Negotiation can be worrisome for those in the buying-selling market who have yet to try it. For those unused to or unfamiliar with the process of negotiating, it can be overwhelming. The back and forth, the haggling, and anxiety that you are approaching all this with knowledge and confidence, is challenging to begin with, especially if you don’t see all the potential benefits. If you’re unfamiliar with the practice of how to negotiate price, it may feel like a talent that is beyond you or not worth the time to learn and understand. However, it’s important to understand how useful and practical a skill like negotiating is for buyers in the market of goods and services.
There are many reasons negotiating seems stressful. When you’re working out deals as a buyer, there’s a lot on the line. The stakes are high, and the pressure is daunting. Furthermore, the opportunities that present themself for you to practice negotiating are also the very same situations and opportunities in which you want to practice your negotiating skills before the situation happens.
It’s a tricky business, and if you are unaware of the benefits, you may not see the use. The skill of negotiation takes practice and expertise, so why should a buyer take the time to do so? Negotiation is daunting, but it’s a necessary skill. It can vastly improve the outcome of your deals if you are able to properly negotiate and provide you with improved relationships, better discussion skills, and more agreeable prices and value.
When discussing with a salesperson, you want to focus on your objectives, goals, and how you can work with the seller to an end goal. These skills also make up good negotiating; it’s just a question of how effective you are at utilizing them. Whether you’re in the bigger market of professional buying or you’re buying lower stakes things occasionally, it can still be very important to learn how to bargain and negotiate for a better deal or a lower price. By learning the right skills and methods to negotiate, you can learn how to effectively negotiate your way to better deals and even better business relationships.
Why Is Negotiation Important for Buyers?
The inability to negotiate price means that you could be getting the short end of the stick in deals and agreements. There’s a lot of negotiation that occurs in buying and selling goods and services on the market, both low stakes and high stakes transactions. Agreements and cooperation require negotiation unless you’re willing to accept every first deal. If you are given an unfavorable agreement or deal, understanding how to better counter or work from that offer is necessary for garnering a more optimal agreement. Proper negotiation is what allows you to provide more effective counter offers that create more benefits. Whether you’re trying to buy a product, property, or coordinating another transaction for your business, organization, or person, you want to be prepared to talk through different offers. This discussion can open a lot of doors and prompt good discussion and cooperation.
Negotiation is necessary for situations in buying or figuring out a transaction, although oftentimes, buyers will fail to negotiate out of fear of appearing too aggressive. Buyers are worried that a salesperson will be upset or offended by the wish to negotiate price. However, this isn’t often the case. Particularly in high-value agreements, negotiation is expected so that both parties feel satisfied by the outcome. By refusing to negotiate, you may be cheating yourself. By behaving this way, you could lose out on a very good deal, simply by failing to talk over a better alternative. It’s understandable to be nervous about negotiating, particularly if you have no experience, but it’s a useful and practical skill that can take you far.
Simply negotiating with no awareness of how to do so can also be detrimental to your end goals, however. If you negotiate badly, you could end up with a worse deal or a bad relationship. You could also end up with no deal at all. The act of talking through an agreement is part of negotiation, but learning how to negotiate effectively is an entirely different thing to tackle. Once you understand how to more properly negotiate, you’ll be able to work towards conclusions and offers that give you better outcomes and rewards.
Benefits of Negotiation as a Buyer
Learning to effectively negotiate can bring a host of benefits to the outcomes of deals and purchases. Negotiating is a big responsibility, especially if you’re representing your business or organization. Not only do you need to ensure that money is spent carefully, but you also want to establish solid and strong business relationships. But you can, in fact, have both of those things through negotiation. The ability to properly negotiate will mean you are able to better your ability in both those fields and others.
- Improve Savings
Negotiating deals can lower costs and increase the value of the purchase. By talking through deals and discovering where your goals and the goals of the other party align, you can effectively discover how to get price reductions and other reductions that improve value. Price is not the only thing at play with a deal, and higher value can also be gained through other concessions, such as savings on time, cycle time, convenience, or tax and shipment.
Proper negotiation can also lead to better quality and performance of what’s being agreed on. It allows you and the other party to establish expectations about quality and performance, therefore obtaining that higher quality. By talking through terms and mutual understandings, you and the other party reach understandings about timing, warranty, delivery, and payment. It can lower the possibility of future problems by creating these standards and understandings early on and ensuring they are carried out.
- Improve Relationships
Another positive result of negotiation is that it can vastly improve professional and business relationships. While those new to negotiating may think that negotiation will create tension between a buyer and seller, in actuality, the discussions that result from negotiations will create better rapport, communication, and bonds between professionals. Challenging an initial offer isn’t just a disagreement; it’s an opening to a longer and more involved discussion about the interests of the other party and how both parties can work together.
Negotiation improves communication by creating space for both parties to listen to each other and understand their goals and objectives. Open and clear communication allows both parties to articulate their plans and hopes for this deal and establishes trust and respect between buyer and seller. By improving business relationships through communication, you can work out longer-term professional relationships and learn how to evaluate good partners for honest and helpful partners in business. With more practice, you can also identify insincere or manipulative tactics in negotiation and learn how to keep a cool head during negotiations.
- Create the Best Solution for Both Parties
Proper negotiations create solutions with fewer problems for each party. With open discussion, each party can more easily identify the disagreements each has with a potential solution or deal, then work to mitigate those. You can proactively collaborate on issues to more effectively work to a solution, ideally a solution that satisfies the goals and needs of both parties while only conceding small amounts of things. This is the ideal outcome of negotiation: where both parties gain a lot of benefits and lose few things in return. You both want things in a negotiation, and it’s likely that you can help each other gain those things.
