The Story Of A Firm, Fixed Price (A Fairy Tale)

by drjim on April 2, 2010

Fixed Prices, As With Other Things, Are Not Always What They Appear To Be

Fixed Prices, As With Other Things, Are Not Always What They Appear To Be

How many times have you really wanted something only to discover that its price was too high? What did you do then – give up and go away? As sales negotiators we are taught that everything can be negotiated; however, in our personal lives (as well as our professional lives), if we see a price written down, we shrug our shoulders and say “well, that’s that” . Turns out that we’ve been getting it wrong all this time…

Americans And The Myth Of A Fixed Price

What makes the issue of how best to deal with fixed prices all the more interesting is that there is clearly a cultural issue here. Americans (that’s me!) truly view fixed prices as being “set in stone”.

This differs from many other parts of the world where a fixed price is simply seen as a starting point for further discussions. All of us need to adopt this mindset if we want to be able to overcome the power of a fixed price.

The negotiating legend Chester Karrass probably said it best when he said that the best way to look at a fixed price is to think to yourself “That’s the most that the seller or merchant wants. I wonder what the least they will take is?”

I’m not sure what makes so many of us assume that just because we see a price written down or printed in a catalog that there is no way that it can be changed. What we need to do is to take a step back and realize two important things. First, we won’t be the first person who ever asked the seller for a better price. Secondly, we need to realize that somebody at some point in time has gotten the seller to give them a better price – once again, we won’t be the first.

With this kind of thinking, you can shift from wondering if it’s possible to negotiate a better price to wondering how much of a better price you can negotiate. How’s that for progress?

Ways To Test A Fixed Price

Although a fixed price might initially appear to you like a brick wall that there is no way to get around, I’ve got some good news for you. You have a lot of ladders and shovels available to you and so there’s always a way to explore how you might get a fixed price to not be so fixed after all. Here are some suggestions:

  • Change the quantity: what would happen to the price if you bought more? When the seller sees an opportunity to make more money overall, he’ll get more flexible on the price of just one item.
  • Change the payment: the seller wants to get their hands on your money as quickly as possible. If you pay with a credit card, they’ll be out 1-2% in credit card fees and they’ll have to wait for their money. Sometimes paying cash can get you a better price. Alternatively, lots of sellers want you to open an account with them and they’ll give you a discount if you do. This is the same as getting a discount on the deal that you are working out with them.
  • Change time: just about all items go on sale at some point in time. Maybe it was on sale last week, or perhaps it will be on sale next week. No matter, you are standing there right now and you are willing to buy. Talk about sale prices and see if you can get them to put it on sale for you right now.

What All Of This Means For You

Repeat after me: there is no such thing as a firm fixed price. Every price is negotiable and just because you see something written down or see a price in a printed catalog, don’t get fooled into thinking that it can’t be changed.

You may have to get creative in order to negotiate a new price – the burden of coming up with ways to make a deal happen lies on your shoulders. Changing quantity, payment, or time can turn no deal into a real deal.

Once you have trained yourself to view a fixed price as simply being a starting point for future negotiations, you will have positioned yourself to get a better deal. Now you just have to take the time to find out how best to test the fixed price and you’ll be on your way to negotiating success.

Question For You: do you think that there is ever a situation where a fixed price can’t be re-negotiated?

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What We’ll Be Talking About Next Time

When I was younger, I always liked to read those stories that had a knight in shining armor showing up at just the right time, dueling with the fire-breathing dragon, winning, and then riding off into the sunset with the princess. Today’s dragons go by a different name: fixed prices. It turns out that with a little guidance from knights of yore, we can still find ways to defeat them…

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