“Negotiation is the resolution of a conflict by mutual commitment.“

Negotiation is cooperation, not competition!

It is not selling and it is not buying, because buying and selling are highly competitive and negotiation is not.

If you find yourself using the techniques in this course competitively, you’re not negotiating; it may feel like it’s doing it, but it’s really not.

We are now going to give an overview of the ’10 Rules’ of Trading. These are the 10 golden rules that will help you become an expert negotiator.

Like all things, these rules can be used defensively or aggressively, however, if you find yourself using them defensively or aggressively, you probably aren’t trading.

If you can stick to all of these 10 rules, you’ll be unstoppable as a negotiator. You will win every time, but not only will you win every time, but also the other party: it will be a real win-win.

This is how we build relationships and maintain the integrity of the deal.

The 10 Trading Rules are:

1. No (unless necessary)
2. never negotiate with yourself
3. Never accept their first offer.
4. Never make the first offer (if you can avoid it)
5. Listen more and talk less
6. never give free gifts
7. Always be careful with the salami
8. Don’t fall for novice regret
9. Always avoid quick deal
10. Never reveal what your end result is (or was)

Rule 1 – No (unless necessary)

This is our definition of negotiations: “Negotiation is the resolution of a conflict by mutual commitment.“

Of the nine words in our definition, there are really only four that are important:

1. conflict – If there is no conflict, do not negotiate. If you are a seller, sell high. If you are a buyer then buy by price. If you don’t need an ongoing relationship with the other party, buy hard or sell hard.

2. Resolution – If you do not need a resolution or an immediate resolution of the conflict, do not negotiate. When looking for a resolution, most people will think about price. Good traders will think about value, and value will give you a broader spectrum of activity than the narrow one of price. If you only stick to the price, then you will only enter into a bargain.

3. engaged – The important point for compromise is that it doesn’t have to be the price. In a good planned negotiation, you can get the price you want and commit to the things you can give away while keeping the price right.

4. Mutual – The only caveat to the above is that the other party has to mutually compromise on their own need to resolve the conflict today.

Rule 2 – Never trade with yourself

If you decide you are going to break Rule 1 and enter into a negotiation, then Rule 2 is never negotiating with yourself.

Always have the other party do it first. Trading with yourself means that you will never get what you are trying to achieve.

Rule 3 – Never accept their first offer

This one is short and simple: never, never, never, never, never accept the first offer.

Because? Because there is always a better offer behind!

Not necessarily a lower price but a better offer.

Rule 4 – Never make the first offer (if you can avoid it)

Sellers often think that making the first offer is inevitable (sometimes it is!). However, there may be a time when you can gain an advantage in a win-win negotiation without making the first offer.

Rule number four might seem counter-intuitive and deadlocked, like you’re not making the first offer or accepting the first offer, so how do you move forward?

If you’re selling, always ask the important questions early and quickly, and you’ll be able to find out what the potential deal is without making an offer.

If you understand the customer’s position, the budget, where they are in pain, and why they want to buy your product or service, then they are effectively making the offer to you without knowing it. You will know what they want to buy and how much they are willing to pay for it. So always ask the important questions like:

• What is the budget
• what have they removed?
• what are you currently paying?
• What is the position of the competitors?

Remember who, what, where, when, and most importantly, why.

Rule 5 – Listen more and talk less

You have two ears, two eyes, and one mouth: use them in that ratio in negotiation.

This is what we refer to as the 80/20 rule: 80% listening, 20% talking.

While your client is speaking, you will reveal your bottom line, give you cues and information you can use.

As you speak, all you can do is reaffirm what they already knew or filter out new information that you don’t want them to have that could be harmful to you.

Rule 6- Never give free gifts

Gifts can seriously weaken your bargaining position, as a gift today becomes tomorrow’s starting point. It will always start further back after giving a free gift.

If you give something for free, you get nothing in return, so not only have you established your starting point for the next negotiation, but you have also missed the opportunity to strengthen your position and ask for something in return.

If you give in easily and the client knows that you will give them a gift just by being asked for it, not only is there now a drop in price because part of the deal is free, but then you establish a prior that They ask and You give, which makes it very difficult to negotiate effectively.

Rule 7 – Always be careful with salami

This rule relates to the ‘sorry newbie’ – we’ve all felt this way no matter how long we’ve been buying or selling. What happens is that we leave after closing a deal thinking about two things:

1. Did I really get a good deal?
2. What could have been done better/is there a better offer?

This is where the 3TQs, the Three Business Questions, come in, and they are:

• Cost – How much will this exchange cost me?
• Price – What price do I want for it?
• Value – How much is it worth to them?

These questions help us see the value of something to the other party and the cost of the item to us.

This is essential information in negotiation as it helps us determine if we have a good deal and if there is a trade then there should be something of equal value to us as the concession we have given. This does not mean equal cost to us but equal value to the other party.

Rule 8 – Don’t fall for novice regret

The ‘Salami’ is almost like Rule 2 (Don’t trade with yourself) but is a bit more detailed. The client will look at your proposal and if you have ‘salamiado’ they will be able to see how it breaks down (or slices) from there comes our analogy since it is like slicing a salami.

They are then free to choose the portions of their proposal that they like, they can choose the portions they like but want a better price, and they can discard some portions together. This can greatly reduce your deal and make the process much longer.

When observing Salami, it is important to try not to salami the other party, as “behavior begets behaviour”. If they salami, then this makes the behavior correct and they are then free to return this behavior.

Rule 9: Always avoid the quick deal

Experience has taught us that any time you make a quick deal by allowing the other party to control the speed of the deal, you end up regretting it.

The reason the other negotiator will speed things up and go for a quick deal is usually because he has seen a mistake you made and wants you to make sure you sign your name to this mistake. This could give them an advantage in many ways, such as a better price, delivery times, etc.

They may not even want you to abide by the terms you agreed to because they understand it’s a mistake, however in this case they may use your agreement to push for more concessions and you may have to give up something to go back. this mistake.

There is rarely a time in a negotiation when you can’t take some time to think things through further and look for your mistakes without blowing the deal, so never go for a quick deal.

Rule 10: Never reveal your bottom line

This rule may sound obvious and even a bit like a rookie mistake, but at some point you might get caught doing it. So when you are negotiating, remember:

• Don’t tell anyone what your bottom line is before you start.
• Do not tell anyone what your bottom line is during the discussion. (Unless you are at the end of your concession, then it will change from a negotiation to an ultimatum.)
• Finally, never tell someone after the denial is over, even if it’s a close friend or relative.

If you reveal your bottom line after the negotiation is over, you will cause one of two things to happen:

1. If you tell them, they may open the negotiation again or they may think that you have deliberately done something to hurt them and they will remember that in the next negotiation.
2. This goes from win-win to win-lose and could destroy your relationship in the future, which means that all future negotiations could result in a lose-lose.