Welcome To The World Of Lowballing | Negotiation

Sometimes prices are not what they seem to be

Sometimes prices are not what they seem to be
Image Credit: Andrew Dallos

When we are negotiating with someone, there has to be a basic level of trust between both sides. If we can't believe what they commit to, then we can't commit to doing a deal with them. Likewise, they have to be able to believe that after all of the styles and negotiating techniques are done, we'll follow through when we make a commitment to them. Where things start to get a little bit cloudy is when it comes down to specific things like price. Just exactly what is the price of what is being negotiated – both today and tomorrow?

Welcome To The World Of Lowballing

When we are in a negotiation, there are often a lot of different issues that are on the table. One of the biggest issues, always, is the price that will be paid. If we are playing the role of the buyer, then we will always be looking for the lowest possible price. That's why we can get very excited if the other side presents us with a very low price. If we see this price, then there is a good chance that we're going to jump on it before the other side can change their minds. We'll want to strike a deal with them as quickly as possible.

However, this is where lowballing comes in. Lowballing happens when the other side offers you a low price, some would say a price that is too good to be true, and then proceeds to offer you add-ons that you didn't know about and other extras that all come with a cost that will end up raising the final price of the good or service that you are negotiating for.

This lowballing stuff is not only a tactic that is used by people who are trying to sell you something, it can also be used by people to whom you are trying sell something, buyers. Buyers can lowball you in a number of different ways. They can promise you that if you do a deal with them today, there will be many big orders to come tomorrow (they never do). They may have specifications for what they are buying that are easy to meet, but once the paperwork has been signed they start to change these specifications and they end up turning them into something that is more complicated and will cost more for you to comply with.

How To Deal With Lowballing

As a person who is buying something, spotting someone who is trying to lowball you is pretty easy. However, when you are trying to sell something to someone it can be a bit more difficult to spot. What you are going to want to do is to make sure that during the principled negotiation, before things wrap up, that you take the time to determine what you think the buyer's real needs and wants are. What you are going to be trying to do is to determine what changes could possibly come up. The goal will be to include language on how to deal with such changes in the terms of the contact that you sign with the other side.

During the negotiations, the other side may make a number of promises to you regarding doing future business with you. What you need to do is to forget that they even mentioned these items. Instead, what you are going to want to do is to perform some homework and find out if they have a reputation for living up to their side of an agreement. This can come across in a number of different ways: do they pay their bills on time and do they live up to the other terms in the deal?

In order to protect yourself from lowballing by the other side, what you are going to want to do is to make the agreement that you enter into be as detailed as you possibly can. Your goal here will be to try to cover as many different situations where the other side could make demands of you or request changes. The more detailed the agreement is, the better protected you will be against lowballing.

What All Of This Means For You

It's only worth our time to negotiate with the other side if we believe that they will do what they agree to do. All too often what can happen is that the other side makes an agreement with us that we are willing to sign and the afterwards they proceed to change it so much that it no longer looks like the original agreement.

If we are buyers and we are dealing with a seller who has offered us a very low price for their product or service, then we need to be careful. What they may be trying to is to lowball us. If they are lowballing us, then they will agree to a low price and then once the contract is signed, they will then request a series of changes that will significantly raise the price of the deal. Likewise, buyers can also lowball sellers. They do this by promising big future orders or changing specifications. You need to be on the lookout for lowballing and you need to create a deal that will protect you from lowballing.

The good news about lowballing is that it can be easy to spot early on. The correct way to deal with it is to take the time up front and work enough detail into your agreement to prevent the other side from being able to lowball you later on. Keep your eyes open and you'll be safe the next time someone tries to offer you a deal that is too good to be true!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real Negotiating Skills™

Question For You: Do you think that you could ever make lowballing work for you in a negotiation?

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What We'll Be Talking About Next Time

I don't know about you, but from my point-of-view it can take a very long time to negotiate certain things. You create your negotiating negotiation styles and negotiating techniques, spend your time talking with the other side for days, weeks or even months and then when all is over and done with, with a little luck, you now have an agreement with the other side. Finally, we can now all go on to work on other things. Or can we?

The post Welcome To The World Of Lowballing appeared first on The Accidental Negotiator.

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