one page

2 Buyer: Abdullah Alsobhi, Rick Noren, Abdulrazak Alshammri

Scenario

• Wants to buy 7 new washing machines for Self-Laundry shop

• Visit electrical appliance shop to see if sales assistant will offer a discount

• Can afford up to $175 per month on credit payments

  • BUT respond positively to interest free credit terms if offered

Negotiation Steps

1. Preparation and planning: identifying the need that will be addressed through the negotiation.

We need to purchase seven new washing machines for our business. To obtain them, we will purchase them on credit from an electrical appliance shop. We are not able to pay for them up front, and must negotiate a monthly credit payment. As we are providing them with a fairly large sale, we will ask the sales associate for a discount and the possibility of interest free credit terms.

Our leverage in the negotiation of the payment terms is the fact that we are bringing a large purchase to their business, and we have other sellers that we can go to if we cannot reach an agreement.

2. Definition of ground rules: establishing the basis of the negotiation.

Our purpose of negotiation is to purchase seven washing machines, paid for on a monthly payment. We expect that since we are providing the appliance shop with a large order that they will be willing to respond with a discounted offer. The price upon which we will be paying is the basis of the negotiation, assuming the shop has the ability to sell us the seven washing machines.

3. Clarification and justification: being provided with reasoning and information.

We would like to be assured that the washing machines are reliable and will be able to function fully for the needs of our business. Also, will delivery be included or are we responsible for it ourselves? To assure the quality of the purchase will hold, we will ask their policy on warranties and the possibility of fixing or replacing broken machines.

We would also like to ask the other party of their ability to give us interest free credit terms for the purchase.In turn, we will explain to them that we have a tight budget and are only able to afford the purchase on monthly credit payments. Since the purchase is so large we expect them to be flexible in the pricing.

4. Bargaining and problem solving: finding an agreement upon which the two sides have their needs met.

To begin the bargaining part, after we have explained the nature of our budget, we will ask what they can offer us before we give them an offer. The reason for this is we want to give them an opportunity to be kind to us and give us a good deal, and attempt to avoid a heated negotiation. No matter what their offer is, however, we will ask for a lower price by at least $25 per monthly payment, and also be clear in asking for an interest free payment plan.

If they insist on having us make an offer first, we will offer to pay $125 monthly on interest free terms, until the washing machines have been paid for. If push comes to shove, we will tell them that our maximum budget monthly is $150, hoping that they will take that as their lowest acceptable amount.

Ideally, we will reach an agreement that satisfies our $175 per month budget, including interest if need be. A function of the $150 maximum strategy is that if they do not give us interest free payments, we will be able to afford the interest with the leftover budget of $25.

To aid our bargaining power, we will assure them that we will come back to them for future business and that a favorable offer will not be unappreciated. We will also offer to promote their business via social media post on facebook, thanking them for providing us with high quality washing machines. However, if they are not cooperative, we will remind them that we have other options if we cannot come to a good price.

5. Closure and implementation. Final step in which the parties have found a point of agreement or have been unable to come to an agreement.

Once we have successfully found a price that works for both our business and the electrical shop, we will finish up by shaking hands and/ or signing documentation. It is at this point that we will make the first payment and plan for a delivery of the washing machines. We will thank the other party for their cooperation and willingness to work with us, and trade contact information for future business.

Works Cited

White, Martha C. "10 Tricks for Haggling Over Price-At Any Store." Time. Time, 18 Dec.

2013. Web. 25 Apr. 2017.

White, Martha C. "12 Things You Should Always Haggle Over." Time. Time, 12 Aug.

2012. Web. 25 Apr. 2017.