Reply stu AFrom my experience, bargaining over electronic appl.docx

Reply stu A:
From my experience, bargaining over electronic appliances in
stores has not been a common practice in most of the stores
which sell these items in the United States. Normally, most
people purchase these electronics at the prices which are
indicated in the price tags and it that has remained to be the
norm. people presume that the prices which have been indicated
in the price tags are the least-most which the store could offer
but fail to understand that the stores still want to make sales and
cannot easily dismiss a customer who haggles for the price to be
reconsidered by a minimal percentage. In the market, there are
many vendors who sell electronic appliances and the
salespeople in every store understand this. Therefore, they will
not dismiss a customer who bargains as long as the price they
offer is still profitable to them. Therefore, from my experience,
I feel that bargaining over electronic appliances in electronic
stores will become normal and widespread in the United States
in the future. One of the contributing factors is that recent
buyers have more knowledge and information on the range of
specific prices of electronic appliances due to the high
information availability provided online. Therefore, they have a
price reference on the price range of their favorite phone,
television or laptop even before they visit the store. The
negotiation was handled from an information-rich point of view
and prior price investigation for the common goods which gives
the negotiator the confidence and basis of haggling with the
vendor. Further, the presence of competition in the market also
gives the buyer an added advantage when haggling and in this,
the negotiation will be handled with much understanding and
compromise.
Stu B:
Hello everyone

As the market continues to change, more and more products,
different prices, different product advantages. Many companies
want to create more profits by saving costs. In life, we will also
save our own expenses by bargaining. “By knowing prices
before you go into a store, you don’t need to haggle,”
In my experience, bargaining is divided into two types, one is
the price reduction, while the quality remains the same, the
other is the price reduction, and the quality is also lowered.
First, the best way to bargain on the price is to conduct a survey
of the collection before the purchase, try to find his reserve
price and cost price, which will be more active in your
communication and negotiation with others. Now the network is
very developed, and the price of many related products can be
compared through a web search, find the cost price or find the
market price of the supplier. Second, when buying, you are not
in a hurry to reach direct cooperation. You can shop around and
look for other suppliers to consult prices. Due to the
competitive relationship in the same industry, we can try to get
the price of one and then lower the price by 20%. Business. In
my work and life, I often use this method to get a lower price
product for the company. Third, to provide businesses with a
long-term cooperation vision, so that to a certain extent, get the
price below the market price, just like the wholesale price.
On the other hand, cost reduction will also lead to low quality,
but this will not affect your normal use. Because of a lot of
products and projects in life, we will pay more money, in terms
of providing convenient services, or brand value, in fact, the
money can be omitted. For example, many people choose the
LV brand when purchasing a wallet, but as far as I know, the
wallet of the luxury brand of LV is not leather, and the cost is
very low. Most of people's consumption is used in this brand
value. Relative to a few hundred dollars of wallet, we can
choose the same function of Levi's wallet, and many of Levi's
wallets are leather, the price is also about 30 dollars. The same
is true for buying a car. Many cars use a lot of multimedia and
technology experiences as a gimmick to raise prices. In fact,

when driving a car normally, 80% of the cool multimedia
features are not available. Therefore, when buying things, we
must first recognize what we really need and the core use and
then reposition our purchase needs, which can save a lot of
money.
Vanessa Richardson. 2011. 7 ways to haggle for the best
bargain. https://www.bankrate.com/personal-finance/smart-
money/7-ways-to-haggle-for-the-best-bargain/
For Price Negotiators, Preparation is the Key to Success
Effective price negotiators work not only to create value, but
also to claim value. To claim the
biggest slice of the pie in retail and other price negotiations,
brush up on your haggling skills.
Some cultures have a long tradition of haggling—bargaining
back and forth about the price of an
item—in markets and bazaars. By contrast, in the United States
and many other countries, haggling
between buyers and sellers is an under-practiced skill. You
might routinely pass up opportunities to
haggle in situations where financial negotiations are not the
norm because you’re afraid of offending
the seller or because you feel inexperienced or uncomfortable.
When you do so, you’re likely passing up chances to save

money. A May 2009 Consumer
Reports poll found that among American price negotiators who
tried to negotiate discounts in the
previous six months, 83% succeeded in getting lower hotel
rates, 81% got better deals on clothing
and cell phone service, 71% negotiated cheaper electronics and
furniture, and 62% lowered their
credit-card fees.
The following tips will help you become a better price
negotiator.
1. Take the Negotiation Seriously.
We tend to assume that “small” negotiations—for a new TV, for
example—don’t warrant the type of
thorough preparation that we conduct for business deals at
work, but that’s incorrect. If you aren’t
ready to negotiate, you could sacrifice more value than
necessary or pass up on a good deal. It pays
to apply your business negotiation skills to your current
challenge.
Wise price negotiators begin with a thorough consideration of
their BATNA, or best alternative to a
negotiated agreement—the action they’ll take if a particular
negotiation ends in impasse. In the case

of a television, your BATNA might be a low, no-haggle price
from an online retailer or it might be to
repair your current TV.
Knowing what you will do if you can’t get a good deal will give
you bargaining power during the
negotiation that follows. Your BATNA also helps you calculate
your reservation price—for the seller in
a price negotiation, the most you’d be willing to bid—as well as
your negotiation goals, or the deal you
are hoping to get.
Assess the other party’s reservation price and BATNA as well
by conducting online research and
studying store policies concerning discounting, returns, and
warranties. In the store, inventory tags
often indicate how long an item has been on the shelves.
Salespeople may be more willing to haggle
over merchandise that has been sitting on the floor a long time,
notes Consumer Reports.
2. Establish the Right Setting and Tone.
Consumer Reports advises price negotiators to haggle early or
late in the day, when stores are often
quiet, and late in the month, when salespeople may be
especially eager to meet quotas. At chain

stores, where regular sales staff may not have the power to
haggle, you might need to approach a
manager.
Open negotiations out of earshot of other customers,
recommends Consumer Reports, as sales staff
may not want others to get wind of your haggling. Bring along
up-to-date information about
competitors’ prices and be prepared for the salesperson to verify
it.
https://www.pon.harvard.edu/daily/business-negotiations/brad-
pitt%E2%80%99s-negotiation-nightmare/
https://www.pon.harvard.edu/daily/dealmaking-daily/enhancing-
your-deal-in-business-negotiations/
https://www.pon.harvard.edu/daily/batna/translate-your-batna-
to-the-current-deal/
https://www.pon.harvard.edu/daily/business-
negotiations/managers-think-twice-before-setting-negotiation-
goals/
Be polite and cordial throughout the negotiation process, and
also be willing to accept no for an
answer. Finally, because stores typically pay fees on credit-card
purchases, keep in mind that
salespeople may be more willing to bargain if you offer to pay
in cash.
3. Beware Tricky Tactics.

