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Tactic #22 - The Safeguard
Summary: Putting conditions on an agreement
in order to protect oneself.
The Safeguard is employed when a
relationship is new or you have little or no trust in it. The tactic is
designed to protect you in the event that your counterpart does not live
up to his negotiated deal point.
Example
A retailer or distributor offers to buy 50,000
units from a manufacturer for $1 per unit. The normal price for anything
less than 50,000 units is $1.25 per unit. The manufacturer agrees to the
$1 price but places a Safeguard into the contract that reads, “In
the event that the distributor does not purchase 50,000 units by the end
of the year, she will be back-billed 25 cents per unit.” Or the
manufacturer stipulates that if the distributor has not ordered 50,000
units by the end of the year, the price effective in the new year will
be $1.25 per unit. Both of these examples provide Safeguards to
the manufacturer.
Counter
There are three effective counters the distributor
could employ: (1) She could just Say “No” and Stick to Her Guns;
(2) she could argue that her corporation has a policy that does not
allow any type of back-billing; or (3) if she is interested in building
a long-term relationship, she could negotiate a “tiered” price, agreeing
to pay, for example, $1.35 per unit for orders up to 20,000, $1.15 per
unit for additional units up to 40,000, and $1 per unit on any purchase
over 40,000. Although sharklike negotiators might debate the wisdom of
this last counter, being friendly and flexible helps build
relationships. People are much more willing to help create a win-win
outcome with a counterpart they like and trust.
This tactic is one of 101 strategies and tactics
featured in The Only Negotiating Guide You'll Ever Need, by Peter
Stark and Jane Flaherty.
To view this month's issue of The Master
Negotiator, the premiere on-line newsletter for negotiators,
follow this link:
The
Master Negotiator, Volume 2, Number 3 - Questioning Skills
To view previous Negotiating Tactics of the Week,
follow this link:
Negotiating
Tactics of the Week
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