Mastering the Art of Negotiation: Insights for Success

I’ve been reflecting on recent negotiations and the frequent unrealistic offers we encounter that often don’t result in sales. This has prompted me to share insights on how the negotiation process truly unfolds, aiming to clarify and optimize our mutual business dealings.

In the business world, the typical negotiation margin spans from 1% to 10%, varying by product quality and category. It’s crucial to understand that price setting isn’t arbitrary. Businesses aim to sustain operations through continuous, reasonably priced orders that cover production costs while yielding a modest profit. This approach ensures long-term viability and market growth, contrasting sharply with the unsustainable practice of seeking large profits from minimal, overpriced sales.

Consider the perspective of the seller: if producing an item costs 10 euros, selling it for 7 euros would be economically impractical and a quick path to business failure. A lowball offer not only risks insulting the manufacturer but might also jeopardize future transactions.

It’s a common misconception that sellers are withholding lower prices to maximize profits. Realistically, prices are calculated to cover all costs while allowing a reasonable profit margin for both manufacturer and buyer. Success in business isn’t about making a large profit per unit but about selling high volumes at sustainable margins. For example, earning 0.5 euros on 100,000 units is far more profitable in the long run than earning 10 euros on only 100 units.

Moreover, when considering an offer, remember that unrealistic bids—like offering 50,000 euros for a product priced at 600,000 euros—will not only be rejected but could also end potential future deals.

Always ensure that your offers reflect a thorough understanding of all business aspects before proceeding. This practice will maintain valuable sourcing relationships and support long-term profitability. Let’s strive for trust and mutual benefit in all our dealings to ensure continued success and growth.

Oana Ghidarcea

International Sales Manager

Drawing on extensive experience and insights gained from years of successful international sales.