Friday, September 24, 2010

Negotiation - Why You Will Be Lost Without This Skill

The ability to negotiate anything in life can dramatically increase the value you receive for that price you pay. There are some people that love negotiating, while there are plenty of others that is negotiated. Either way, negotiating is the key skill that you want to work on developing in your life.

I once had a friend who really enjoys playing guitars. There was a certain kind of guitar he wanted, I think it was a Les Paul something addition. He knew exactly what it was and what it was worth.

My friend had been saving money for a long while because he wanted to purchase this particular guitar. He looked online and local music stores trying to find the best deal before you purchased the guitar.

I was fortunate enough to be with him on the day he went to a local music store to purchase the guitar he wanted. The music store had about two or three different of these guitars he was looking at. He noticed on one of the guitars that some of the wood had a few scuffed marks on it. This guitar normally went for around $2000.

He had done enough research to know the music store probably paid around $1000 to $1200 for the guitar. The guitar was already marked down to $1750. He went to the salesman and told him he was interested in purchasing the guitar. The negotiations then began.

My friend immediately pointed out the scuffed marks on the wood of the guitar. He knew that this was going to be his leverage point in getting a better price on the guitar. He immediately offered $1300 cash for his walk out the door price.

The salesman had to go check with his boss, the owner of the store, if they could do this deal. The salesman came back and told my friend that he was sorry, but he could not take such a low offer.

For the next hour, my friend kept negotiating with this gentleman, who had to keep going back and forth to his boss in order to ask about the deal my friend was offering. It really became interesting when my friend got to $1450 cash. He offered $1450 cash, as the walk out the door price. The salesman came back and said he could not take $1450.

By this time, my friend decided to try a different strategy in negotiation. He then started to lower his price. So, his next offer was $1440 and a free box of strings. The salesman didn't think twice and headed to ask his boss. He came back and regretfully said he could not take the offer. So my friend made another offer, $1430 and three boxes of strings.

The salesman when check with his boss once again and came back with a no. The next offer however was different. He offered $1420 and five boxes of strings. Oddly enough, the salesman came back and said okay you have a deal.

My friend and I looked at each other in pure amazement. The boxes of strings cost the music store a little bit of money. If you would average out the cost of the strings and the guitar, music store would have been better accepting the cash offer of 1450, much better actually.

The moral of the story is you must learn to negotiate. Humans are very interesting creatures and you never know when you'll get a yes. My friend surely did not think he was going to walk out of the store with a guitar that day. He ended up walking out of the store with a great deal all because he was willing to negotiate.

By : Darius_Maslow

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