How often do you come across something you want so badly but cannot have because it costs just a little more than you can afford? Negotiation is a process by which parties come to an agreement on certain issues, and every day, we are involved in negotiations one way or another.
Your target might be a piece of clothing, a car, a house, a pay raise or a contract, whatever it is, you often find that being able to convince the salesperson (or other parties) to agree to your terms is a priceless skill.
Even though the process is not new to anyone, the problem is people often feel too embarrassed to ask for deals at the rate they can afford. This means they lose out on good opportunities.
However, there are steps you can take to help you price effectively.
Do your research
The first step to getting the upper hand in a negotiation is to be well informed beforehand. It is not wise to bargain over anything if you are not sure of the price because you would not be able to tell when you overprice or sell yourself short.
Asking questions from people familiar with the matter or carrying out desktop research at the very least. Know how season affect prices, know whether or not it is a perishable good (they have to be sold faster) if there is an on-going promotion, and what competitors offer.
In addition, having information would make you seem very knowledgeable and prevent the seller or other parties from exploiting information gaps.
Understand your seller
While understanding the product, service or market can be great, knowing the motive of the seller can hand you added advantage. How so? Remember those times you needed cash badly are was willing to sell something for less the market price? The same works.
In addition, knowing the cost to your seller can help you make offers the seller would be willing to consider. Take, for instance, it costs your favourite car dealer N15 million to purchase the car you want, but he fixes his selling price at N17 million to compensate for selling cost and other expenses amounting to N500,000. Your car dealers want to make a profit of N1.5 million! Knowing this can help you bargain well knowing the dealer might not be willing to sell less than N15.5 million.
This usually works but in some instances as you would come to see, being reasonable can be counterproductive.
It is “give and take”, incentivise your seller
Sometimes people can be willing to make short term losses if it promises longer-term benefits. The other party might be interested in a compromise if there is a value proposition you make s(he) thinks is good enough.
You might find that promising patronage in the future can be enough motivation for the salesperson to let you have what you want.
NB: Do not promise patronage if you would not be interested in the seller afterwards, because negotiation also involves trust.
