Master Negotiator – Prices, Terms & Rules

You owe it to yourself to become excellent at getting the best deals, whether you are buying or selling as a business owner. Your ability to negotiate well on your own behalf can save or make you a fortune over the course of your career in a larger sense. All of life is a negotiation. You are always negotiating in some way. When you drive from one place to another, you negotiate through traffic as you let other people get in front of you, and they let you get in front of them. When you go to a restaurant, you negotiate to get a table. First of all, to get the kind of table you most like, you negotiate all the elements of your work life and all the things that you do or don\’t do.

You negotiate prices, terms, schedules, standards, and a thousand other details all day long. The process is never-ending. It\’s not really a question of whether or not you negotiate. The only question is, how good a negotiator are you? One of your chief responsibilities in life is to learn how to negotiate well in every situation. You need to be able to get more of the things you want faster and more easily than you could if the other person were better at negotiating than you are.

There are several universal principles of negotiating that you can learn in practice that will help you to get more of the things you really want better, faster, and easier than ever before. When you apply these principles consistently, you will improve every aspect of your life.

Something is worth whatever someone is willing to pay. Many people are confused about this issue. They think that individuals or organizations determine what others will pay. However, even schoolchildren know that something is worth only what someone else is willing to pay for it, no matter what anyone else says or demands. Prices are merely estimates set arbitrarily as a guess at what people will pay.

Every discount markdown of prices or business bankruptcy is an admission of a failure to guess correctly. The product or service producers guessed wrong when they set the price. Customers did not feel that it was worth that price and either buy something else or kept their money.

This is why every negotiation is different, and there are no hard and fast rules determining buying or selling prices for products or services. All prices are therefore negotiable. Only the person who is being asked to pay for the good or service or to pay a certain wage is in a position to determine what that thing is worth to him or her. When people say that something should be worth a particular amount or someone should receive a certain salary, they don\’t realize that the word should is meaningless in negotiating. All prices are guesses. All prices are established arbitrarily, at least initially. It\’s only what customers are willing to pay in the marketplace that determines whether those prices are correct. If the prices are too high, the products will not sell, or the prices will be reduced. The customer in the marketplace will ultimately decide how much will be paid for everything.

Where are you experiencing price resistance in the sales of your products or services? How could you increase the value of what you sell in such a way that a critical customer would choose to pay you more for it? How could you increase your value and attractiveness in such a way that your company or your customers would willingly pay you more for what you do?

Everything is negotiable. All prices in terms are set by someone. They can therefore be changed by someone. This does not mean that they will be changed, but it does mean that there\’s always a chance. When you begin looking at life as one long negotiating process, you will find that almost every situation contains elements that you can negotiate to improve the terms and conditions for yourself and others.

  • Rule. Prices are the best guess estimate of what the customer will pay.

This means that asking prices are only loosely connected to market realities. The cost of manufacturing and marketing a particular product or service often has very little to do with the price that is put on it. Price is arbitrary and merely reflects someone\’s opinion of what the market will bear at that moment.

  • Rule. Every price was set by someone and can therefore be changed by someone.

Don\’t be intimidated by written prices on signs or in letters or contracts. Assume that they are written in pencil and can easily be erased and replaced with something more favorable to you.

The key is to ask. Begin today to ask for better prices and terms. No matter what you are offered initially, make it a game.

  • Ask politely ask in a warm and friendly way.
  • Ask positively, ask expectantly, ask confidently.
  • But be sure to ask.

You will be amazed at how quick people are to improve the prices and terms for you. If you ask now, everyone wants to improve his or her situation. Human beings are goal-oriented, purposeful in their behavior. Whether their aims are clear or unclear, they are always driven or motivated toward achieving more of something. Although that something may change from minute to minute, this is the entire reason behind buying, selling, and negotiating. From infancy to old age, you are ambitious. You want to improve your life in some way or some part of your life. If you are earning a certain amount of money, you want to earn more. If you have a certain level of physical health, you want to be healthier. If you have a home or an apartment, you want a larger one. If you get a larger one, you want a second one somewhere else.

If you have a car, you want a bigger car. If you have a bigger car, you want two cars and perhaps even a motorcycle or a motorhome. It\’s normal and natural and completely human for each of us to continually strive to get more, better, faster, newer, and cheaper of everything and anything we can think of. The only limitations on human ambition are the limitations imposed either internally or the limitations that we place on our own minds or externally, by the limitations imposed upon us, by our personal resources, law, and society.

  • Rule. When you see no way to get more of what you want, you will do nothing at all.

For example, you may be driving an old car and are passed on the road by someone driving a $300,000+ Rolls Royce Corniche.

You may fantasize and think about how nice it would be to drive such a lovely car, but you can\’t even begin to imagine earning the kind of money that will enable you to pay $300,000+ for a car. Therefore, the sight of the Rolls-Royce may cause you to feel dissatisfied with your current vehicle, but it would not motivate you to take an action of any kind. The real differences in levels of ambition are explained by differences in ability and opportunity on the one hand and the intensity of desire and belief on the other. If you really believe that you can get from wherever you are to wherever you want to go, you will be continually taking action to move yourself from your current position toward your goals.

This is why people negotiate.

  • Rule. If you are either completely contented or if you feel completely helpless, you will not act to improve your condition.