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price negotiation

What is Price Negotiation?

Knowing what you will do if you can’t get a good deal will give you bargaining power in your price negotiation. 

In a price negotiation or other distributive (single-issue) negotiations, it can often seem as though the buyer has limited options: accept the price or lose the deal. But sellers also face the dilemma of losing the sale. In both cases, the obvious BATNA (best alternative to a negotiated agreement) is to walk away from the deal. 

However, there is almost always room for haggling. Your BATNA also helps you calculate your reservation price—the highest price you’d be willing to pay in the current negotiation.

Interestingly, research suggests that in single-issue price negotiations, asking a counterpart to compare your offer to the minimum they’ll accept can help you not only get a great deal but ensure they’re satisfied with the end result. Offers look more appealing when we compare them to the least we would accept than when we compare them to the most we hoped to achieve. 

It’s also important to be polite and cordial throughout the negotiation process, and be willing to accept no for an answer. 

Effective negotiation strategies in business are critical. Get the information you need to succeed today by downloading our free special report, written by some of the nation’s foremost experts in negotiation, Business Negotiation Strategies: How to Negotiate a Better Business Deal. This free report from Harvard Law School will teach you how to negotiate a business deal and gives you the tools you need to navigate even the stickiest business deals.

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The following items are tagged price negotiation:

What Is an Umbrella Agreement?

Posted by & filed under Dispute Resolution.

Business negotiators tend to want the best of both worlds. When reaching an agreement, they want to pin down parties’ respective rights and responsibilities, but they also want to retain the flexibility they need to deal with ever-changing business conditions. One solution to this apparent dilemma is to craft an umbrella agreement. … Read What Is an Umbrella Agreement?

Preparation for Negotiation: Get Off on the Right Foot

Posted by & filed under Negotiation Skills.

The opening stages of negotiation can be filled with uncertainty. How assertive should you be? How can you set yourself up for success? What should an opening offer look like? To answer these questions accurately, thorough preparation for negotiation is key. Negotiation research offers guidelines to get talks off on the right track. … Read More

Negotiation in Business Without a BATNA – Is It Possible?

Posted by & filed under BATNA.

In a negotiation scenario, you always have a best alternative to a negotiated agreement. Negotiation research and negotiation strategy helps negotiators find their BATNA, leverage it at the bargaining table, and illustrates the impact that knowing your BATNA has on a negotiation. … Read More

Dear Negotiation Coach: Deal Structuring and Negotiating with “Bad Acts”

Posted by & filed under Dealmaking.

Deal structuring and negotiating can feel challenging in the best of situations. But when you’re dealing with “bad acts,” there are additional factors to consider when you structure your negotiation strategy. This is what one reader asked about when facing a deal to buy out a company. Here’s their question: Q: I work for an international … Read More

For Price Negotiators, Preparation is the Key to Success

Posted by & filed under Dealmaking.

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 … Read More

In Group Negotiation, Avoid a Turf Battle

Posted by & filed under Business Negotiations.

In group negotiation, turf battles—heated conflicts over territory, control, rights, or power—are common. Department heads clash over scarce resources. Companies, community groups, and governments get tied up in lawsuits over undeveloped land. Across the globe, fishing groups have depleted fish stocks in their rush to catch the biggest share for themselves. … Read In Group Negotiation, Avoid a Turf Battle

Dealing with Difficult Clients: Price Negotiations

Posted by & filed under Dealing with Difficult People.

When dealing with difficult clients, we sometimes can trace our struggles to the early stages of our interactions—including our price negotiations. If initial price negotiations are contentious and frustrating for the client, their unhappiness is likely to leave you handling difficult situations and managing difficult people in your ongoing business relationship. In this post, we … Read More

Aim high…or not?

Posted by & filed under Daily, Negotiation Skills.

Adapted from “How High Should You Aim?”, first published in the Negotiation newsletter. Research shows that moderately difficult goals can energize people and increase their performance. In negotiation, parties with relatively high aspirations often negotiate higher individual payoffs. But there can be a downside: impasse and unethical behavior may be more likely. In a study conducted by … Read Aim high…or not?