If you’ve done your homework, you should be in a good
position to negotiate. But first, you may need
to determine whether negotiation is even possible.
“I can buy this TV online this weekend at a much lower price,”
you might say after talking to a
salesperson about the features of the item you desire in a
showroom. “Can we work together toward
a more competitive deal?”
If the salesperson is willing to negotiate, and if you have a
strong sense of the zone of possible
agreement, or ZOPA, you have entered the realm of haggling—
the dance of concessions that follows
each party’s first offer. Keep your BATNA at the forefront of
your mind. Knowing that you have a good
alternative will help you stay calm and rational as a price
negotiator.
Experienced price negotiators tend to extend the time between
their concessions in the hope that you
will grow nervous and make a better offer before they need to
reciprocate. But it would be a serious
mistake for you to make an unreciprocated concession. Wait out
stalling tactics, and insist on
receiving a concession in return for one of your own. If no

concession is forthcoming, thank the
salesperson and prepare to leave. Your imminent departure
could inspire a counteroffer; if not, you
should feel comfortable turning to your BATNA.
Finally, although price might be the most important issue at
stake, you could sweeten the deal for
both sides by discussing other issues, such as delivery,
financing, and the possibility of repeat
business. By accepting tradeoffs on such issues, you could get a
better price.
BY KATIE SHONK — ON MAY 8TH, 2017 / DEALMAKING
Program on Negotiation
3 TYPES OF CONFLICT AND HOW TO ADDRESS THEM
Different types of conflict — including task conflict,
relationship conflict, and value conflict—
can benefit from different approaches to conflict resolution.
In the workplace, it sometimes seems as if conflict is always
with us. Miss a deadline, and you are
likely to face conflict with your boss. Lash out at a colleague
who you feel continually undermines

you, and you’ll end up in conflict. And if you disagree with a
fellow manager about whether to
represent a client whose values you disdain, conflict is also
likely.
In particular, three types of conflict are common in
organizations: task conflict, relationship conflict,
and value conflict. Although open communication,
collaboration, and respect will go a long way
toward conflict management, the three types of conflict can also
benefit from targeted conflict-
resolution tactics.
Task Conflict
The first of the three types of conflict in the workplace, task
conflict, often involves concrete issues
related to employees’ work assignments, and can include
disputes about how to divide up resources,
differences of opinion on procedures and policies, managing
expectations at work, and judgments
and interpretation of facts.
Of the three types of conflict discussed here, task conflict may
appear be the simplest to resolve. But
task conflict often turns out to have deeper roots and more
complexity that it appears to have at first

glance. For example, coworkers who are arguing about which
one of them should go to an out-of-
town conference may have a deeper conflict based on a sense of
rivalry.
Task conflict often benefits from the intervention of an
organization’s leaders. Serving as de facto
mediators, managers can focus on identifying the deeper
interests underlying parties’ positions. This
can be done through active listening, which involves asking
questions, repeating back what you hear
to confirm your understanding, and asking even deeper
questions aimed at probing for deeper
concerns. Try to engage the parties in a collaborative problem-
solving process in which they
brainstorm possible solutions. When parties develop solutions
together, rather than having an
outcome imposed on them, they are more likely to abide by the
agreement and get along better in the
future.
Relationship Conflict
The second of our three types of conflict, relationship conflict,
arises from differences in personality,
style, matters of taste, and even conflict styles. In

organizations, people who would not ordinarily
meet in real life are often thrown together and must try to get
along. It’s no surprise, then, that
relationship conflict can be common in organizations.
Suppose you’ve felt a long-simmering tension with a colleague,
whether over work assignments,
personality differences, or some other issue. Before turning to a
manager, you might invite the
colleague out to lunch and try to get to know him or her better.
Discovering things you have in
common—whether a tie to the same city, children the same age,
or shared concerns about problems
in your organization—may help bring you together.
If you feel comfortable, bring up the source of the tension and
focus on listening to the other person’s
point of view. Resist the urge to argue or defend your position.
When you demonstrate empathy and
https://www.pon.harvard.edu/daily/conflict-resolution/conflict-
resolution-strategies/
https://www.pon.harvard.edu/daily/conflict-resolution/a-
creative-approach-to-breaking-impasse/
https://www.pon.harvard.edu/daily/conflict-resolution/a-
creative-approach-to-breaking-impasse/
https://www.pon.harvard.edu/daily/conflict-resolution/how-to-
manage-conflict-at-work/

interest, he or she is likely to reciprocate. If conflict persists or
worsens, enlist the help of a manager
in resolving your differences.
Value Conflict
The last of our three types of conflict, value conflict, can arise
from fundamental differences in
identities and values, which can include differences in politics,
religion, ethics, norms, and other
deeply held beliefs. Although discussion of politics and religion
is often taboo in organizations,
disputes about values can arise in the context of work decisions
and policies, such as whether to
implement an affirmative action program or whether to take on
a client with ties to a corrupt
government.
According to MIT professor Lawrence Susskind, disputes
involving values tend to heighten
defensiveness, distrust, and alienation. Parties can feel so
strongly about standing by their values
that they reject trades that would satisfy other interests they
might have.
Susskind recommends that instead of seeking to resolve a
values-based dispute, we aim to move

beyond demonization toward mutual understanding and respect
through dialogue. Aim for a cognitive
understanding in which you and your coworker reach an
accurate conceptualization of one another’s
point of view. This type of understanding doesn’t require
sympathy or emotional connection, only a
“values-neutral” ability to describe accurately what someone
else believes about the situation, write
Robert Mnookin, Scott R. Peppet, and Andrew S. Tulumello in
Beyond Winning: Negotiating to Create
Value in Deals and Disputes(Harvard University Press, 2004).
In addition, you may be able to reframe a values-based dispute
“by appealing to other values that you
and your counterpart share,” writes Susskind in an article in the
Negotiation Briefings newsletter,
“including universal beliefs such as equal rights or nonviolence,
rather than focusing on the
differences in beliefs that precipitated the dispute.”
What types of conflict seem to be most prevalent in your
organization?
BY KATIE SHONK — ON JULY 3RD, 2017 / CONFLICT
RESOLUTION

WHY IT PAYS TO HAGGLE
Adapted from “Master the Art and Science of Haggling,” first
published in the Negotiation
newsletter, August 2009.
Businesses that never would have considered negotiating with
customers before the global
economic crisis are now willing, even eager, to make a deal.
Just like the prices of houses, cars,
and other big-ticket items, the prices of furniture, electronics,
wine, jewelry, and other “medium-
ticket” goods are now frequently up for discussion. The ancient
art of haggling-the back-and-
forth dance of offers and concessions between buyer and seller
– is making a comeback.
In some cultures, a long tradition of haggling in markets and
bazaars flows naturally into brick-
and-mortar stores. By contrast, in the United States and many
other countries, haggling between
buyers and sellers is an under-practiced art, typically employed
only in negotiations for cars and
real estate. As a consequence, many Westerners have an
aversion to haggling, especially in

contexts where negotiation is not the norm. You might routinely
pass up opportunities to haggle
because you’re afraid of offending the seller or because you feel
inexperienced or uncomfortable.
But you’re probably passing up chances to save money. A May
2009 Consumer Reports poll
found that 66% of Americans had tried to negotiate discounts in
the previous six months. Of
these hagglers, 83% succeeded in getting lower hotel rates, 81%
got better deals on clothing and
cell phone service, 71% negotiated cheaper electronics and
credit-card fees.
If the potential financial benefits aren’t enticing enough, look at
haggling as a chance to improve
your negotiation skills in a relatively low-risk context. The
price cut you negotiate at a chain
store for a washing machine could make you feel more
confident in your next heavy-hitting
workplace negotiation. (And you can haggle on your company’s
behalf, of course, whether for
lower rent, travel expenses, or office supplies.)
In addition, many sellers are hurting these days. When faced
with a choice between haggling

with you or losing you as a customer, many will gladly accept
the challenge. Similarly, lenders
and landlords may be willing to renegotiate existing contracts to
keep good customers or tenants
who are struggling financially due to layoffs and pay cuts.
MAKING THE FIRST MOVE
Posted By PON_Staff On November 24, 2009 @ 1:08 pm In
Business Negotiations Daily,
Adapted from “Should You Make the First Offer?” by Adam D.
Galinsky (Professor,
Northwestern University). First published in Negotiation
Newsletter.
Whether negotiators are bidding on a firm, seeking agreement
on a compensation package, or
bargaining over a used car, someone has to make the first offer.
Should it be you, or should you
wait to hear what others have to say? How will the first offer
influence the negotiation process
and any final agreement?

