Negotiating in Life, Negotiating Tips, Business Negotiation June 17, 2025
What Is Bargaining Power in Negotiations?Bargaining power is one of the most fundamental forces in negotiation. It determines who influences outcomes, who concedes, and who captures the most value. As Dr. Chester L. Karrass taught, “You have more power than you think.” This article explores what bargaining power means, how buyers and suppliers use it, and the strategies professionals can apply to strengthen their leverage. From preparation and silence to the ultimate ability to walk away, bargaining power is not fixed—it can be built, shaped, and used strategically.
Bargaining power in negotiations refers to the ability of one party to influence or control the terms and outcomes of a negotiation. It stems from having resources, information, or alternatives that the other party values. In business, as in life, power is not fixed—it’s fluid. As Dr. Chester L. Karrass often emphasized, “You have more power than you think.” The key is to recognize and use it effectively.
At its core, bargaining power is about perception and preparation. When a negotiator is well-prepared, has supporting data, and shows confidence, they automatically increase their bargaining position. Power is not just about dominance—it’s about credibility, legitimacy, and strategic advantage. Whether you're negotiating with suppliers, customers, or partners, the following strategies can help tip the power balance in your favor.
Here are our top seven bargaining tips that you can use to build your bargaining power:
Creating a positive atmosphere can influence the direction of the negotiation before any real discussion begins. Small but thoughtful actions—offering refreshments, choosing a neutral and comfortable environment, or opening with light conversation about mutual interests—can disarm tension and lay the groundwork for collaboration. Dr. Karrass believed negotiation is not a battle, but a process. Building rapport early signals a cooperative rather than adversarial tone.
One of the simplest yet most effective ways to strengthen your bargaining power is to take notes—meticulously. Keeping a written record of what’s discussed and agreed upon provides legitimacy to your position. Notes help clarify misunderstandings later, and also signal to the other party that you are serious and prepared. This level of attentiveness reinforces your credibility.
Appearance communicates intent. Dressing appropriately helps reinforce the message you want to convey—professionalism, humility, or authority. In some negotiations, it may be advantageous to project success; in others, it may be wiser to appear modest. Power often resides in perception. Make deliberate choices based on how you want your position to be received.
Support brings power. Having a colleague present, even in a silent observational role, adds weight to your presence. This person can catch things you miss, provide reinforcement for your points, and help manage complex negotiations. According to Dr. Karrass, a team approach not only enhances your ability to respond but also makes the opposing side more cautious in making aggressive moves.
Facts are power. If you come armed with regulations, contracts, case studies, or market data, your proposals appear more objective and less emotional. This transforms your position into one grounded in legitimacy—a key source of bargaining power. When you can back your claims with evidence, it’s harder for the other party to refute them.
Sometimes the strongest move is no move at all. Talking too much can reveal your hand or raise expectations you didn’t intend. By staying silent, you give yourself time to process and observe, while prompting the other party to fill the gap—often revealing valuable information. This echoes Dr. Karrass’s teaching that the best negotiators are the best listeners.
The ultimate bargaining power lies in the ability to say no. If you genuinely have alternatives, and are ready to walk, you force the other side to consider concessions. Many deals improve only after one party shows they’re prepared to exit. KARRASS emphasized that power comes not from pushing harder, but from knowing your limits—and making them known.
The bargaining power of buyers refers to the influence customers have over a business when negotiating the terms of a purchase. Buyers gain bargaining strength when they have many alternatives, are well-informed, or can influence other buyers. High buyer bargaining power often forces businesses to compete on price, improve product quality, or enhance customer service.
Factors increasing buyer bargaining power include low switching costs, product standardization, and buyer volume. When a single buyer makes up a large portion of a seller’s revenue, the buyer holds more leverage. Businesses can reduce buyer power by differentiating their offerings, building customer loyalty, and creating more value than competitors.
Understanding the bargaining power of suppliers and the bargaining power of buyers is crucial in business strategy. For example, when only a few suppliers exist for a critical input, the supplier has strong leverage. This is one of the key factors increasing supplier bargaining power. Similarly, customers who can easily switch to competitors have greater bargaining power. These dynamics shape pricing, delivery terms, and contract length.
Buyer bargaining power factors often include the number of options available, price sensitivity, and access to information. When customers know what competitors are offering and are willing to switch, they gain leverage. In contrast, a business can regain power by offering differentiated value, building brand loyalty, or locking in long-term agreements.
Collective bargaining is a formal negotiation process between employers and a group of employees, often represented by a union. It’s a prime example of how individual bargaining power can be amplified through organization. When workers act collectively, they can gain negotiating leverage they wouldn’t possess individually. This principle illustrates Dr. Karrass’s insight that preparation, support, and legitimacy are the building blocks of negotiating power.
In every negotiation, you have more power than you think. The key is to understand where your leverage lies and to strengthen it through strategic preparation, communication, and timing. Whether you’re negotiating as a buyer, supplier, individual, or collective, applying these principles can shift the outcome in your favor.
Bargaining power in negotiations refers to the leverage one party has to influence the outcome. It is shaped by factors such as alternatives, preparation, information, and perceived legitimacy. Stronger bargaining power allows negotiators to secure more favorable terms.
Supplier bargaining power increases when there are few alternatives, switching costs are high, or the supplier controls a unique or scarce resource. In these cases, suppliers can demand higher prices or better terms.
Customers gain bargaining power when they have many alternatives, low switching costs, and access to detailed market information. High-volume buyers also hold more leverage.
Buyer bargaining power stems from competition among suppliers and the ability to switch easily. Supplier bargaining power comes from scarcity, concentration, or the critical importance of what they provide.
Collective bargaining is when employees negotiate as a group—often through a union—rather than individually. By acting collectively, workers increase their bargaining power and influence over wages, benefits, and working conditions.
More than 1.5 million people have trained with KARRASS over the last 55 years. Effective Negotiating® is designed to work for all job titles and job descriptions, for the world's largest companies and individual businesspeople.
Effective Negotiating® is offered In-Person in a city near you, or Live-Online from our Virtual Studios to your computer. See the complete schedule here.
EFFECTIVE NEGOTIATING® LIVE ONLINE
EFFECTIVE NEGOTIATING II® LIVE ONLINE
RELATED ARTICLES
Have questions or need assistance? Reach out to our team