Examples of Getting Something in Return for a Concession to Reduce the Price

For a Seller

• Larger volume

• Longer commitment

• Shorter credit periods

• A more beneficial means of payment

• More flexible technical specifications

• Customer to take on some of the supplier’s work

• Amendment to warranty terms

• Customer agreement to buy extra services or consumables

• Customer agreement to test or list another product

• Customer to prescribe or recommend the product to other potential customers

• Simplification of packaging

• Change to shipping terms and conditions

• Change to ordering system

• Lighter late delivery penalties (exemption period, rate, ceiling, etc.)

• Exclusive supplier status

For a Buyer

• Lower volume commitment

• Shorter commitment

• Longer credit periods

• A more beneficial means of payment

• Adjustment to technical specifications

• Supplier to take on some of the customer’s work

• Extension of warranty terms

• Beneficial agreement on extra services or consumables

• Beneficial agreement to test or list another product

• Supplier offers the customer an advantage over her other customers

• Change in packaging

• Change to shipping terms and conditions

• Change in the ordering system

• Tougher late delivery penalties (exemption period, rate, ceiling, etc.)

• Exclusive customer status, for a set period

Key Points to Memorize

• Any concession comes with getting something in return—that is an absolutely essential rule.

• Prepare a list of potential compensatory items before the negotiations.

• Start by identifying a preliminary question: “For your part, would you be prepared to look at the issue of…?”

• Formulate an opening: “If you [grant me such a specific concession], I could revise my position.”

• Formulate a counteroffer: “If you [grant me such a specific concession], here is precisely what I can offer you.”

• Under difficult circumstances, look for compensatory items that involve little cost for the other party.

Some Sensible Questions to Ask Yourself

In General

• What do I expect from my negotiating partners in exchange for a price adjustment?

• What else could I obtain in return for concessions made?

• Which are the most profitable items in the short term?

• Which are the most beneficial items in the long term?

• Which are the ones that seem most readily acceptable to the other party?

For a Particular Deal

• What are my negotiating partner’s “real needs”?

• What means could be imagined of meeting those “real needs”?

• What are the interests that I am seeking to defend?

• What are the best means of meeting them?

For example, a buyer tries to win staggered payments in order to ease his cash flow. The seller prefers a cash payment in order to limit risk. The seller could propose staggered payments, subject to the provision of a guarantee.