In commercial negotiations, the four key elements—price, delivery date, payment method, and guarantee conditions—are central to the discussion, with price being the most critical factor. Quoting is an essential part of the process, but the question remains: who should quote first? Is it better to quote first or wait for the other party to do so? Are there alternative approaches?
Let’s explore these issues in detail.
Traditionally, the party initiating the negotiation usually quotes first. For example, in a bidding scenario, the bidder quotes first, and in a buyer-seller context, the seller often starts with their offer. The advantage of quoting first is that it sets the tone and frames the negotiation within a specific range. By stating a higher initial price, the other party is less likely to expect a significantly lower counteroffer. In some southern regions, clothing vendors commonly use this strategy, quoting prices much higher than what the customer expects. For instance, if a shirt is worth 60 yuan, they might quote 160 yuan. Most customers won’t counteroffer to 60, but one person may negotiate from 160, allowing the vendor to still make a profit.
However, the first quote must be reasonable—not so high that the other party refuses to negotiate. If a hawker asks 300 yuan per kilogram for eggs, you might still try to bargain, even if the price seems unreasonable. The first quote can reveal hidden expectations, giving you the chance to adjust your own stance based on the other side's response. You can also use tactics to increase the final price after listening to their offer.
A famous example is Thomas Edison. When he was an electrical technician, his invention was patented, and the company manager asked how much he wanted for the patent. Edison didn’t immediately state his price. Instead, he let the manager propose a figure. The manager offered 400,000 dollars, and the deal was quickly made. Edison ended up receiving far more than he initially expected, which helped fund future inventions.
Both early and late quoting have their advantages and disadvantages. The decision to quote first or wait depends on the situation. If you are well-prepared and confident, quoting first can give you control. If you’re not familiar with the product and the other party is, it’s better to wait for their offer and adjust accordingly. If the other party is inexperienced, you should always quote first to set the framework and guide the negotiation.
Skilled traders understand this well. When dealing with a shrewd customer, they might use the “first quote†technique to keep prices low. But when facing a less experienced buyer, they may ask the customer to quote first, as the customer might overestimate the price.
Quoting isn’t just about numbers—it’s also about presentation. The way you express a price can greatly influence perception. For example, a provincial insurance company promoted liquefied petroleum gas insurance by saying: "Pay just one yuan per day to get up to 10,000 yuan in compensation." This “division quotation†method breaks down the annual cost into daily payments, making the price seem smaller and more affordable. If they had said 365 yuan per year, people might have thought it was too expensive.
Similarly, the “addition quotation†method involves gradually increasing the price by breaking it into parts. A stationery dealer might first quote a low price for a pen, then later add the price of ink, and finally raise the price of paper. Once the customer has bought the pen and ink, they’re more likely to buy the paper too, even at a higher price.
Another common tactic is setting a price range. Instead of asking directly, a salesperson might say, “I know you’re experienced and wouldn’t pay 20 yuan, but you can’t buy it for 15.†This subtly sets boundaries and gives the impression that bargaining is possible, but within limits.
Sometimes, the best approach is to encourage the other party to quote first. One trick is to deliberately say something wrong to provoke them into revealing their price. For example, saying, “Hey, I know you want to pay 30 yuan!†might cause them to argue, “No, I only want to pay 20!†Now you have a starting point for negotiation.
In conclusion, quoting in commercial negotiations is similar to pricing goods. It requires strategy, timing, and skill. Learning from pricing techniques can help improve negotiation outcomes. Whether you quote first or wait, the key is to stay flexible and adapt to the situation.
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