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1. Making the offer.
2. Explaining----Explain why the offer is fair and why the deal is good for them. Do not be apologetic.
3. Testing the response----Find our what parts of the offer are unacceptable(or acceptable). Ask them to explain how they feel about your offer and probe their response. “Am I right is thinking that you find our proposed payment terms attractive? ” Explain how you got to your offer. Tell them that their asking price close not seem realistic and ask what their objectives really are. If they respond then you are moving again.
4. Following up----The other party genuinely does find your offer ridiculous. Now do you panic? Never panic. The bid was low: you are prepared to offer more; you must get negotiations moving again, but how?
-----Make an instant concession, dressed as an explanation---“if you can move on the very tight delivery requirements and the sixty-day payment terms then we would be able you discuss the price.”
-----Ask for a recess to consult colleagues---If you don’t know how to continue give yourself time you think while keeping in the game.
-----Tough it out and see what happens---You could be wrong. They may be bluffing.
-----Give in---If there is no alternative consider retreat as the very last option.
Bidding first
The first bid sets the running and takes the initiative. The first offer is seldom the final one. If you bid low, bid first. If you offer a shut-out, then bid first. In many cases you will want to have an idea of what the other party wants and will be happy for them to take the initiative. I prefer to get my bid in first to gain and keep the initiative.
The first bid sets the tone for the negotiation. If you are able to establish that the starting point is lower than the likely outcome then you must be dragged uphill towards it and the result should be a lower price than if you started from the other direction.
Bidding last
The risk of bidding last is that other party makes an unacceptable suggestion and then fells unable to move from it. They now have to be dragged towards an acceptable deal. It may be an advantage to bid in complex negotiations to give time to find out more.
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