Research into human judgment has found that how we perceive
a particular offer’s value is
highly influenced by any relevant number that enters the
negotiation environment. Because they
pull judgments toward themselves, these numerical values are
known as anchors. In situations of
great ambiguity and uncertainty, first offers have a strong
anchoring effect—they exert a strong
pull throughout the rest of the negotiation.
Anchoring research helps clarify the question of whether to
make the first offer in a negotiation:
by making the first offer, you will anchor the negotiation in
your favor. In fact, researchers
Adam Galinsky and Thomas Mussweiler have shown that
making the first offer affords a
bargaining advantage. In their studies, they found that the final
outcome of a negotiation is
affected by whether the buyer or the seller makes the first offer.
Specifically, when a seller
makes the first offer, the final settlement price tends to be
higher than when the buyer makes the
first offer.
Galinsky’s research also shows that the probability of making a
first offer is related to one’s

confidence and sense of control at the bargaining table. Those
who lack power, either due to a
negotiation’s structure or a lack of available alternatives, are
less inclined to make a first offer.
Power and confidence result in better outcomes because they
lead negotiators to make the first
offer. In addition, the amount of the first offer affects the
outcome, with more aggressive or
extreme first offers leading to a better outcome for the person
who made the offer. Initial offers
better predict final settlement prices than subsequent
concessionary behaviors do.
There is one situation in which making the first offer is not to
your advantage: when the other
side has much more information than you do about the item to
be negotiated or about the
relevant market or industry. For example, recruiters and
employers typically have more
information than job candidates do; likewise, buyers and sellers
represented by a real estate agent
often are privy to more information than unrepresented buyers
and sellers are. This doesn’t mean
you should sit back and let the other side make the first offer.
Rather, this is your opportunity to

level the playing field by gathering more information about the
item, the industry, or your
opponent’s alternatives to the negotiation. The well-prepared
negotiator will feel confident about
making the first offer and anchoring the negotiation in his
favor.
BEST BUY AND SHOWROOMING: IF YOU CAN’T BEAT
THEM, SHOW THEM
By Christopher Krywulak
[2]
Back in March, Mobile Commerce Daily reported Best Buy
hired former Starbucks CIO Stephen
Gillett
[3]
to strengthen its mobile strategy. The rationale was clear: The
retailer needs to shore up

the digital side of its business to better compete with online
retailers such as Amazon who have
been using Best Buy as a showroom for some time.
A month later, on April 10, Best Buy CEO Brian Dunn resigned,
leading Forbes’ Bruce Upbin to
write, “Best Buy could have been the best-run electronics dealer
in the world and it would still be
going out of business.”
Why did people stop shopping at Best Buy?
Best Buy’s competitive advantages are gone, Mr. Upbin wrote.
Service and repair are not what
they used to be – and competitors such as the Apple Store now
outdo Best Buy in that
department. More importantly, price is transparent, so people
will buy the same products online
at a lower price.
The rate at which consumers started buying electronics online
has been inversely proportional to
Best Buy’s profits.
Two weeks ago, ReadWriteWeb published stats documenting the
divergent growth curves
experienced by Best Buy and Amazon over the past 15 years.
These stats illustrate just how comfortable consumers have

become with ecommerce – not to
mention how online retailers have improved their customer
service – free shipping, easy returns
and exchanges – over time.
Shopping via smartphone: The growing threat of
“showrooming”
Last holiday season, Amazon launched its Price Check mobile
app. The retailer promoted its app
by granting users a $5 discount off any product if they used the
app in-store.
Suddenly “showrooming” – where consumers check out
products in-store only to buy them
cheaper online – could be done on a smartphone, instantly.
Traditional retailers were outraged by Amazon’s Price Check
app, calling it unfair and anti-
competitive.
In January, Target wrote an urgent letter to vendors, suggesting
they create special products to
help differentiate it from online competitors.
But the Targets and the Best Buys will not get special treatment
from vendors. Consumers have
moved away from a dependence on physical stores.
http://www.iqmetrix.com/

http://www.mobilecommercedaily.com/2012/03/12/best-buy-
hires-starbucks-cio-responsible-for-mobile-successes
http://www.mobilecommercedaily.com/2012/03/12/best-buy-
hires-starbucks-cio-responsible-for-mobile-successes
The future of retail is an “omni-channel” experience, which
means selling to consumers on all
channels –online, mobile and in-store – simultaneously.
Retailers such as Best Buy must evolve to offer omni-channel
experiences or they will be left
behind.
But wait. Best Buy is now embracing showrooming?
Just when we thought Best Buy would just be focusing on
mobile/omni-channel strategy, having
hired former Starbucks CIO Stephen Gillett, a new report from
Tom Webb of the Pioneer Press
indicates the company is fine with its role as a showroom for
retailers.
Mr. Webb quoted Best Buy’s former chief marketing officer,
Barry Judge, who said the
company actually makes more money from manufacturers –
paying to put their products on the
floor – than it does from consumers.
If this is the case, then what is to stop manufacturers from
creating their own stores and

showcasing their products the way they want?
Amazon, for instance, is beginning to open physical stores in an
attempt to get more Kindle
tablets in consumers’ hands. And we all know how well Apple’s
done with its own branded
stores.
The fact is – and Best Buy has apparently accepted it –
showrooming is not going away.
Retailers must embrace that consumers might come to their
stores with the intention of
showrooming. At that point, it is up to the retailer to deliver a
superior experience so these
people actually buy and come back.
Smaller retailers are better placed to develop a relationship with
the customer and assume less of
an overhead risk than Best Buy.
In the end, all bricks-and-mortar retailers must evolve to
overcome showrooming or they will get
left behind.
Christopher Krywulak is president/CEO of iQmetrix
[2]
, Vancouver, British Columbia, Canada.

