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Elements Of Negotiation - The Price

Not all negotiation involves money. You can use your negotiating skills to get the kids to clean the house, after all. Of course, most negotiation outside of the house will have a money element to it, and gathering relevant information about this is crucial to doing your best.

Try to get an idea about why the price is where it is. If you are the one selling, you already have that information, of course. In that case, have enough information ready to present to the other side to justify your pricing. on the other hand. if you are on the buying end, find out how the seller arrived at his price.

Often there are several elements in a large deal that determine the asking price. For example, I once offered an investor a small rental I owned for two different prices. I offered him one price, and the another that was 15% higher. He took the higher price.

Why would he take the higher price? Because the first was for cash. Taking the second option, he bought the property from me with virtually no money down (,000) on terms that allowed him to have cash flow from day one. I knew he wanted to conserve his cash, and I wanted both the higher price and the high interest I charged him.

The point is to be sure you look at all the factors that go into valuing something, whether it's real estate or a contract for cooking oil. Altering these factors can alter the price dramatically. Learn what you can about anything that might affect price.

If you were to buy a new car, for example, you might want to use one of the online services like Consumer Reports' website, in order to know what the dealer is actually paying for the car. You would also want to see what the dealer cost is for the options. With information like this, you can more effectively negotiate the lowest price, without going so low that they can't say yes (they still need to make a profit).

Effective negotiation doesn't mean always trying for the lowest price possible. If you are contracting with a cleaning service to clean your buildings every week, you may want a decent price, but you want quality work too. In fact, you may want to think about the motivation level and trustworthiness of a vendor that is being chronically underpaid by your company.

Research the numbers, and understand what they mean. It is one of the keys to good negotiation.

About the Author: Copyright Steve Gillman. For more on Powerful Negotiation Skills, and other useful insider information, visit:

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