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A Negotiation Tip

Jeanne Farlow was a merchandise buyer for a chain of retail stores that catered to the youth market. Her company was interested in expanding its offering of leather coats. While on a buying trip to New York City, Jeanne met with the representative of an import firm that specialized in goods made in China. Jeanne liked the sampling of leather jackets and coats on display. The initial price offered to Jeanne's company seemed fair. It would probably allow for a 40 percent retail markup. Also, the quality of the samples was quite good.
The head of the import firm politely suggested that Jeanne sign quickly a contract for 500 coats and jackets. At the same time she would be given an option to buy another 500 at the same price should the first shipment sell quickly. Jeanne envisioned the accolades she would receive upon reporting back to headquarters in Cincinnati. But then a sudden insight flashed through Jeanne's mind. She thought she should conduct a little research about the origin of these goods.
Back in her hotel room, Jeanne made a series of phone calls to customs officials, the U.S. Chamber of Commerce, and the National Association of Manufacturers. J eanne' s intuition paid off. The import firm she was dealing with had been accused of trading with Chinese firms who used political prisoners for lab or Jeanne did not know for sure if the merchandise in question was made by prisoners. Yet she did know that an importer tainted with the reputation of trading in prisoner-made goods would be in a poor negotiating position. He would therefore not be able to command top price for his clients.
Having done her homework, Jeanne called the importer and made an appointment at ten thirty the following morning. She told the importer emphatically, "There is some uncertainty in the market place about whether all leather jackets imported from China are made with prison labor. Because of this fact, I can offer you only 75 percent of the price I offered you yesterday." The importer assured Jeanne that he would never intentionally deal in goods made in the Gulag. Because his client was anxious to improve his cash flow, however, he would accept Jeanne's offer. Jeanne thus gained the edge in this negotiation because she allowed herself time to do her homework. The first price she was offered was a good one. But the information she collected that afternoon from her hotel room enabled her to get an even better price. Furthermore, the leather jackets and coats were a success. Jeanne did buy another shipment at the same favorable price she paid for the first lot.
As mentioned in passing earlier, part of being in no hurry during negotiations is making good use of silence. Use the silent stare in this manner: You allow the other side to make his or her best offer or demand. Say nothing, but still maintain eye contact. Most people feel uncomfortable when faced with silence. To fill the void, he or she is likely to start talking more about the offer. Furthermore, the other side may interpret your silence as indicating disapproval. Conse?quently, the other side might lower the demand or increase the offer.
Aside from perhaps getting better terms, the silence offers another advantage. You can use it to assess the worth of the demand or offer up to this point. 6 Using this technique, you get the edge by silence and contemplation.
 

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