Reach him at [email protected]
[4]
.
Article printed from Mobile Commerce Daily:
http://www.mobilecommercedaily.com
http://www.iqmetrix.com/
mailto:[email protected]
NEGOTIATION PREPARATION CHECKLIST
Our negotiation preparation checklist will position you to
prepare as thoroughly as necessary
to create value and claim value in your next important business
negotiation.
Without a doubt, the biggest mistake that negotiators make—
and one that many make routinely—is
failing to thoroughly prepare. When you haven’t done the
necessary analysis and research, you are
highly likely to leave value on the table and even to be taken
advantage of by your counterpart. A
negotiation preparation checklist can help you avoid this
scenario by helping you think through your

position, the other party’s position, and what might happen
when you get together.
Of course, business negotiations are highly unpredictable. Some
of your prep work won’t turn out to
be relevant, and new issues and problems will crop up and
demand your attention. But having a solid
understanding of what’s at stake and where each side is coming
from will help you think on your feet.
Consult our Negotiation Preparation Checklist before any
important negotiation—and be sure to
answer each question completely.
Negotiation Preparation Checklist
Analyzing Your Perspective
1. What do I want from this negotiation? List short-term and
long-term goals and dreams related
to the negotiation.
2. What are my strengths—values, skills, and assets—in this
negotiation?
3. What are my weaknesses and vulnerabilities in this
negotiation?
4. Why is the other party negotiating with me? What do I have
that they need?

5. What lessons can I apply from past negotiations to improve
my performance?
6. Where and when should the negotiation take place?
7. How long should talks last? What deadlines are we facing?
8. What are my interests in the upcoming negotiation? How do
they rank in importance?
9. What is my best alternative to a negotiated agreement, or
BATNA? That is, what option would I
turn to if I’m not satisfied with the deal we negotiate or if we
reach an impasse? How can I
strengthen my BATNA?
10. What is my reservation point (walkaway)—my indifference
point between a deal and no deal?
11. What is my aspiration point in the negotiation—the
ambitious, but not outrageous, goal that I’d
like to reach?
12. What are the other side’s interests? How important might
each issue be to them?
13. What do I think their reservation point and BATNA may be?
How can I find out more?
14. What does their BATNA mean in terms of their willingness
to do a deal with me? Who has

more power to walk away?
https://www.pon.harvard.edu/daily/negotiation-skills-
daily/what-is-negotiation/
https://www.pon.harvard.edu/daily/negotiation-skills-
daily/resolve-conflict-by-asking-the-right-questions/
15. Is there a zone of possible agreement (ZOPA) between my
reservation point and the other
side’s? If there clearly is no room for bargaining, then there’s
no reason to negotiate—but don’t
give up until you’re sure. You may be able to add more issues
to the discussion.
16. What is my relationship history with the other party? How
might our past relationship affect
current talks?
17. Are there cultural differences that we should prepare for?
18. To what degree will we be negotiating electronically? Are
we prepared for the pros and cons of
negotiating via email, teleconference, etc.?
19. In what order should I approach various parties on the other
side?
20. What is the hierarchy within the other side’s team? What are
the patterns of influence and
potential tensions? How might these internal dynamics affect

talks?
21. What potential ethical pitfalls should we keep in mind
during the negotiation?
22. Who are my competitors for this deal? How do our relative
advantages and disadvantages
compare?
23. What objective benchmarks, criteria, and precedents will
support my preferred position?
24. Who should be on my negotiating team? Who should be our
spokesperson? What specific
responsibilities should each team member have?
25. Do we need to involve any third parties (agents, lawyers,
mediators, interpreters)?
26. What authority do I have (or does our team have) to make
firm commitments?
27. Am I ready to engage in interest-based bargaining? Be
prepared to try to create value by
trading on differences in resources, preferences, forecasts, risk
tolerance, and deadlines.
28. If we disagree about how the future plays out, can we
explore a contingency contract—that is,
stipulate what will happen if each side’s prediction comes true?
29. What parties not yet involved in the negotiation might also

value an agreement?
30. Have I practiced communicating my message to the other
side? How are they likely to
respond?
31. Does the agenda make room for simultaneous discussion of
multiple issues?
32. Is an agreement likely to create net value for society? How
can we reduce potential harm to
outside parties?
BY KATIE SHONK — ON NOVEMBER 27TH, 2017 /
NEGOTIATION SKILLS
https://www.pon.harvard.edu/tag/interest-based-bargaining/
https://www.pon.harvard.edu/daily/business-
negotiations/contingency-contracts-in-business-negotiations-
agreeing-to-disagree/
https://www.pon.harvard.edu/author/katies5/
https://www.pon.harvard.edu/category/daily/negotiation-skills-
daily/
SO YOU WANT TO BUY A CAR?
Posted By Julia On April 27, 2010 @ 8:22 am In Daily,
Personal Negotiations | Adapted from
“Wheeling and Dealing,” by Guhan Subramanian How can you

negotiate the best possible price
for a new car? This is a common negotiation question, and
naturally so. A car is one of the most
significant purchases you’ll ever make—and the price is almost
always negotiable. Here are a
few tips to improve your performance:
1. Prepare, prepare, prepare. Due to the vast amount of
information available on the Internet,
walking into a car dealership without having done some online
research would be a big mistake.
Online, you typically can find out the actual dealer cost, or
invoice price, of a car—the dealer’s
walk-away point in his negotiation with you. Some Web sites
also allow you to pick the precise
options you want and even tell you what other buyers in your
region are paying for the same car.
(Note that details such as dealer “holdbacks,” or money paid
back to a dealer by the
manufacturer, could prevent you from pinning down the dealer’s
reservation price definitively.)
2. Choose the right process. In the car-buying context, you can
enter a dealership and negotiate
with a salesperson, or you can put out a request for bids on the
Web. One key factor in this

decision is how well you know what you want. If you’ve picked
out a car down to the very last
option, then by all means let the Internet do the haggling for
you. (But beware: some dealers may
tempt you with a lowball price and then try to renegotiate in
person.) If your final decision will
depend on cost, then negotiating face-to-face at a dealership is
probably the better choice.
3. Use the threat of walking away. One middle-ground option
that Richard Zeckhauser and
Guhan Subramanian have identified is a negotiation-auction
hybrid, or negotiauction. Merge the
strategies described above by visiting dealerships to determine
what you want and then hold an
online auction to determine who will give you the best price.
Eventually, of course, you’ll have
to close the deal in person, but this will be a straightforward
encounter if you’ve worked out the
price in advance.
It’s a different matter if issues remain on the table. In private-
equity deals, experienced
negotiators use exclusivity as a bargaining chip, a tactic you can
use when buying a car. Consider

the salesperson’s situation: if you walk out the door without
signing on the dotted line, the deal is
probably dead. Therefore, you can exercise your option to walk
away to extract further
concessions. One buyer recently shopped for a car alone and,
after negotiating a deal, told the
salesperson that he wanted go home and discuss it with his wife.
The salesperson asked what
kind of price reduction the buyer needed to sign the deal right
away. The answer: a $900 price
cut, which the salesperson agreed to after the inevitable
consultation with his manager. Back at
home, the buyer’s wife was thrilled to hear about the final price.
If you still feel stressed about car buying, consider the big
picture: you have lots of alternatives,
but the salesperson’s alternative to a deal with you is forgone
profit. And while you have access
to substantial information about his position, he can estimate
only how much you are willing to
pay.

