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. [1] X Research source 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.
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 (just not as much).
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.
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 an 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 bouncing, credit card declined).
If you are representing someone else in a negotiation, get your client’s agreement for a target deal in writing beforehand. Otherwise, when you negotiate deal, and they decide that they don’t like it after all, your credibility is the one that takes the hit. Proper preparation can avoid this from happening.
A hostage negotiator, for example, isn’t offering anything special, and needs the hostages more than the abductor needs the hostages. For this reason, being a hostage negotiator is very hard. In order to compensate for these deficiencies, the negotiator must be good at making small concessions seem big, and turn emotional promises into valuable weapons. A rare gem vendor, on the other hand, has something that is rarely found in the world. She doesn’t need a particular person’s money — only the highest amount of money, if she’s a good negotiator — but people want her particular gem. This puts her in excellent position to extract extra value from the people she’s negotiating with.
If you’re negotiating someone else’s life, your proposals need to be reasonable right off the bat; you don’t want to risk someone’s life. The downside of starting off aggressive is just too much. If, however, you’re negotiating your starting salary, it pays to start off asking for more than you expect to get. If the employer agrees, you’ve gotten more than you asked for; if the employer negotiates you down to a lower salary, you’re heightening the impression that you’re being “bled,” thereby increasing your chances of securing a better final salary.
