To Negotiate or Not to Negotiate
Many buy side and sell side professionals lose clarity in pursuit of the deal. When deciding on whether or not to negotiate, plan ahead as to what you walk-way fee or price would be or what package would clinch a deal. Poor negotiators begin a negotiation even if the money discussed falls into the negative fee range. What do we mean by negative fee range. Assume you charge $10000 for a service or product, and you know you will profit when you sell it at any price over $7000. Your cost price is $6000. And between $6000- and $7000 is your breakeven price after factoring some other costs. When offered $5000, you should not even consider negotiating as the price offered is in the ‘negative’ zone ie you will lose money no matter how you negotiate this amount; unless you can get it to $6000+.
Now at $7500 for example, the price offered is in the ‘positive’ zone. This means even if you accept the first offer as a seller, you will make a profit; and it is likely you might be able to get a higher price.
So, when negotiating, consider if you are in the positive or negative zones even before entering a negotiation
Tags: negotiation
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