Ten Negotiating Mistakes That Cost You Thousands

Success in negotiating is a lot like becoming proficient in martial arts. You must learn to use of timing, power and leverage to your advantage. In bargaining contests, Americans tend not to do very well when compared to people in other countries around the world. There are some real black belts out there and here are some common mistakes that often keep us from getting the best deals:

MISTAKE #1: Being Afraid To Bargain: If a martial artist enters the ring and is the least bit afraid of his or her opponent the contest has already been decided in the other person’s favor. Some of us are a bit timid when it comes to haggling because we’re afraid to be rejected. In reality, there is no rejection in negotiating. If you ask for a discount on your laundry from a dry cleaner that you patronize on a regular basis and the owner says, “no” what have you lost? Nothing! However, the power to choose is now in your hands. You have the choice of continuing to pay full price or take your business elsewhere. It’s totally in your control.

MISTAKE #2: Forgetting That Everything Is Negotiable: Master martial artists take every opportunity to practice whether in a tournament or just by themselves. Master bargainers are constantly aware that anything is negotiable under the right circumstances. I have gotten discounts on gasoline for my car, substantially reduced peoples’ IRS tax bills and even obtained deals on medical care. You would be surprised to find what others will do to earn your business as long as you keep in mind that there must be a benefit to them of doing business with you.

MISTAKE #3: Believing It’s Not Worth Haggling Over Small Items: Martial artists do not become black belts overnight but rather one day at a time. Many Americans only think about negotiating when it comes to big-ticket purchases like cars and houses. The real savings come when you get discounts on things you buy more frequently. For example, if you and your spouse eat out at nice restaurants once a week costing eighty dollars and you negotiate a thirty percent discount that saves over $1,200 a year. I generally only pay half price for meals saving even more. I get discounts on trees and plants at my local nursery, parking at the airport, food at the nearby Chinese restaurant and dozens of other establishments who value my business.

MISTAKE #4: Thinking About Ourselves First: There’s an ancient Chinese saying, “To defeat an opponent you must first think like an opponent.” Many people only consider the benefits they’ll get out of a negotiation. Master bargainers are always thinking about what’s in it for the other person to accept a deal, not what’s in it for themselves. They know that if there isn’t a clear benefit to the other party they will never seriously consider an offer. Finding ways to help people solve their problems will make it easier for them to give you what you want. Most businesses make their money on repeat business because this eliminates their marketing costs. If you are a regular customer you deserve a discount for saving them money.

MISTAKE #5: Making The First Offer: Martial artists try not to make the first move when sparring because it immediately reveals their speed and timing to their opponent. Try not to make the first offer anytime you bargain because it limits your options. Even if the price is clearly marked, you can always ask, “Would you take less to sell this today?” If you are a buyer and you make the first offer it sets the lower limit because now you can only raise your price. If you are a seller and you name a price you can only go down from there.

MISTAKE #6: Being Too Nice: If a martial artist has to make the first move he is likely to be pretty aggressive in hopes of scoring a few early points. If you must make the first offer, make it a low one if you’re buying and high if you’re selling for the reason stated above. It sets the lower or upper limit and reduces your options. Being aggressive with your first offer leaves room for negotiating. Don’t worry about being nice as the other party can always say, “no.” You never want the other party to agree to your first offer because that leads to the next mistake.

MISTAKE #7: Being Too Eager: A martial artist always starts a contest by testing his opponent. Take your time when bargaining. In America “time is money” but in other countries it is used for building relationships. There is one word that a black belt negotiator never wants to hear early in the bargaining process – “okay.” This means that you paid too much or asked too low a price because you got impatient. Take your time and don’t put yourself under any undue pressure. When I was in Japan negotiating a television sponsorship contract, my hosts and I spent two weeks just eating sushi, drinking sake and singing karaoke (badly) but not one word was mentioned about the reason for my visit. It wasn’t until we had built a mutual level of trust that the talks began.

MISTAKE #8: Not Doing Your Homework: Most martial arts tournaments are won or lost before they ever begin and it’s the same with negotiating. Just like a fighter would never step into the ring without finding out everything he can about his opponent, you should too. If you’re buying a car, search the web to find the dealer’s invoice, when the new models will be coming in and if there are any bonuses or cut-rate financing available to you. No matter what you are buying or selling you can find out valuable information such as: what’s the current demand, the profit margin, and other priceless data.

MISTAKE #9: Not Playing To Win: Martial artists never enter the ring hoping for a tie. Everyone has heard that in negotiating you want to develop “win-win” solutions but, in reality, nobody believes in tying. You don’t want your opponent to get the better end of the bargain and neither do they. This is not to say that you try to take advantage but you should always try to get the best deal you can and assume that the other party will do likewise. You don’t need to be concerned about fairness because if they agree to your offer they must feel it benefits them as well.

MISTAKE #10: Missing Opportunities To Negotiate: Every time you pull out your wallet to pay for a purchase you should ask yourself, “Is this a chance to practice my bargaining skills?” This is not to say that you absolutely must bargain on everything but every transaction adds up and the more you bargain the better you become. Black belts practice every day and so should you. Start by going to garage sales and then moving up to flea markets where the sellers are generally more experienced. After your skill and confidence have grown then go to antique and collectible stores where prices are generally not set in stone. Eventually, you’ll be ready for the ultimate test – haggling over large appliances, cars and houses. By negotiating more often you not only put more money in your pocket but also increase your negotiating skill. You’ll also find that bargaining can be a fun and profitable way to spend a couple of hours.

Copyright (c) 2007 Michael Soon Lee