things. Currently lives in Silicon Valley with husband and baby daughter.
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When to negotiate and
when to stick firm
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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
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VARIABLE1: AlternativesAre you dealing with a rare item or everyday commodity?
The party with the best alternative option has the leverage.
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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.
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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.
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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.
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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:
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VARIABLE 2: TIMEFRAMEUnderstand when you and your counterparty need to complete the deal.
The party with more time flexibility has the leverage.
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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.
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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:
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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.
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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
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AND
Negotiate when you have leverage
Stick firm when you are weaker.