Haggling 101
This story appears in the September 1999 issue of Entrepreneur. Subscribe »
Negotiation was my law school roommate's favorite sport. When it came to haggling, he was my first coach, and I recall well the first lesson he gave me: "Remember, Marc, you don't need it, you don't want it, you've already got one, and theirs is broken!"
Here are four powerful tactics for getting a leg up when you first sit down to talk turkey:
- Put on your best poker face. Ultimately, successful
negotiation is about many things: preparation, perseverance,
diplomacy and creativity, to name just a few. But when you open,
it's mostly about one thing: attitude.
He who appears to want the least gets the most. Shrewd negotiators know that one of the biggest mistakes you can make at the beginning of a deal is to seem too eager, overly enthusiastic or just plain desperate. You'll leave yourself wide open for a sucker punch.
Instead, look hesitant, indecisive or somewhat bored. If you're not, pretend. This will lower your opponents' expectations, weaken their resolve and force them to consider concessions they were hoping to avoid. You'll talk about price and terms soon enough. But before you do, let a little reverse psychology bring the other side closer to the deal you really want.
- After you . . . Here's one of the all-time great
negotiating maxims: "He who mentions the first number
loses." Just like any other all-time great negotiating maxim,
this one's true...most of the time. You'll never know if
you've made your best possible deal if you're the one
putting the first number into play. The buyer might have offered
more, the seller might have taken less--if only you had let them go
first. But here's the big secret: Keep your mouth shut and
listen for the other side's first figure. Often, it will be a
pleasant surprise.
What's the exception to this rule? If both sides really know what a deal is worth, the side making the first offer gains the upper hand by defining the negotiating range. This leads to our next fundamental precept: "You don't ask, you don't get."
- Go high or go home. Regardless of who gives the first
number, start by asking for the best terms you can justify...with a
straight face. There are four good reasons for this twisted little
ritual. First, you can't expect to make a deal without making
concessions. Start far away from your bottom line and you'll
have plenty to give. Second, your opponents need to
participate in the outcome. Don't deny them a good game.
Besides, no one likes a take-it-or-leave-it offer. Third, the
higher you set your goals, the better your chances of achieving
them. Finally, it's just the way of the world.
Of course, this is really just one giant mixed message. Sometimes I wonder how it all got this way. Among members of the Ohlone tribe (pre-European inhabitants of the San Francisco Bay area), for example, haggling was considered rude. They emphasized generosity and sharing, not profit. Low-ball offers only got you a lousy reputation.
I wish we did business more like the Ohlones, but we don't. Unless you really trust your opponent, don't start by laying your cards on the table. It's a rookie move you'll probably regret.
- Flinch. Finally, there's an important corollary to
the "He who mentions the first number..." rule: Never
take the other side's first offer.
Be savvy. Your opponent may not ask for the moon, but they'll probably ask for more than they expect you to give. So frown, glare, smirk, clam up or politely reject the first thing you hear. Chances are, they'll do better. And even if their first offer is unusually generous, flinch. You never know just how low--or high--they'll really be willing to go.
Marc Diener works in Los Angeles. You can reach him at MarcDiener@aol.com