Even at Megastores, Hagglers Find No Price Is Set in Stone
Aaron Houston for The New York Times
Michael Roskell and a friend persuaded a store to cut $1,000 off
the price of two 46-inch TVs.
By MATT RICHTEL
Published: March 23, 2008
SAN FRANCISCO — Shoppers are discovering an upside to the
down economy. They are getting price
breaks by reviving an age-old retail strategy: haggling.
A bargaining culture once confined largely to car showrooms
and jewelry stores is taking root in major
stores like Best Buy, Circuit Cityand Home Depot, as well as
mom-and-pop operations.
Savvy consumers, empowered by the Internet and encouraged by
a slowing economy, are finding that they
can dicker on prices, not just on clearance items or big-ticket
products like televisions but also on lower-
cost goods like cameras, audio speakers, couches, rugs and even
clothing.
The change is not particularly overt, and most store policies on
bargaining are informal. Some major
retailers, however, are quietly telling their salespeople that

negotiating is acceptable.
“We want to work with the customer, and if that happens to
mean negotiating a price, then we’re willing to
look at that,” said Kathryn Gallagher, a spokeswoman for Home
Depot.
In the last year, she said, the store has adopted an
“entrepreneurial spirit” campaign to give salespeople
and managers more latitude on prices in order to retain
customers.
The sluggish economy is punctuating a cultural shift enabled by
wired consumers accustomed to
comparing prices and bargaining online, said Nancy F. Koehn, a
retail historian at the Harvard Business
School.
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Haggling was once common before department stores began
setting fixed prices in the 1850s. But the shift
to bargaining in malls and on Main Street is a considerable

change from even 10 years ago, Ms. Koehn
said, when studies showed that consumers did not like to
bargain and did not consider themselves good at
it. “Call it the eBay phenomenon,” Ms. Koehn said.
“The recession is helping to push these seedlings to the
surface,” she added. “It’s a real turnabout on the
part of the buyer and the seller.”
John D. Morris, an apparel industry analyst for Wachovia, said
that the ailing economy was not
necessarily forcing all retailers to negotiate. But he says he
believes that when there is an opportunity for
negotiation, the shopper has the upper hand.
“This is one of the periods where the customer is empowered,”
Mr. Morris said. “The retailer knows that
the customer is enduring tough times — and is more willing to
be the one who blinks first in that stare-
down match.”
While tough times give people more incentive to change their
behavior, it is the wealth of information
about products made available on the Internet that gives
consumers the know-how to try it. People now
can quickly amass information on product availability and
pricing, helping them develop strategies to get

the best deal.
Michael Roskell, 33, a technology project manager from Jersey
City, N.J., said he and a friend from high
school periodically visit electronics stores. While Mr. Roskell
expresses interest in buying an item, his
friend acts as though he is dissatisfied with the price and
threatens to leave.
“We play good cop, bad cop,” Mr. Roskell said.
In February, he said, the friends got $20 off a pair of $250
speakers at 6th Avenue Electronics in the New
York area. Earlier, he and the same friend negotiated to buy two
46-inch high-definition Sony televisions
at P. C. Richard & Son, a New York-area electronics chain.
List price: $4,300. Price after negotiation: $3,305.50.
“My parents never did this,” Mr. Roskell said. “But once you
get it, you realize there’s a whole economy
built on this.”
The strategy can even work when buying pants. At least it did
for David Achee of Maplewood, N.J., who
said he went to a Polo Ralph Lauren store in the SoHo
neighborhood of Manhattan last month and
became interested in a pair of pants on the clearance rack for

$75. He told the salesperson that he had
seen a similar pair on the Internet for $65, adding that he
thought the pair on the rack looked worn (even
though he did not really think so). He got the pants for around
$50, he said.
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Among his other tactics, he said, he sometimes threatens to
walk out of a store and go to a competitor, as
he did recently to get a price break on a drum set at a music
store. But, mainly, he relies on researching
prices and coming armed with information — prices he finds on
the Internet and in ads from competitors.
“You can negotiate, but you have to do your research,” said Mr.
Achee, who works for thePort Authority of
New York and New Jersey. “When I’m bargaining, I’m
bargaining with information.”
Information from the Internet helped Amber Kendall, 24, and
her husband, Matt, when they shopped for

a camera last October. The couple, who live in Boston, found
the Canoncamera they wanted online for
$350, then used the Internet price to bargain with Ritz Camera,
where the price was $400. Then they used
the Ritz Camera offer to get the same price at Microcenter,
where they preferred the warranty offer.
The technological influences are not just on the consumer side.
Retail industry analysts said corporate
retailers have begun using computer systems that let them do
real-time pricing and profit analysis. Such
systems tell a company what price it can set and still make
money, and they illuminate the trade-off
between lowering prices and raising sales volumes, said Andy
Hargreaves, a retail industry analyst with
Pacific Crest Securities.
Mr. Hargreaves did a little negotiating himself recently. At Best
Buy last November, he bargained down
the price of a 50-inch Samsung plasma television.
“They gave me a number. I gave them another number, and he
gave me a final number,” he said, noting
that he got a $100 price break in addition to the $200 sale
discount. “A lot of people don’t realize you can
go into Best Buy and ask them for a lower price.”

Frederick Stinchfield, 23, was a Best Buy salesman in
Minnetonka, Minn., until last January. He said
about one-quarter of customers tried to bargain. Much of the
time, he said, he was able to oblige them,
particularly in circumstances where a customer buying
electronics (like a camera) also bought an
accessory (like a camera bag) with a higher markup. He said the
cash registers at Best Buy were set up so
that prices could be reset at checkout.
Salespeople and managers had the latitude to drop prices,
though some were more likely to do so than
others.
His advice for bargainer hunters? “If you get denied once, go
looking for someone else who looks nice,”
said Mr. Stinchfield, who now works for the federal government
in Washington. He added: “Come armed
with information, and you will be rewarded.”
Priya Raghubir, a marketing professor at the Haas School of
Business at the University of California,
Berkeley, said that retailers willing to haggle were making a
calculated gamble that acceding to lower
prices means establishing customer loyalty. The retail mantra is
“customer lifetime value,” meaning any

single sale might not be that profitable, but an enduring
relationship with a shopper would be.
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There is just one problem with the theory, Ms. Raghubir said. It
does not prove true over time.
Rather than retaining customers, the rise in haggling is making
shoppers highly price-conscious and loyal
ultimately to the least expensive offer, not to a brand or a
retailer.
Home Depot, among others, begs to differ. Ms. Gallagher, the
company spokeswoman, said that by
allowing salespeople and store managers to make some pricing
decisions, the company was creating a
friendly environment that feels more like a local store than a
monolithic corporate superstore. (She
declined to say how much leeway individual salespeople or
managers have.)
Ms. Raghubir says that retailers are realizing that customers are

going to keep pressing them on price,
because whatever reticence customers had about bargaining has
evaporated.
“In the past, when you tried to get yourself a deal and it was an
embarrassing thing — the kind of thing you
did if you couldn’t afford to pay,” she said. “Now it’s about
being a smart shopper.”
How to Haggle: Successful Bargaining Tips
Practicing your
haggling with a merchant is a sure way to feel like a temporary
local.
After mastering a
few bargaining basics, any traveler can shop with confidence in
Europe's open-air markets.
By Rick Steves
In much of the Mediterranean world, the price tag is only an
excuse to argue. Bargaining is the accepted and expected
method of finding a compromise between the wishful thinking
of the merchant and the tourist. In Europe, bargaining in

