Tips for Negotiating Purchase Price and Terms

Your greatest opportunity to receive a high return on your time is through effective negotiations. A few minutes or hours, here and there, negotiating effectively can add up to big bucks.

You purchase houses, cars, boats, furniture, fixtures, home repairs, print jobs, service contracts, etc. You also lease office space, warehouse space, automobiles, hotel room and trade show space. If you could cut 10% on average off the price of these items, we’re talking hundreds of thousands, if not millions, of dollars, over time.

So if you care about money at all, you HAVE to become an effective negotiator. Here’s how.

1. Practice saying, “Oh, we can’t afford that.”
   If you aren’t good at playing the poor-boy role, no matter how much money you have, you’re going to have a hard time bargaining for best price. So practice. Say, “Boy, that’s just too expensive for me” and “I don’t have that kind of money.” Feel free to precede these statements with “I’d LOVE to own something like that, but …”




2. Hide your excitement.
   You want them to think you can take it or leave it. So don’t let them see your excitement. Be cool.




3. Let ‘em sweat. Don’t return their call for a day or two. Salespeople hate it when communication goes cold. They get paranoid and assume you have little interest. Then, when you talk again, let them do the talking. They’ll start lowering the price.




4. Get competing bids. This is an absolute must. Get three bids, minimum, and let each know that you’re getting several bids. Moreover, let each know that “price matters” to you.




5. Walk away. More than being willing to walk away, do it! Walk away a few times. You can’t get the best price without doing so!




6. Make them like you. Who wants to give a deal to a jerk? Not me. So it’s critical that the seller like you. Be nice. Compliment the person, company and product, and express appreciation for his/her work trying to get it to a price you can afford. After all, you DO appreciate these efforts, don’t you?




7. Ask, “Is this your very best price?” Also ask, “How might I be able to get a better price?” You’ll be amazed at the answers.




8. If you can’t, get someone who can. If you just cannot negotiate and bargain for your advantage, find someone who can. Get someone to make the call and negotiate for you. There are people who love to negotiate. They will be flattered by your request and enjoy the task.




9. Price is just one criterion. The terms are as important as price. Negotiate hard on things such as cancellation rights, assignability and renewal options.




10. Ask and ye shall receive. Ask a lot of questions. If you’d prefer something, ask for it! All they can say is no! And don’t assume you know what they can and can’t do; just ask.




11. Don’t make the first offer. If an asking price has not been established, don’t throw one out yourself. Ask the buyer for a price. Sometimes, you’ll be surprised how low it is. If you had offered a price you might have missed high and, well, your money is in their pocket.




12. Silence is golden. Talk little. Listen a lot. Pause for long periods just to think. The deal will only get better. All you need to do is repeat the things that you hear and like (so they know you heard them).




13. The power of the middle point. Once negotiations are under way and the seller has thrown out an asking price and you have made an offer, the middle point is where most deals are made. So be careful. If the seller is at $15 and you won’t pay more than $12, don’t offer $10.50! The middle point between $15 and $10 is $12.75 and you’re on the path to failure. In this situation, you must either offer $9 (so the middle point is $12) or, if you’re afraid that such an offer would be insulting, just say, “That’s just too much money.” You don’t want to even throw out a price if the asking price is that high. You need a lower asking price.

If you’ve done your job well and, late in the negotiations, the middle point is your target price, you’ll know you’ve likely won because, when the negotiations are close but stuck, you’ll say, “Let’s split the difference.” Such will almost always be accepted.

One more thing. Get in your mind this important fact: There is nothing insensitive, fake or mean about negotiating hard. It’s about being a good steward of your money. Being frugal is a virtue. So long as the person on the other end of the negotiations is a competent adult — and you can assume he/she is unless you see obvious signs to the contrary — then you can assume he/she will agree only to terms he/she is willing to accept. He/she will NOT agree to terms that are unacceptable, right? No rational person would. So don’t be afraid to negotiate. Even negotiate hard. If you reach an agreement on terms, then you can rest assured that it’s a win-win.