How many times in the art of negotiating does a person give a price range or a price maximum that they are willing to pay. You know the routine, I will not pay a penny over $20,000 or I will pay you $40-$45,000.
When you do this you are immediately sending a signal to the other party. For example, if you say, "I will not pay over $20,000" or "I only have $20,000 to spend" for this item you have immediately told the other party that you, in fact, will pay up to $20,000 for that article. Now the other party has a significant advantage over you since you have told him that you will pay $20,000. You have to make the choice at that point between paying $20,000 or walking away because you have already tipped your hand and lost all your negotiating power.
The same thing holds true when you give a price range. Let's say you want to buy a new car and you tell the seller that you will pay $40-$45000 for the car. You are thinking low … that he will sell the car for $40,000 and the seller is thinking high … You will pay $45,000 for the car. You have tipped your hand because you gave him a price range. He now knows that you will pay $45,000 for the car. Again you have lost your power of negotiating.
Don't ever tip your hand and give a price range or give a maximum price when you are buying or selling any kind of item.
Many people don't like to negotiate ... especially in the United States. Negotiating is very much a way of life in most other countries.
Negotiating can be a lot of fun and save you a lot of money but you have to be very careful how you go about doing it.
When you do this you are immediately sending a signal to the other party. For example, if you say, "I will not pay over $20,000" or "I only have $20,000 to spend" for this item you have immediately told the other party that you, in fact, will pay up to $20,000 for that article. Now the other party has a significant advantage over you since you have told him that you will pay $20,000. You have to make the choice at that point between paying $20,000 or walking away because you have already tipped your hand and lost all your negotiating power.
The same thing holds true when you give a price range. Let's say you want to buy a new car and you tell the seller that you will pay $40-$45000 for the car. You are thinking low … that he will sell the car for $40,000 and the seller is thinking high … You will pay $45,000 for the car. You have tipped your hand because you gave him a price range. He now knows that you will pay $45,000 for the car. Again you have lost your power of negotiating.
Don't ever tip your hand and give a price range or give a maximum price when you are buying or selling any kind of item.
Many people don't like to negotiate ... especially in the United States. Negotiating is very much a way of life in most other countries.
Negotiating can be a lot of fun and save you a lot of money but you have to be very careful how you go about doing it.
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