Doing business will entail you to enter into negotiations. Whether you position yourself as a buyer or a seller, how do you negotiate? Negotiation guru Alan McCarthy offers these top ten rules:
1. Don’t negotiate.
Unless you need to negotiate, this first rule applies whether you are the buyer or the seller, according to McCarthy. Sounds ironical, though, when you want to know about what you can do during negotiation. But the message here is – only negotiate when you need to.
2. Don’t negotiate with yourself.
McCarthy explains that you may be tempted to run down to make the deal more acceptable to the other party in the process of losing confidence in yourself.
3. Never accept the first offer.
McCarthy emphasizes that you never accept the first offer because there is always a better offer than the first one.
4. Never make the first offer.
This is different from rule number 3 . McCarthy explains in the video why you need to avoid making the first offer at all cost.
5. Listen more, talk less.
McCarthy advises to use your ears and your eyes 80% of the time during the negotiation. Only 20% of the time should be allocated for the mouth.
6. No free gifts.
The message McCarthy sends here is “They should work for it.”
7. Watch out for the “Salami” effect.
McCarthy illustrates this rule using carpet fitting service as an example. In this video, he warns that you can “salami” yourself on the negotiating table by setting a particular value for a product or service of the other party you’re doing business with. And this is one thing you would want to avoid.
8. Avoid the rookie regret.
Ask these three trading questions to prevent the feeling of remorse after negotiation:
- What is it going to cost me?
- What is its cost to the other guy?
- What do I want in return?
9. Never make a quick deal.
There should be a time scale before arriving at a decision. McCarthy advises to be wary of quick deals.
10. Never disclose your bottom line.
In this video, McCarthy stresses that, regardless of your personality, you never give information to the other party about your bottom line; otherwise, such information may be used to your disadvantage.