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shops is common only in the south, but you can fight prices at
flea markets and with street vendors anywhere. (Note
that bargaining applies to goods, not to food sold at stands or
outdoor produce markets.)
Here are a few guidelines to help you get the best bargain.
Determine if bargaining is appropriate. It's bad shopping
etiquette to "make an offer" for a tweed hat in a London
department store. It's foolish not to at a Greek outdoor market.
To learn if a price is fixed, show some interest in an item
but say, "It's just too much money." You've put the merchant in
a position to make the first offer. If he comes down even
2 percent, there's nothing sacred about the price tag. Haggle
away.
Shop around to find out what locals pay. Prices can vary
drastically among vendors at the same flea market, and even at
the same stall. If prices aren't posted, assume there's a double
price standard: one for locals and one for you. If only
tourists buy the item you're pricing, see what an Arab, Spanish,
or Italian tourist would be charged. I remember thinking

I did well in Istanbul's Grand Bazaar, until I learned my Spanish
friend bought the same shirt for 30 percent less.
Merchants assume American tourists are rich, and they know
what we pay for things at home.
Determine what the item is worth to you. Given prices can be
meaningless and serve to distort your idea of an item's
true worth. The merchant is playing a psychological game.
Many tourists think that if they can cut the price by 50
percent they are doing great. So the merchant quadruples his
prices and the tourist happily pays double the fair value.
The best way to deal with crazy price tags is to ignore them.
Before you even find out the price, determine the item's
value to you, considering the hassles involved in packing it or
shipping it home.
Determine the merchant's lowest price. Merchants hate to lose a
sale. Work the cost down, but if it doesn't match with
the price you have in mind, walk away. That last amount the
merchant hollers out as you turn the corner is often the
best price you'll get. If that price is right, go back and buy.
Prices often drop at the end of the day, when merchants are
considering packing up.
Curb your enthusiasm. As soon as the merchant perceives the "I
gotta have that!" in you, you'll never get the best price.

He assumes Americans have the money to buy what they really
want.
Employ a third person. Use your friend who is worried about the
ever-dwindling budget or who doesn't like the price or
who is bored and wants to return to the hotel. This trick can
work to bring the price down faster.
Impress the merchant with your knowledge. He'll respect you,
and you'll be more likely to get good quality. Istanbul has
very good leather coats for a fraction of the US cost. Before my
trip I talked to some leather-coat sellers and was much
better prepared to confidently pick out a good coat in Istanbul.
Ask for a deal on multiple items. See if the merchant will give
you a better price if you buy in bulk (three necklaces
instead of one). The more they think they can sell, the more
flexible they may become.
Offer to pay cash at stalls that take credit cards. You can expect
to pay cash for most things at street markets, but some
merchants who sell pricier goods (nice jewelry, artwork, etc.)
take credit cards, too. They're often more willing to strike a
deal if you pay cash, since they don't lose any profit to credit-
card fees.
Show the merchant your money. Physically hold out your money
and offer him "all you have" to pay for whatever you
are bickering over. He'll be tempted to just grab your money

and say, "Oh, OK."
Obey the rules. Don't hurry. Bargaining is rarely rushed. Make
sure you are dealing with someone who has the authority
to bend a price downward. Bid carefully. If a merchant accepts
your price (or vice versa), you must buy the item.
If the price is too much, leave. Never worry about having taken
too much of the merchant's time. Merchants are
experienced businesspeople who know they won't close every
deal.
WHY IT PAYS TO HAGGLE
Adapted from “Master the Art and Science of Haggling,” first
published in the Negotiation
newsletter, August 2009.
Businesses that never would have considered negotiating with
customers before the global
economic crisis are now willing, even eager, to make a deal.
Just like the prices of houses, cars,
and other big-ticket items, the prices of furniture, electronics,
wine, jewelry, and other “medium-
ticket” goods are now frequently up for discussion. The ancient

art of haggling-the back-and-
forth dance of offers and concessions between buyer and seller
– is making a comeback.
In some cultures, a long tradition of haggling in markets and
bazaars flows naturally into brick-
and-mortar stores. By contrast, in the United States and many
other countries, haggling between
buyers and sellers is an under-practiced art, typically employed
only in negotiations for cars and
real estate. As a consequence, many Westerners have an
aversion to haggling, especially in
contexts where negotiation is not the norm. You might routinely
pass up opportunities to haggle
because you’re afraid of offending the seller or because you feel
inexperienced or uncomfortable.
But you’re probably passing up chances to save money. A May
2009 Consumer Reports poll
found that 66% of Americans had tried to negotiate discounts in
the previous six months. Of
these hagglers, 83% succeeded in getting lower hotel rates, 81%
got better deals on clothing and
cell phone service, 71% negotiated cheaper electronics and
credit-card fees.

If the potential financial benefits aren’t enticing enough, look at
haggling as a chance to improve
your negotiation skills in a relatively low-risk context. The
price cut you negotiate at a chain
store for a washing machine could make you feel more
confident in your next heavy-hitting
workplace negotiation. (And you can haggle on your company’s
behalf, of course, whether for
lower rent, travel expenses, or office supplies.)
In addition, many sellers are hurting these days. When faced
with a choice between haggling
with you or losing you as a customer, many will gladly accept
the challenge. Similarly, lenders
and landlords may be willing to renegotiate existing contracts to
keep good customers or tenants
who are struggling financially due to layoffs and pay cuts.
HOW TO NEGOTIATE THE PRICE OF A CAR
Car buying can be nerve-wracking. You’re typically making one
of the three biggest purchasing decisions that

you’ll make in your life (the other two: college choice and home
buying). Your car is one of the most visible
manifestations of your personality. It also needs to get you and
your family to work, school, and everywhere in
between.
Car buying is the most intimidating if you’re not prepared. The
first thing that you as a buyer need to do is try
to get as much emotion out of the buying process as possible.
It’s not easy, but remember: It’s a business
transaction, nothing more and nothing less.
Unfortunately, car buying is also one of the last bastions of
freewheeling price negotiation. Nearly every facet
of the transaction can be adjusted as you strive to get the best
new car deal and the dealer tries to get the
most for their product. Don’t hate the salesperson, manager, or
finance manager for this; they’re simply doing
their job.
The two biggest factors in the process are knowledge and
confusion. Your best friend is knowledge and the
dealer’s best friend is confusion. When you start to weigh in
factors like rebates, financing incentives, your
car’s trade-in value, and various fees, the process can get rather
complex and confusing – especially if you’re

relying on the salesperson to guide you through the process.
Fortunately, you're already on the right path; the fact that
you’ve landed on this page means that you’re
arming yourself with knowledge.
Follow these tips to cut through the noise and negotiate the best
price on a car.
Get Quotes From Multiple Dealerships
It’s never been easier to get quotes from multiple dealerships,
and you don’t even have to drive across town.
The best way to get online quotes is to use our Best Price
Program to get a prenegotiated price with
guaranteed savings. You can also go online and use the quote
tools on dealer and manufacturer websites.
The best part about these quote programs is that they give you
exactly what you’re interested in: the price of
the car you want without confusing factors like the value of
your trade-in or what you’ll do for financing.
If you do decide to reach out to dealers on your own, don’t
mention your trade-in, monthly payments, or
financing options. At this stage, you’re only interested in the
vehicle’s sales price. Be sure that any quote
includes all of the taxes and fees involved in the transaction.

