How To Negotiate Anything ...

Negotiation is easy providing three conditions are met:

  1. The person you're negotiating with is reasonable and is open to working towards an equitable outcome (though this can be worked around)
  2. You know the rules
  3. You can completely divest yourself emotionally from the negotiation

I'll talk about (1) as I go through this, but suffice to say if people don't want to negotiate - especially on eBay - there's not much you can do about it.

Let's talk about 2 - the rules.


Successful negotiation requires a win-win mentality.

If you or the other party have an attitude of "screw the other person" - you're either both going to miss out, or one of you is going to get screwed.

Of course it's great if you can get an amazing deal, but it's much easier to get to that point if the other party feels like they've been treated with respect.

A win-win attitude means listening to the other party, understanding their concerns and exploring options for a deal that will suit them and you.

Hidden in that last sentence is the key to negotiation mastery - listening.

Analyse the negotiator

There are very few deals that are as simple as they first seem.

Your negotiating partner will have a list of wants, needs, preferences and biases that are your job to uncover.

This is done through asking smart questions, and putting your negotiating partner at ease so they reveal their negotiating variables.

  • Is a quick sale important?
  • Have they got other things that are worthless to them that might sweeten the deal?
  • Is how they pay important?
  • Why are they asking for the price they want? Why are they emotionally attached to it?

The more you ask, and the more they reveal, the more cards you have to play with to do a deal.

Know your negotiable variables

Before you enter a negotiation, you should have a concrete idea of what YOUR negotiating variables are.

  • Will you accept less for cash in hand?
  • Would you pay more if new information is revealed?

The idea with knowing your negotiating variables (and your partners) is being able to play these "cards" when you are gridlocked.

Also, make sure you go into negotiations with an ABSOLUTE MAXMIUM you are prepared to pay for an item, or conversely the ABSOLUTE MINIMUM you will accept on a sale.

This ties in to my third point above - being able to emotionally divest yourself from a negotiation.

That's not always easy to do, but it means taking a step back and being rational about a deal.

Your best negotiations will be the ones you're happy to lose.

If you can enter a negotiation without getting emotionally attached to it (e.g. an item you want) you'll stay cooler, and be able to walk away easier.

Your partner will also sense either your desperation for an item, or that your interest in the negotiation is serious but not "your only option"

An example of a negotiation I was very emotionally invested in was selling my old car.

We'd recently bought a new $43k Mazda and had an old, clapped out Hyundai double parked in our driveway.

I wanted shot of it, and assumed it would get picked up via a car sales website here in Australia.

Thing is - EVERYONE wants rid of old cards, so it's a buyers market.

I initially listed it at about $200 over the average sale price for similar cars, so my first price reduction (to the average) looked like a discount but simply brought it in line with the average price.

However, six weeks later and a further $400 discounted it wasn't shifting. Combine that we me finding out the battery had died ($140 to replace) and the extended time eating into the six months of paid up car registration I'd advertised, and I was starting to get jittery.

When a buyer finally contacted me, after a quick test drive the deal came.

This was a no-nonsense sort of guy.

HIM: "How much was it?"

ME: "$2400"

He looked me straight in the eye, and says "$2000"

I tried a typical negotiating ploy:

ME: "I've already discounted it .. you've got a new battery ... can we meet in the middle at $2200?"

Without flinching, he repeated his offer: "$2000"

There was no reason to negotiate. I would have taken $1700 if he offered it. 

I mumbled a bit and feigned my displeasure and accepted the offer.

This is a negotiation where the buyer got exactly the price he wanted - and I walked away with less.

Your view of failure in negotiation depends on what is important to you.

In my mind, there is no loss in accepting a lower offer for something I would have considered paying to be towed for scrap within a few more weeks.

Buying on eBay

When it comes to buying on eBay - where I can, I avoid auctions (a whole different topic) and look for items with "Make An Offer" on the listing.

This means the seller is open to doing a deal to get rid of what they are selling.

eBay will give you the ability to enter an offer price and a message to the seller, and if they accept you're on the hook for the item exactly as if you had won it at auction.

Making an successful offer in this way is mainly dependant on one thing - knowing the value of the product

To find it's value, you need to search eBay for the item with the option to only view "Sold Listings"

This will give you the market value of what you're interested in, based on what others are paying.

There is no point making an offer that's much less than the median price of what you see in sold listings.

