Bargaining for the best price on a new car requires less negotiation skills than negotiating on the purchase price of a business, but both require a two-way negotiation.
To gain new techniques and skills in negotiation, consider using Negotiation Training Course offered by pdtraining in Christchurch, Hamilton, Dunedin and other cities in New Zealand.
The seller in Wellington wants the highest price while the buyer wants the lower price; you can see where the two parties have completely different outcomes they want to achieve. And it depends on which side of the equation you’re one as to which negotiation skills you’ll want to actively use, which is why attending a professional negotiation training is so important.
The concept outlined in this article is for the buyer or purchasing manager and it has to do with setting in place a defined amount that you will not go over; no matter what! Although having a WAP from a selling perspective is also a valid negotiation skill.
Knowing your max purchase limit is half the battle while researching the real value of an asset is the other component a buyer should invest some time into.
In any negotiation, it is important that you keep your WAP (Walk Away Price) to yourself, especially if it is significantly less than your initial offer.
If the other party knows that you will be willing to take a lot less than you are offering, then you will be negotiating from a position of weakness. If the other party knows, or has an idea of your WAP then it stops being your WAP and simply becomes your price.
Establishing a WAP in your mind, and ensuring that those negotiators on your side of the bargain (and only they) know it, allows you to take your strongest possible bargaining position. The other party will try to argue you down from your proposed price, so you will need to remain firm. If they want to pay less, then you may be prepared to agree on a lower price in return for concessions.
The opposing party will then have to consider what is acceptable to them. Rather than push too hard and lose out on a deal which would be beneficial to themselves, they will have their own areas where they are willing to make concessions.
However, if they know that you have set a WAP that would save them money, they will simply hold firm at that price. They have no incentive to make concessions to you as a negotiator. In many ways, negotiation is about keeping as much to yourself as you possibly can until you can no longer maintain that position.
Once you have set your WAP, it is essential to keep to it. A walk away price becomes absolutely meaningless if you are not prepared to walk away should it not be met. You should give the impression to opponents in negotiation that you could walk away at any time.
They will, after all, not be prepared to stop once they get a price which is satisfactory to them – they will look to wring a bit more value out of the deal for themselves, testing you to see what you will give up. A warning against setting your WAP unrealistically low is that the other party will not take you seriously if you are a pushover in negotiations.
They will seek to test you at every turn.
Pdtraining delivers 1000’s of professional development courses each year in Wellington, Auckland, Napier, Christchurch, Hamilton, Dunedin and Tauranga, so you can be assured your training will be delivered by a qualified and experienced trainer.
All public Negotiation Training courses include am/pm tea, lunch, printed courseware and a certificate of completion. Customised courses are available upon request so please contact pdtraining on 1300 121 400 to learn more.