Negotiating is a very broad topic. People negotiate all kinds of different objects, from salary to the price of a car or house or even where to go to dinner that night. There are many books and articles written about how to best properly negotiate. At RewardBus, however, we plan on informing you of how you should feel go into a negotiation and how to leverage the power from that feelings.
“He who cares the least has the most power.”
The most important thing to any negotiation is to recognize the ability to walk away at any point. If you are willing to say no to the offer and live with the consequences, then you will be in a position of power to ask for what you want. This is one of the key reasons many people suggest trying to find a new position while continuing to work. It gives you power and negotiating leverage. Consider the two options: if you are willing to have the deal fall apart, you are more willing to ask for what you want. You are also projecting your scarcity to the other person in the negotiation. On the flipside, if you are nervous that the deal will fall apart, you may be more willing to bend to demands or find yourself in a deal that is not optimal.
Most of my experience negotiating or seeing negotiations is in car dealerships. The price of a vehicle is generally a starting point to the final price that will be on the contract. As has been written elsewhere, car dealerships no longer make a lot of money on the “front-end” of the car (the actual sale of a vehicle). This is especially true for new cars. Some dealers still make some money on used cars, but that is diminishing as the ability to research cars has increased. Think of the past: if you are unable to know the value of a make and model, you will have more uncertainty in the actual cost to the dealer. If you do not have a CARFAX (or similar condition report), you are unable to know the actual condition of a car (a so called “lemon”). As tools have increased to give consumers more information, dealers have shifted their negotiation to the “back-end”, or the loan structure and insurance portion.
A similar argument can be made for houses: products such as Trulia, Zillow and Redfin have opened up the MLS listings to both buyers and sellers, flooding consumers and homeowners with both options and information. Although it is certainly not a perfectly precise estimate, the Zillow Zestimate provides a rough guess at the value of your house. Realtors are no longer able to undercut the price for selling to get the contract finished and collect their commission. The same can be said for having a buyer pay extra for a home.
Information yearns to be free.
In conclusion, the key to negotiation is knowing your power. You want somebody from the other person, they want something from you. Understanding where you stand and knowing your power to say no will allow you to negotiate more strongly with the other person and should increase your likelihood of getting a good deal, whatever that deal is.