Dollars can be won or lost in a negotiating battle.
Think back on your day, how many times did you negotiate something? Here's a short list of tasks that involve negotiating: - Buying A Car -Buying a house -Your Salary -Where you eat lunch with friends -Buying off of Craigslist...
And the list goes on.
There's not doubt that haggling is part of our lives, and being good at it will get you places.
So how does one get good at the "art of the deal?" There's much more to negotiating than what meets the eye, but there is one sure-fire technique to walking away happy.
It's called Anchor-Adjust.
Here's how it works.
When you begin negotiations, somebody has got to throw the first offer out there - be that person.
Take the example of buying a car - here are the two scenarios: First: 1.
The dealer starts with the MSRP (Manufacturer suggested retail price) of $24000 - a ridiculous number that is way above the true value of $18000.
2.
You respond with a lower offer 3.
Negotiations slowly work the price down to $22,000, not bad, but still $4000 above the true value of the car.
Second: 1.
You (the buyer) come in confident and offer $18000 2.
The salesman laughs at you and counter-offers 3.
Negotiations slowly work up to $20,000 It's been shown across a slew of studies that sale price doesn't stray drastically far from the "anchor" price.
That is, whoever has the machismo to throw out the first number will walk away from the deal a winner, while the other poor soul will wonder why he or she just lost money.
It's been shown across numerous psychological studies that people are willing to accept a "representative" price as a real idea of what to pay for an item.
There is no distinction between cases where this price is near the actual price or when it is far from the actual price.
By being the first to say a number, you are establishing a representative price and the other party will unconsciously accept it as a legitimate number.
Test this method out, next time you find yourself presented with a negotiating task, take the stronger position and set a price.
See if you can walk away from the deal up a few dollars.
Then let me know how it goes by sending me a message on my website, which you can get to below.
Think back on your day, how many times did you negotiate something? Here's a short list of tasks that involve negotiating: - Buying A Car -Buying a house -Your Salary -Where you eat lunch with friends -Buying off of Craigslist...
And the list goes on.
There's not doubt that haggling is part of our lives, and being good at it will get you places.
So how does one get good at the "art of the deal?" There's much more to negotiating than what meets the eye, but there is one sure-fire technique to walking away happy.
It's called Anchor-Adjust.
Here's how it works.
When you begin negotiations, somebody has got to throw the first offer out there - be that person.
Take the example of buying a car - here are the two scenarios: First: 1.
The dealer starts with the MSRP (Manufacturer suggested retail price) of $24000 - a ridiculous number that is way above the true value of $18000.
2.
You respond with a lower offer 3.
Negotiations slowly work the price down to $22,000, not bad, but still $4000 above the true value of the car.
Second: 1.
You (the buyer) come in confident and offer $18000 2.
The salesman laughs at you and counter-offers 3.
Negotiations slowly work up to $20,000 It's been shown across a slew of studies that sale price doesn't stray drastically far from the "anchor" price.
That is, whoever has the machismo to throw out the first number will walk away from the deal a winner, while the other poor soul will wonder why he or she just lost money.
It's been shown across numerous psychological studies that people are willing to accept a "representative" price as a real idea of what to pay for an item.
There is no distinction between cases where this price is near the actual price or when it is far from the actual price.
By being the first to say a number, you are establishing a representative price and the other party will unconsciously accept it as a legitimate number.
Test this method out, next time you find yourself presented with a negotiating task, take the stronger position and set a price.
See if you can walk away from the deal up a few dollars.
Then let me know how it goes by sending me a message on my website, which you can get to below.