If there are a lot of sales at similar prices - great, you can negotiate without worrying about missing out.

If there are no sales shown, or the item is rare and listed very infrequently - you've got a bigger problem. Usually this will mean the item is at auction, as the seller will want to capitilise on a rare item.

Long story short, patience is your best friend as a bidder. If you can walk away from an offer knowing another one is available or likely to come up within a short time period, you're good.

"Make an offer" is a tell - the seller is giving away the fact that they want rid of the item - but don't equate this with the seller accepting a fair price.

Apart from the ridiculously overpriced items you'll find on eBay, the prices people do put on their items are emotionally important to them - it's what THEY think their stuff is worth. 

When you come in with a lower offer, you're effectively saying "Your stuff is worth less to me than it is to you," so remember the seller's state of mind. 

No one wants to pay more than they think something is worth, and no one wants to accept less than what they think their stuff is worth.

The offer message

Armed with the knowledge of sold listings, I'll typically send a message like this with the offer price:

Hi, interested in your XYS item, I've checked sold listings on eBay and can see these are typically selling at $price, so I hope you consider this a fair offer. 

If not no worries, I'll wait for another listing.

Thank you

If the price the seller wants is several orders of magnitude greater than the typical sale price, this won't work.

If you are coming in around the median sale price, this will work most of the time. 

If folks reject your offer, consider offering 5% more, otherwise wait for another one to come along.

If the item is rare, just get in your head the MAXIMUM you are prepared to pay, first offer what you THINK is a reasonable starting price, and see what the response is.

If the offer is rejected, try halfway between your initial offer and you maximum, and then finally your maximum (with "final offer"). In each case you'll get responses from the seller ranging from irritation at your offer to some willingness to accept a higher offer. If you can ask questions about the state of the item, shipping details or other factors do so if you think it will help.

Most importantly - appear human. Drop anecdotes and personal information without giving away and emotional desperation on your part. 

Sound bites like "My kid really likes these things" will make you appear less like someone trying to screw someone around and easier to deal with. I'd only use language like that if it were obvious there were "other options" I could purchase for the kid in question.

Negotiating with Buyers - Real World Example

Below is an example of a negotiation I did with a buyer on eBay.

It's a great example because there were a lot of factors at play that affected the "cards I played," and also because both then buyer and I were happy with the outcome.

I've removed some personal information to anonymise the buyer and the items, you'll get the idea.

This begin based on a set of 16 similar items I had on auction at the same time, each ending 15 minutes apart.

I use this strategy to increase bidder traffic (and thus bidders) across multiple items, inter-linking the 16 items to generate more interest. It usually results in bidders that buy multiple items.

On the auction day, about 9 items went unsold so I had them automatically relist for the following week.

So the following week, 5 had sold and I received this message from a buyer who had bid and won on just one of the items:

Hi, am interested in the 4 other (REMOVED) items you have for auction ... was wondering if you'd consider doing the lot (including this one) for $160 including postage to (LOCATION REMOVED). If so, just adjust the postage after the the hours up.

So let's look at the negotiation from this starting point. 

At the outset, the buyer has made two mistakes.

Firstly, he's already bid and won on one item - this means he's on the hook for that at a minimum, with the postage costs on top should this negotiation fall through. This weakens his position in offering a price on all five items including postage costs.

Secondly, he's made the first move with a price, where he could have asked me "how low I would go." 

For all he knew I may have offered LESS, or given him a price he could work down from.

In any case his offer was very low, so no matter.

On my side, he knows I'm looking at four items that have gone unsold. 

I obviously want rid of them. 

If he's been following along, he may well have been looking at these the week before and know they've now gone unsold twice.

Here's my response:

ok so I'm assuming you're interested in these ones which are relisted

Item 1 - $100
Item 2 - $30
Item 3 - $40
Item 4 - $20

You've won the (Item 5) at $15 & postage.

I'd certainly be interested in selling them all but that's a very low offer from my perspective.

Appreciate these didn't sell, however I'm in no rush to sell them so figured I'd just shelve them for a few months after today.

To give you an idea on bidding prices, I searched sold listings for each of these and the prices are a little lower than what previous auctions had sold for in each case.

If you're still interested and want to make another offer I'd be glad to hear from you.


Let's pick apart my thinking:

First, I clarify what items he wants because it wasn't clear, and in doing so list the auction prices each item had. This helps re-inforce their individual value from my perspective.

