Level 9 · Part 1
Prepare before you talk
Most of a negotiation is won or lost before the meeting, by knowing your costs and your options.
Do not walk into a negotiation hoping for the best. Preparation gives you calm, confidence and a clear idea of what is acceptable.
- Know your costs. Use Level 1 to find the lowest price at which you still earn something. Include transport, packing and losses.
- Know your options. Who else could buy? What else could you do with the product? A good alternative gives you the freedom to say no.
- Know the buyer. What do they need, when, and how often? What worries them about suppliers?
- Know the market. What are similar products being sold for now, and what do they offer in return?
- Decide in advance your best case, your fair case and the point below which you will not go.
Ask, listen and take notes
Questions often earn more than arguments. Ask what the buyer needs and why. Listen, then repeat back what you understood. This avoids misunderstanding and shows respect.
Exercise 9.1 · My negotiation preparation sheet
- Choose one real or likely deal with a buyer.
- Write your cost per unit and the lowest price you would accept.
- Write your best alternative if this buyer says no.
- Write three things the buyer needs besides price.
- Write your best case, fair case and walk-away point.
Background reading for this part:
- Market Research for Agroprocessors (Marketing Extension Guide 3) — Food and Agriculture Organization of the United Nations (FAO), Andrew W. Shepherd, 2003
- Agricultural and Food Marketing Management — Food and Agriculture Organization of the United Nations (FAO), I. M. Crawford, 1997