Negotiation tactics can be different whether you are the seller or you are the buyer. Below are some tips to help with effective negotiations when you are on the buying side.
Expressing Other Options
Fairly early in any discussions with a seller, you want to be sure to let them know that you are exploring other options in terms of talking to other sellers. By simply letting the seller know that you have other options and are that you are fully aware of that, their power in the negotiation is greatly decreased. This can have a direct and immediate impact on how they treat you and how they handle pricing and discounts.
Know Your Best Alternative
Not only do you want to present yourself as exploring other options and alternatives, you actually want to be conscience of what your other alternatives are. Specifically, you want to know what your best alternative to a negotiated agreement is (Reference: Getting to Yes, Roger Fisher and William Ury). This is basically the next best thing you could do if you were to walk away.
For effective negotiations, it is important to know what your best alternative is as this will provide more clarity as to where you stand in the negotiation and what decisions you should make. For example, if you have a good alternative, you are in a more powerful position and this knowledge can help you to protect yourself from pushy sales people.
No Time Urgency
The seller will always have some form of time urgency. This is because time kills deals so they are going to want to want to close the transaction as quickly as possible. As a result, to improve your power and establish effective negotiations, present yourself as not having any time urgency. If there is a date when you have to make the purchase by, it can be beneficial to refrain from sharing that information.
The more interest you have in what the seller is selling, the more power they have. The more power they have, the less liberal they will be with their discounting and concessions. As result, you can establish effective negotiations by trying to display indifference in terms of the fit or level of interest.
Break Apart Bundles
A tactic that a seller will do is to try to bundle multiple items together and give the buyer one total price. From a negotiations standpoint, this puts the buyer in a powerful position as they are decreasing the amount of information that the buyer has and they are also decreasing the number of items that the buyer can negotiate. To increase your power as a buyer, break apart bundles to identify the individual prices and negotiate those one at a time.
Know Your Positions
For effective negotiating, it is important to know what your negotiating positions are in terms of opening offer, target price, and your walk away point. Having clarity and awareness with these different points will help you to navigate the negotiation to increase the probability that you end up where you want to in the end.
Launch Pad Solutions provide negotiations training helping to improve effective negotiations.
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