I point out he's already won one item, and is on the hook for postage. 

Because he had won that item, I already had his address and was able to calculate postage costs for all five items.

So, if he had paid asking price plus postage for all five items he would have paid $230. Of course, they didn't sell so that's only what I wanted for them, but where I'd hope to move him closer towards.

I am of course, happy to be rid of all five items at a lower price so I'm open to negotiate - not that I need to reveal all of this.

Continuing my message, I dangle the hook of being open to a deal, but politely reject his offer, without giving a counter offer.

This is powerful, but risks ending the negotiation. By saying the offer is "very low" he has no idea what I'll accept, so may get scared off and walk away. These are dice you have to decide how to roll for yourself carefully.

I then state I'm in no rush to sell, in the same way I explained earlier about how you should be in no desperation to buy - happy to do a deal, but if it's not right - happy to walk away. 

All this just lets the buyer know my state of mind.

Next I throw in the same "sold listings" logic I apply to buying - using this argument helps me justify why these items are worth more than he's offering.

In the end - it's irrelevant - they're only worth what he's willing to pay, and I'm willing to sell at; but these kinds of arguments can help the other party reconsider their position.

He may have done his own research based off that comment, or he may have ignored it completely, but there's no harm in letting the other side know where you're coming from. 

If your price starts to sound more reasonably thought out, it's harder to mount a counter-offer without looking stupid or insulting.

Lastly, I leave the option open for him to re-offer.


A terse response to my wordy reply - this tells me he's not desperate for this deal either and/or , and is probably close to how much he's willing to pay. 

Nevertheless, he's moved from $70 short of my asking price to $50 short at the $230 total.

My response:

So with Postage to you this totals $230. If you're happy to split the difference I can offer $205. If you can pay the balance via PP I'll accept $195

I re-frame the transaction to the total of my items, which I had purposefully avoided before. 

This also lets me deploy the "split the difference" argument - meeting half way between his offer and mine. This is a great strategy because of it's inherent fairness - it's hard to disagree with an offer that both sides equitably pay for.

Remember I'm doing this on his COUNTER offer, not his original offer which is another little sleight of hand.

I'm saying split the difference and I'll accept $205, $45 over his initial offer.

He won't want to pay this.

Because of this risky maneouvre, I tie in the final condition - offering a further $10 off if he pays via PayPal - the "PP" is a shorthand for this so eBay don't pick it up and intercept my attempt to move the transaction OFF eBay.

Why is this important?

Two words - Seller fees.

In Australia, eBay whack sellers with a whopping 9% final listing fee which means if he pays me $200, I see $182 in the bank.

By moving the transaction out of eBay, I can save this fee and come out better, so I use this as an offer for a cheaper price. $195 splits my savings on the seller fees approximately 50-50 with him, and gives a final price closer to his last offer.

His response:

ok, 195 (I'm assuming you mean paypal)... that's a fair deal in the end!

The key words here are all in his response - a fair deal.

He's happy, I'm happy.

It's important to have a bit of to-and-fro in negotiations - EVEN IF YOU"RE HAPPY WITH THE FIRST OFFER.

If you make an offer to buy something and the seller quickly say "YES!" - you'll often walk away wondering if you paid too much. 

Conversely, whether your offer was good or not, the seller will walk away kicking themselves for not negotiating a better offer with you - whether you had more to pay or not.

By entering into the spirit of a negotiation, finding out where the best price for a deal really lies, you can often walk away with a better deal that the other party feels good about - even if they've actually "lost."

In the end, I entered a negotiation from a position that best case would have netted me $209 (minus fees) if the items had sold at auction.

Through that quick back and forth, I ended up with $195 (7% less) from a starting offer of $160 (24% less).

Where to find out more

Pretty much everything I know about negotiation I learnt from one book - "How To Negotiate Anything," by the great Herb Cohen. He wrote a good follow up as well (Negotiate This), and every other book I've read on the subject didn't add much to Herb's excellent work.

Cohen negotiated the release of 52 hostages from Iran during the Carter administration, and continued to negotiate for many companies before working as a keynote speaker and with the FBI.

I'll leave you with a quote from me:

"Patience is a negotiator's greatest asset"

And a far better one from Herb:

"People work for what they want but invariably want what they've worked for".

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