Negotiation is the art of arriving at a compromise on a subject to the satisfaction of the parties involved. Negotiation can take place between two people or several people. Negotiations can also happen between different firms or companies.
Negotiations can take place in the presence of the parties involved. It can also take place over the phone or in writing. As the people involved are trying to arrive at a solution to suit their needs, a compromise is evolved to the mutual satisfaction of the parties involved.
Business negotiations could involve purchases, sales, loans, contracts or anything regarding business.
Negotiating for purchase
It is extremely important to formulate a strategy before starting any negotiation. And you should adhere to this strategy during the negotiations.
Before trying to buy anything you should make a study of the product or service and its value in the market. You should study the availability of the product from different sources. This will give you a very good insight to negotiate its price.
You should also decide on the best price you can offer a particular product and try to negotiate for a price below this. During the negotiation one should be very confident and never reveal the real position or the maximum price at which he is prepared to buy the product. One should pose as if he is prepared to walkout if the price is not to his satisfaction.
You should not hesitate to offer a price that is far below the price at which the product is offered. Some people hesitate to do this, because they lack confidence. One should also study the body language of the seller. It is possible that the seller lowers his guard at some point during the negotiation. This is the time, you clinch the deal at the best possible price.
Negotiation requires a lot of practice and experience. Some people are masters in the art of negotiation.
One should be confident and persistent during a negotiation but never abrasive. Application of gentle persistent pressure, will see the other party concede and you get your result.
Be on guard against standard terms being portrayed as concessions by the seller.
If you want a regular supply, over long periods, you can use this as a bargaining tool. If the supplier is unwilling to reduce the price, you can ask for better payment terms or delivery.
Don’t put all the cards on the table initially. For example if you want to purchase a large quantity of material over a long period, you can mention a small quantity over a short period and get the price. Keep increasing is the quantity that you would purchase and negotiate the price for that quantity. You would finally get the material at the lowest possible price.
If you are the supplier’s main customer, don’t use this as a leverage to get the prices down beyond reasonable levels. Remember that the supplier has to exist and make reasonable profit to survive. Building trust is extremely important such cases.