Negotiation skill | Never accept the supplier’s first offer!

By justchinait
October 23, 2020

In competitive negotiations, cunning suppliers often set up traps to deceive purchases.

My friend Mr. Wang once told me about his experience of buying a used car:

Mr. Wang took a fancy to a 2015 black Camry car from his neighbor. The neighbor is very careful about the maintenance of the car, and the car has never had any breakdown. Because the neighbor wanted to change to a new Lexus car, he plans to sell his Camry car for 150,000 CNY.

Mr. Wang is worried that others will early buy the Camry car. Although he only has 135,000CNY in cash, he still tries to find the neighbor to discuss buying the car. He originally thought there would be some bargaining, such as paying 135,000 CNY to drive the car away and then paying the balance of 15,000 CNY within six months.

Unexpectedly, the neighbor directly agreed: “The car will be sold to him at 135,000CNY! The transfer will be made today!”

On the way to the vehicle management office, Mr. Wang kept muttering in his heart, thinking that the car must be tricky, and he was cheated by the neighbor like a fool. So he was not excited at all, but suspected that he was fooled.

“If my wife asked me why my neighbor sold me the car at a price so much lower than the market price, how should I answer it?”

“There must be something wrong with this car, or why is he so eager to sell the car?”

Mr. Wang felt panic in his heart, and he wished that there would be an earthquake and a typhoon to send them back from the way to the vehicle management office.

Whenever I sit on a black Camry driven by Mr. Wang, Mr. Wang always complains about the “problem” of the car, such as a loud engine sound when starting or strange noise when braking. In fact, there is no problem with the car at all. Since he bought the car, Mr. Wang never talked to his neighbors anymore. Instead, he told me secretly that his neighbor was a big liar and sold him the “problem” car.

You see, because of a mistake by Mr. Wang’s neighbor, a good deal turned into a bad deal, and in the end they even can’t be friends.

This fatal mistake is: “Accept the first offer.”

For all buyers, the first rule of competitive negotiation is always: “Don’t accept the supplier’s first offer!”

Let’s rethink. If Mr. Wang’s neighbors confidently rejected Mr. Wang’s 135,000 CNY offer, what would happen next?

Mr. Wang will definitely admit that his bid is not worthy of this good car, and begged his neighbors to consider the proposal of paying off the 15,000 CNY balance within the next six months. If the neighbor is smart enough, he still shouldn’t agree to Mr. Wang’s request immediately. Instead, he should consider the interest of the balance payment. Mr. Wang should pay 16,000 CNY within 6 months. Or reduce the delay in payment time, for example, the balance must be paid within 3 months. Or tell Mr. Wang that someone will pay the full amount of the car tomorrow, so Mr. Wang must pay the final amount of 20,000 CNY within 3 months.

At this time, Mr. Wang will be a little bit embarrassed, begging neighbors to consider the “relationship” and give them some more grace.

At this time, the neighbor can make a symbolic concession and sell the car on the condition of prepayment of 135,000 yuan + 15,000 yuan within 3 months.

In this case, Mr. Wang would think that he spent 2 hours bargaining in front of his neighbors, and finally bought a good car with a “lower” bid and “very good” terms!

He would excitedly tell his wife how he “successfully” convinced his neighbors.

He will think that neighbors have given him favors, and will greet him when he sees them.

Whenever he meets people, he will say that this is a good car. Even if the engine noise is a bit loud when starting, even if there is a bit abnormal noise when braking, in Mr. Wang’s eyes, these are not enough to prove that the car is not good.

So, what caused Mr. Wang’s change?

It is human nature, and people always try their best to take advantage.

So smart suppliers will deliberately quote a high price when they make the first quotation, waiting for the purchase to bargain.

This is like when my wife is visiting the clothing store, almost all the clothes are “discounted”. Some even write the original price and the discount price together. The sales staff will tell my wife: Buying this dress for 800 CNY, you save 200 CNY.” In this way, my wife will happily buy the clothing, telling me how smart she is and “saving” money for the family. Whether the seller made 200 yuan less, only the merchant knows best.

Let us return to the topic of competitive negotiation.

If the buyer accepts the supplier’s initial quotation without negotiation, it will happen:

  • It damages the confidence of the supplier (will this customer pay for it?)
  • Encourage suppliers to raise prices (did I quote the price lower?)
  • Be underestimated by the supplier (this buyer is unprofessional)

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