Know What You Want to Pay
You’re several steps ahead when it comes time to negotiate if
you already have a price from a dealership in
hand, a pre-approved financing offer, and knowledge about the
value of your trade-in. Be sure to check
our new car pricing tool to ensure that the quotes are in the
ballpark of what you should expect to pay. If
they’re too high, keep looking, even expanding your search to
dealerships a couple hours from your home. If
they’re suspiciously low, that should raise a red flag.
With that info in hand, you’ll have a target price for your
negotiations. If the dealer says they'll give you $1,000
off, you’ll know if that’s a good deal or if they should go lower.
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It’s critical at this juncture to be totally honest with yourself
about what you are able to pay. Remember that
your monthly payment is only one component of car ownership.
There are fuel, insurance, parking, and
maintenance costs to consider.
Don’t Become Emotional

As we noted earlier, buying a new car can be an emotional
process. It’s even more emotional after you’ve just
test driven your dream car. However, you need to try to keep
those feelings at bay. Use good judgment and
avoid anything that would heighten your emotional attachment
to the car, such as taking it home for the
night. They might offer, but don’t bite.
You want to get the best deal you can, and dealers try to
maximize profits on every car they sell. It’s naturally
an adversarial process, with a bit of tension involved. It’s in
your best interest to remain friendly and
courteous. A hostile negotiation is uncomfortable for everyone
involved, and the staff will be more likely to
work with you if you seem calm and friendly.
Remember, this is a business deal, and the salespeople have
extensive training on how to manage the
transaction in their favor. You’re much more likely to get a
positive outcome if they like you, instead of
wanting to stick it to you because you’re acting like a jerk.
Be Ready to Walk Out
This is your biggest advantage, and their greatest fear.
If you don’t like the deal that’s on the table, or if high-pressure

sales tactics are making you feel
uncomfortable, you can always walk away. There are other cars,
other dealers, and other deals out there.
If the process totally gives you the sweats, there are alternatives
to going through a dealer. Auto brokers can
be recommended by your lender or auto club, and (for a fee)
they will negotiate on your behalf, even
delivering the car to your driveway.
Shop During Off Hours
Going to the dealership during a weekday means you’ll compete
with fewer customers, which may make it
easier to get a good deal. You’ll also have shorter waits to take
test drives, confer with managers, and get into
the finance office if you decide to buy. Weekends and nights are
the busiest times at the dealership.
Negotiating the Purchase Price
The less you talk the better. While they will try to mine for
information, you should keep it simple and
businesslike. Don’t talk about anything except the final
purchase price of the car at this point. If you’re taking a
test drive, many dealers will ask for your social security number
before you get in the car. You should politely
decline if possible. They want to use it to run a credit check on

you while you're test driving, so they can put a
financing package together that is profitable for them.
Fortunately, with your financing research, you’re
already one step ahead of them.
Dealers will want to talk about your monthly payments, trade-in
value and financing options – everything
other than the true price of the car. Each of those things can
obscure the price of the car and make it look like
you’re getting a better deal than you are.
Don't Only Focus on Monthly Payments
You may (and probably should) have a maximum monthly
payment that you can afford in mind, but it’s not in
your best interest to shop by monthly payment. When you shop
by monthly payment, rather than the total
cost of the vehicle, you’re more susceptible to financing
mechanisms that can have you paying thousands
more over the life of the loan.
For example, to lower the payment, a dealer might stretch a
car’s loan term an extra year instead of dropping
the price. That means that you not only pay more for the car,
but you also pay interest for an extra year -- a

double win for the dealer and their finance company, but a huge
loss for your pocketbook. Know roughly what
your monthly payments will be on your target price, and
negotiate on price alone.
There are financial calculator apps for smartphones. Install one,
or use the one on our website, so that you can
check the dealership’s math.
Negotiate Your Car’s Trade-in Value Separately
Bringing up your trade-in too early can complicate the process,
and add to the confusion that the dealer
relishes. It allows a salesperson to draw your attention away
from the sales price by moving numbers around.
For example, a slightly higher sales price may not look so bad if
you think he or she is offering you a good deal
on your trade-in.
You should already know what your car is worth, and staying
with that number through the negotiation
process will deliver a truer price on your new car.
Negotiate Rebates and Incentives Separately
Part of your research process should include a search for deals
on the model or brand of car you’re looking for.
But bringing that knowledge up too early in the process can lead
to paying more than you should.

Do your best to lock in a price, before the incentives are applied
or deducted. If the car you’re considering has
a cash back offer available, have them subtract the difference
after you’ve negotiated a price, not before.
Negotiating an awesome price, then getting cash off or zero
percent financing, is a special kind of wonderful.
Know Which Fees Are Negotiable
There are a few things that you can’t negotiate. You’re going to
have to pay title and licensing fees, sales tax,
and a destination fee, which is set by the manufacturer. There’s
a growing tendency, however, for the dealer
to include a number of other fees, such as documentation,
marketing, or dealer fees, which are open to
negotiation, though the dealer won’t want to. They’re the
dealer’s fixed overhead costs, and their inclusion in
your deal shouldn’t be considered a certainty.
When you’re in the finance office signing the final paperwork,
the finance manager is likely to offer you any
number of add-ons, from an extended warranty to paint
protection or key insurance. Many of these items can
be purchased from outside companies, including your lender,
insurance agent, or independent shops. If you’re
interested, be sure to do your research up front, so you have an

idea of what you should be paying.
To wrap it up, knowledge is your friend, confusion isn’t, and
you always have the option to walk away if you’re
uncomfortable. The car buying process can be daunting, but
sticking to this plan should help simplify it,
helping you get the best price possible on your next new car.
By John M. Vincent | October 28, 2016
US News and World Report
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sales-and-deals
Never Say Yes to the First Offer
Roger Dawson
Power Negotiators know that you should never say Yes to the
first offer (or counter-offer) because it
automatically triggers two thoughts in the other person's mind.
Let's say that you're thinking of buying a second car. The
people down the street have one for sale, and
they're asking $10,000. That is such a terrific price on the
perfect car for you that you can't wait to get

down there and snap it up before somebody else beats you to it.
On the way there you start thinking
that it would be a mistake to offer them what they're asking, so
you decide to make a super low offer of
$8,000 just to see what their reaction is. You show up at their
house, look the car over, take it for a short
test drive, and then say to the owners, "It's not what I'm looking
for, but I'll give you $8,000."
You're waiting for them to explode with rage at such a low
offer, but what actually happens is that the
husband looks at the wife and says, "What do you think, dear?"
The wife says, "Let's go ahead and get rid of it."
Does this exchange make you jump for joy? Does it leave you
thinking, "Wow, I can't believe what a deal
I got. I couldn't have gotten it for a penny less"?
I don't think so. I think you're probably thinking
1. I could have done better.
2. Something must be wrong.
In the thousands of seminars that I've conducted over the years,
I've posed a situation like this to
audiences and can't recall getting anything other than these two
responses. Sometimes people reverse

