Need more information?

Buyers need information in any business negotiation. The more information a buyer has, the better his or her position. But what happens if the seller is unwilling to give up the information? Can a buyer force a seller to part ways with crucial numbers? The short answer is no, a buyer cannot force a seller to give up information.

Here is the conundrum, as set forth by Dr. Chester L. Karrass in his book Give and Take:

“Sellers should start on the basis that cost and pricing methods are nobody’s business but their own. A buyer is well advised to insist that part of the price paid is access to full cost and production visibility. He or she has the right to know what he or she is buying and why the price is right.”

Of course, how much information is exchanged depends on the parties involved. Some sellers will be more than willing to give information, especially if it puts them in a better light than their rivals. However, some sellers deal with confidential processes. The formula for Coca Cola comes to mind. Everyone knows that Coke is made from a secret formula that is considered a trade secret. Perhaps one of the ingredients is what affects the price of Coke, but in no way would negotiators for Coke ever reveal their formula. They are entitled to privacy because this information gives them an edge in the market.

In the end, no entity can force a seller to give up private information. A buyer will have to use other means to figure out whether he or she has a good deal. In fact, a buyer should probably engage in a fair amount of fact-finding before the negotiation. Buyers can study the seller’s business history, previous negotiations, financial data and other publicly accessible information.


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