It’s no secret the Chinese are amazing at negotiation. Perhaps it’s their long history of trading along the Silk Road or doing business in their many port towns. Where ever the talent comes from, it’s something we can all learn from.
During my eight years living in China, I negotiated for just about everything. It’s a habit and skill I’ve brought back with me to the US, asking for discounts or deals in any number of situations. You’d be amazed how many businesses will give you 10% – 15% off after a chummy conversation and a friendly ask.
As a Frugalpreneur, developing your negotiation skills should be at the top of your personal development list. When you learn to negotiate, a whole new world of business possibilities open to you. For example, you can eliminate upfront costs, barter your services or even get people to work with you for a share of profits instead of a salary.
So what are the top three negotiation tips I learned from the Chinese?
In junior high, all Chinese students read Sun Tzu’s The Art Of War. This ancient text runs deep in the Chinese psyche and you can bet that it shapes the Chinese approach to negotiations. One popular idea is deceiving the enemy.
Like most all negotiators, the Chinese also set a high bar and ask for a number of points on the outset. However, mixed in are a number of points they don’t really care about, but it’s difficult to tell which these are.
As a negotiation begins, the Chinese passionately argue for everything. As the negotiation wears on, the points they don’t care about are reluctantly conceded one by one. Of course, they never budge on what is really important to them.
By the end of the negotiation, you might feel like you’ve worn them down a bit, but have you?
The Breaking Point
During negotiations in Western countries, pushing the other party to walk away is not the nicest thing to do. But if you’ve ever negotiated with the Chinese, this is one of their most common and effective strategies. It’s also the only way to know you’ve got the best deal.
Here’s how it works.
The negotiator pushes you as low as you can go, then he pushes you a little further—past your breaking point. Once you refuse and get up to walk away, the negotiator eases up and accepts the second to last offer.
I remember talking to a lawyer out in California who was negotiating the sale of a vineyard to a Chinese family. He bitterly complained at how tough the Chinese negotiated. He had to concede, concede, concede until his client couldn’t take it any more. After they cut off the negotiations, the Chinese family got back in touch and bought it at the price agreed upon just before the breaking point.
The Early Walk Away
Since we now know the negotiator will push us to the breaking point, you’ll need to master the early walk away.
As you might guess, this is pretty simple. Before you get near your breaking point, walk away early. Of course, this is easier said than done. If you are negotiating for something really important to you, it’s very difficult to walk away in a believable way.
I often practiced this technique at Chinese markets. After some light negotiation I would say the item was too expensive and I could buy it elsewhere. After taking my first few steps away from their stall, store owners would grab my arm, yell at me to come back or chase me across the market.
When I returned, I bought the item for the price just before my artificial breaking point.
These three techniques only scratch the surface of negotiation. Before we get into the finer points, it’s time for you to start small. You need to start getting comfortable being uncomfortable
Practice negotiating in safe places like flea markets and farmers markets. Once you get more comfortable negotiating, bring it into your business negotiations and watch a whole new world of possibility open to you.
Have you tried some of these negotiation techniques? What is your favorite?
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