them, but usually the response is automatic, "I could have done
better," and "Something must be
wrong."
Let's look at each of these responses separately:
First Reaction: I could have done better. The interesting thing
about this is that it doesn't have a thing to
do with the price. It has to do only with the way the other
person reacts to the proposal. What if you'd
offered $7,000 for the car, or $6,000, and they told you right
away that they'd take it? Wouldn't you still
think you could have done better? What if that bearing
salesperson had agreed to $150 or $125?
Wouldn't you still think you could have done better?
Several years ago, I bought 100 acres of land in Eatonville,
Washington-a beautiful little town just west
of Mount Rainier. The seller was asking $185,000 for the land. I
analyzed the property and decided that
if I could get it for $150,000, it would be a terrific buy. So I
bracketed that price and asked the real estate
agent to present an offer to the seller at $115,000.
I went back to my home in La Habra Heights, California leaving
the agent to present the offer to the

seller. Frankly, I thought I'd be lucky if they came back with
any kind of counter-offer on a proposal this
low. To my amazement, I got the offer back in the mail a few
days later, accepted at the price and terms
that I had proposed. I'm sure that I got a terrific buy on the
land. Within a year, I'd sold 60 of the acres
for more than I paid for the whole hundred. Later I sold another
20 acres for more than I paid for the
whole hundred. So when they accepted my offer, I should have
been thinking, "Wow. That's terrific, I
couldn't have gotten a lower price." That's what I should have
been thinking, but I wasn't. I was thinking,
"I could have done better." So it doesn't have anything to do
with the price-it has to do only with the
way the other person reacts to the proposal.
Second Reaction: Something must be wrong. My second
reaction when I received the accepted offer on
the land was, "Something must be wrong. I'm going to take a
thorough look at the preliminary title
report when it comes in. Something must be going on that I
don't understand, if they're willing to accept
an offer that I didn't think they would.
The second thought you'd have when the seller of that car said

Yes to your first offer is that something
must be wrong. The second thought that the buyer of the
bearings will have is, "Something must be
wrong. Maybe something's changed in the market since I last
negotiated a bearing contract. Instead of
going ahead, I think I'll tell this salesperson that I've got to
check with a committee and then talk to
some other suppliers."
These two reactions will go through any body's mind if you say
Yes to the first offer. Let's say your son
came to you and said, "Could I borrow the car tonight?" and you
said, "Sure son, take it. Have a
wonderful time." Wouldn't he automatically think, "I could have
done better. I could have gotten $10 for
the movie out of this"? And wouldn't he automatically think,
"What's going on here? Why do they want
me out of the house? What's going on that I don't understand"?
This is a very easy negotiating principle to understand, but it's
very hard to remember when you're in
the thick of a negotiation. You may have formed a mental
picture of how you expect the other side to
respond and that's a dangerous thing to do. Napoleon Bonaparte
once said, "The unforgivable sin of a

commander is to 'form a picture'-to assume that the enemy will
act a certain way in a given situation,
when in fact his response may be altogether different." So
you're expecting them to counter at a
ridiculously low figure and to your surprise the other person's
proposal is much more reasonable than
you expected it to be.
For example:
increase in pay. You've asked for a
15 percent increase in pay, but you think you'll be lucky to get
10 percent. To your
astonishment, your boss tells you that he or she thinks you're
doing a terrific job, and they'd
love to give you the increase in pay. Do you find yourself
thinking what a wonderfully generous
company this is that you work for? I don't think so. You're
probably wishing you'd asked for a 25
percent increase.
You say, "No way. I'll give you $50 and
not a penny more." In reality, expect to settle for $75. To your

surprise your son says, "That
would be tight, Dad, but okay, $50 would be great." Are you
thinking how clever you were to get
him down to $50? I don't think so. You're probably wondering
how much less he would have
settled for.
asking $100,000. A buyer makes an
offer at $80,000, and you counter at $90,000. You're thinking
that you'll end up at $85,000, but
to your surprise the buyer immediately accepts the $90,000
offer. Admit it-aren't you thinking
that if they jumped at $90,000, you could have gotten them up
more?
So, Power Negotiators are careful that they don't fall into the
trap of saying Yes too quickly, which
automatically triggers in the other person's mind:
1. I could have done better. (And next time I will. A
sophisticated person won't tell you that he felt that
he lost in the negotiation; but he will tuck it away in the back of
his mind, thinking "The next time I deal
with this person I'll be a tougher negotiator. I won't leave any
money on the table next time.")

2. Something must be wrong.
Turning down the first offer may be tough to do, particularly if
you've been calling on the person for
months and just as you're about to give up, she comes through
with a proposal. It will tempt you to grab
what you can. When this happens, be a Power Negotiator-
remember not to say Yes too quickly.
Many years ago, I was president of a real estate company in
southern California that had 28 offices and
540 sales associates.
One day a magazine salesman called on me. He was trying to
sell me advertising space in his magazine. I
was familiar with the magazine and knew it to be an excellent
opportunity, so I wanted my company to
be in it. He made me a very reasonable proposal that required a
modest $2,000 investment. Because I
love to negotiate, I started using some Gambits on him and got
him down to the incredibly low price of
$800. You can imagine what I was thinking at that point. Right.
I was thinking, "Holy cow. If I got him
down from $2,000 to $800 in just a few minutes, I wonder how
low I can get him to go if I keep on
negotiating?" So, I used a Middle Gambit on him called Higher
Authority. I said, "This looks fine. I do just

have to run it by my board of directors. Fortunately, they're
meeting tonight. Let me run it by them and
get back to you with the final okay."
A couple of days later I called him back and said, "You'll never
know how embarrassed I am about this.
You know, I really felt that I wouldn't have any problem at all
selling the board of directors on that $800
price you quoted me, but they're so difficult to deal with right
now. The budget has been giving
everyone headaches lately. They did come back with a counter-
offer, but it's so low that it embarrasses
me to tell you what it is."
There was a long pause, and he finally said, "How much did
they agree to?"
"$500."
"That's okay. I'll take it," he said. And I felt cheated. Although
I'd negotiated him down from $2,000 to
$500, I still felt that I could have done better.
There's a postscript to this story. I'm always reluctant to tell
stories such as this at my seminars for fear
that it may get back to the person with whom I was negotiating.

However, several years later I was
speaking at the huge California Association of Realtors
convention being held that year in San Diego. I
told this story in my talk, never imagining that the magazine
salesman was standing in the back of the
room. As I finished my presentation, I saw him pushing his way
through the crowd. I braced myself for
what I expected to be a verbal assault. However, he shook my
hand and said with a smile, "I can't thank
you enough for explaining that to me. I had no idea the impact
that my tendency to jump at a quick deal
was having on people. I'll never do that again."
I used to think that it was a 100 percent rule that you should
never say Yes to the first offer. Until I heard
from a man in Los Angeles who told me, "I was driving down
Hollywood Boulevard last night, listening to
your cassette tapes in my car. I stopped at a gas station to use
the rest room. When I came back to my
car, somebody stuck a gun in my ribs and said, 'Okay buddy.
Give me your wallet.' Well, I'd just been
listening to your tapes, so I said, 'I'll give you the cash, but let
me keep the wallet and the credit cards,
fair enough?' And he said, 'Buddy, you didn't listen to me, did
you? Give me the wallet!'" So sometimes

you should say Yes to the first offer, but it's almost a 100
percent rule that you should Never Jump at the
First Offer.
Key points to remember:
-offer from the
other side. It automatically triggers two
thoughts: I could have done better (and next time I will) and
Something must be wrong.
how the other person will respond
to your proposal and he comes back much higher than you
expected. Prepare for this possibility
so it you won't catch you off guard.

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