Remember that you want to find solutions to the problems of both parties. The end goal of negotiations is not to “win” them. This would create bitterness in the other party and sour a potential business relationship. It could also affect future negotiations if word spreads that you are the type of buyer who wants to win while the other party loses. Don’t push for win-lose solutions.
Instead, you want to find the win-win solution during the time that you discuss what each of you wants to gain and what neither of you can concede. Finding a win-win solution is the ideal ending of a negotiation after careful discussion and understanding has taken place. Once you discover where each of you can find common ground and understanding, you can find a solution that helps you both. By doing this, you can both find your way to a satisfying solution, gaining benefits and value for both of you equitably and paving the way to a strong and productive professional relationship.
Improving Your Solutions with Effective Negotiating
Practicing price negotiation is the best way to hone your skills, but you want to be sure to hone them properly. Learning to negotiate incorrectly isn’t going to save you costs or strengthen relationships. Those are the most obvious benefits of becoming an effective negotiator, but there are other, smaller benefits, as well. To get to the point where negotiating is second nature, you need to understand what makes up effective negotiations. To learn how to be a proper negotiator, there are several things you can do.
- Research Your Topic
Before you even begin talks with the other party as a buyer, you need to look into the market surrounding what you’re buying, as well as the likely wishes and goals of the other party. Researching should take up a significant amount of your time before you enter discussions and negotiations, as you want to be sure you understand what you want, what’s offered on the market, and other significant details about your potential purchase, as well as your potential sellers. This knowledge could help you leverage for a lower price, especially if there are similar competing offers for your purchase.
Having a specific product or goal in mind will also help negotiations be more specific to your needs and allows you to appear confident and well-informed in the eyes of the other party. This can also help influence towards a lower price. Understanding the market or retail value of what you’re purchasing can further give you that leverage and help you understand a likely price range and what’s considered a reasonable deduction in price. Any information you can garner has the potential to help you negotiate price.
- Understand the Other Party’s Needs
Don’t make the mistake of negotiating with someone who can’t even offer you a deal. Ensure that the person you’re working with has enough authority in the other party’s organization or business to properly negotiate. Picking the right time of day or season can also assist you in searching out a better deal, so keep an eye on buying cycles to know when a seller might be more open to lower deals for a purchase.
You want to be sure you understand the other party and their needs. This can be done both through beforehand research and through discussion during negotiation, but in both ways, you need to see what their objectives are for this deal. By understanding this, you can better accommodate their needs, and by offering something they want, you could gain something that you want. Understand both the individual seller and the company they represent to gain insight on how to approach the issue. This can help give you a pathway to strong negotiations that benefit you both.
- Polite But Firm
By prepping your research into an outline, you can be sure that you are confident and assured of your plan of action for success. The other party will sense this confidence, which also helps your success. Throughout discussions, you want to be polite without being overly accommodating. A nervous or confrontational mood will make for bad deals, either because the seller feels they can take advantage of you or because they feel you are not being accommodating to them and don’t want to offer you a good deal. Create an outline based on your research and make a budget. Through negotiations, terms may shift a lot, but try to stick to your budget to prevent being taken advantage of by a bad deal.
Always remain polite during the procedure, but never bend over backward to meet a demand. Instead, stick to your goals and objectives, then remain confident in your negotiating. Be open to the other party’s ideas and suggestions but do so with caution. If the other party refuses to give you time to think about an offer, the deal may not be as good as it seems. Be prepared to check the claims made by the other party, either through the research you’ve prepared or through a quick fact check on your phone or computer.
Ensuring that you’re confident and assured through negotiations means you will be taken more seriously by a seller. However, you also need to be sure that you don’t act too uptight or inhumanly, as that can lessen the ability to create a good business relationship. While you should follow instincts and make it clear that you’re knowledgeable about what you’re doing, you don’t want to talk down to a salesperson. That will win you no favors.
- Know Your Buying Power in Negotiations
Part of confidence in negotiations is understanding the power you have as a buyer. While yes, it relies on your research and ability to know what you’re talking about, it also relies on you knowing that you can walk away from the deal at any time. You don’t have to accept a bad deal, and you shouldn’t. This mindset is necessary, and it can be made even stronger by the knowledge of other offers. This kind of leverage isn’t always possible, but if you can present a better offer from another seller as evidence of better deals, that could help you negotiate for a better price from this seller.
Regardless of if you have that specific leverage, you have to approach negotiations understanding that you shouldn’t accept a deal that is unfavorable. This isn’t something you want to fake; you want to fully be aware that a bad deal is not worth your time. This knowledge alone will give you more confidence and authority in negotiations.
Above all, be aware that a failed negotiation isn’t the end of your successful negotiating career. Sometimes, two parties just can’t find common ground, and it may not be the fault of either of them. Even if it was the fault of you or the seller, know that practice and care to adhere to confidence and knowledge will help in the future. You can always try again with another set of negotiations. Sometimes, you have to cut your losses from an interaction or negotiation, and that’s the best option for both parties. As a buyer, you are not obligated to buy something from a salesperson, and you should always work for a negotiation that benefits you both.
Practice Negotiating for Better Business
These steps should help you learn effective negotiating, but the best way to increase your negotiating abilities is through practice, just like any skill. The longer you do negotiation, the more you will understand the potential pitfalls and maneuvers throughout discussions. More practice will allow you to improve your negotiating skills on a base level while also giving you more understanding of specific buying and selling situations. Negotiation might seem scary because of the potential stakes of a discussion, but salespeople aren’t going to be mad at you for attempting to negotiate a difficult solution, especially if you’re working for both of your best interests. The ability to negotiate a better deal and a better price can bring with it a whole host of benefits, so the more you learn, and the more you practice, the better results you’ll see.