Negotiating in Life, Negotiating Tips, Business Negotiation December 10, 2010

Negotiating: What to do when the market is against you.

The terms “sellers market” or “buyers market” may mean that one party has a power advantage over the other. Does this mean that if the market is in your favor you have all the negotiating power or vice versa? Not entirely. You can always negotiate because business negotiations involve many factors, including your specific situation.

One issue to consider is the length of the relationship you expect to have with the other party. If this is strictly a one-time deal, perhaps hardening your position makes sense. If, however, you are involved in a long-term relationship with the other party, you will need to be flexible.

In the article “Flexibility key in business negotiations” in the Winona Daily News, a sales manager at a local car dealership says: "The long-term relationships have been critical to doing well in this down environment... It's more important than ever to have a relationship with buyers."

In other words, if you are a seller in a buyers market and want to have long term relationships in a buyers market, you will settle for less money to give the buyer a deal.

Negotiators must consider the big picture. In the Winona Daily News article another factor comes into play: knowledge. Both parties should research specifics.

“Business owners in both real estate and auto sales stressed the importance of knowing the market in negotiations.

"Knowledge is power, so, as a Realtor, you need to have data and research and know your market," said Nancy Gerrard, co-owner of Gerrard-Hoeschler Realtors, based in La Crosse, Wisconsin.

The Coulee Region housing market is not seeing the extreme decrease in home values happening in other parts of the country, she said. It's important for her to know that when buyers come in with a very low purchase offer on a home based on national news headlines.”

Perhaps you are a strong seller in a buyers market—you offer services that other sellers do not, for instance. In this case, you have an advantage that can help you at the negotiating table. It is also good to consider the issues on the table other than price. These could be delivery date, contract length, payment terms, and others, all of which may be negotiable.

How do you deal when the market seems to be against you?