A Lesson on Negotiations

The one negotiation technique I use the most is so simple. Let me explain by using an example that happened in the last thirty days. I need to tell you the whole story so here goes.

An individual has just been released from prison. While incarcerated, he learned that the more “stuff” you have, the more stressful your life becomes. I don’t know if he learned that in a class or from other inmates, but it seemed very appropriate for him. He had an old truck that he used before he left five years ago and he called to sell it to me. Some parts were missing and it looked really ugly. 

I have learned to think of most everything as INVENTORY that I buy. I mean to emphasize that word INVENTORY. If I can’t sell it at a profit, I don’t need more “stuff” around to make my life more stressful. Can you tell that I was a “don’t wanter” for this truck? That is among the better lessons I ever learned in negotiation. If you ever lose your control and become a wanter, you might as well write the check and buy the item. The negotiation will end when the other party learns that you really want what they are selling. Back to the story… 

He wanted me to make him an offer. I really didn’t want to do that. He then wanted to crank the truck for me. I didn’t want to do that either. I felt that I had the advantage with the appearance of the truck, why give him a positive? At that point in the negotiation, he could only talk about the ugly truck.  If we cranked it, he might get something positive like how good the motor runs.  I was working on setting the level of expectation. My attitude was simple. I was buying scrap iron and not a good running truck.

He finally gives me a price and I don’t respond. I now have the negotiation ready to have the way I like to do business explanation done. Let me give it to you. The way I like to do business is really simple. The seller always knows how bad they need to sell and therefore the absolute bottom dollar they would be willing to take for the truck. Then he said why don’t you just make me an offer? I don’t like to price the other person’s product, was my response. 

I like for the seller to price his own product and here is the criteria for pricing.  You give me the absolute bottom dollar you would be willing to accept if you knew you would get that money today or tomorrow. I won’t do any haggling or counter offers. I will either buy it or NOT based on the number you give me so you will need to give me the lowest number. If we do it that way, we can still be good friends because neither one of us took advantage of the other one. 

When he gives me the absolute bottom dollar and it is not pleasing to me, I sometimes will leave the door open to future discussion by telling him that he almost got to the point where I would buy it but not quite. If he would like to give it a little more thought and call me later, we could leave this discussion open until next Monday at noon time.  Always put a deadline on any open negotiations. That will apply pressure to the person who either needs or wants to sell. 

Suppose he sells it to someone else?  Remember that the one that gets away will not be the one that hurts us. The one we get into where we should not have will be the one that hurts the most.  

I first looked at that ugly truck last Sunday.  The seller called Friday and we made a deal. I will pick it up Tuesday. Remember that I bought scrap iron. He sold a truck. I can take it to the scrap dealer and sell it for a profit any day. It is INVENTORY for me. 

After lunch today, I plan to stop by a residence where some little lady has made a terrible mistake. She went to the shopping mall and bought a dress at an upscale store. She paid the sticker price of $99 for the piece of clothing. Today in this heat, she is trying to sell it after a little wear for $10. She will be tired of her garage sale by two. I will stop and practice this routine by asking her to price the remaining inventory from her yard sale. Remember you must practice if you ever expect to get good as a negotiator. You have to study people in order to get good because people always make decisions. Houses don’t ever sell or dance! People do!