Follow along with my story to see how I could have ended up with more money if I had steered a negotiation to a higher number than my bottom line.
Posting The Holiday Gift On Craigslist
Every year my employer gives everyone a holiday gift. We’re a technical firm led by geeks, so it’s always some kind of gadget. This year we got a Surface tablet.
I’d thought about getting a table beforet, but hadn’t pulled the trigger yet. I don’t really know what I’d use it for. After much deliberation and research, I decided that even if I wanted a tablet, the Surface wouldn’t be the right one for me, so I decided to sell it.
I put it up on craigslist for it’s retail price. I hadn’t opened it and I figured there might be someone out there that wanted one immediately, while saving themselves the taxes they’d pay in-store.
I was wrong.
I put it up for $499, and received a couple offers for $300, which I didn’t even counter. That’s definitely too far apart for us to come to an agreement. They weren’t even swayed with the tax and immediacy arguments. But then I got an email from someone asking for me to give him a call.
Now, I generally prefer email, since I hate talking on the phone. I often have difficulty picking out what people say, as well as remembering things auditorially, which makes the phone a poor medium for me. You should have seen me working at the technical help desk at Miami; I had to repeatedly ask people to spell their last names and recite their phone numbers in order to get them right; it was awful.
Anyway, I prefer face-to-face or text-only communications, but since there was someone seemingly interested in the Surface, I decided to put aside my anxieties and give him a call.
The gentleman had a thick accent, which worried me since I knew I’d probably have to ask him to repeat himself a few times, but after some initial questions he had about the tablet, he offered $400, so I felt good about the situation.
I had since reduced the price on craigslist from $499 to $490, and then again to $480. I had set my floor at $450 in my mind, and the $400 offer made it look like we could probably come to an agreement.
“I couldn’t let it go for that low, but I could do $465.”
“How about four fift-?”
“Was that 415?”
“No, four fif-ty.”
At this point, I was relieved. I’m not entirely comfortable negotiating (especially over the phone . .), and I knew I was going to get as much as I wanted. Being happy to get out of the situation, I thought about it for a bit and accepted.
It’s always good to think about their current offer before accepting it, or at least fake like you’re thinking about it. If you immediately accept, they might think they’re being taken advantage of. Or, if you have to negotiate with the person again in the future, they might think they could get a little more out of you next time; obviously that wasn’t an issue here, but it’s something to keep in mind.
Aiming For The Floor
Later, after thinking about the entire ordeal, I realized my mistake. Instead of accepting his final offer, I should have asked, “Would you go for $460?”
If I offered $460 and he said ‘no’, he’d almost certainly still go for $450, so there wasn’t much risk in it. He also might have just accepted it, which would have been an extra $10 for 5 seconds work; that’s $7200 per hour. But if he didn’t, he’d probably offer $455, which I would take. That’d be an extra $5 for 20 seconds work (don’t forget to pause before accepting!); only $900 per hour, but it’s still lawyer fees.
Yeah, it’s kind of silly to think of $5 as $900/hour, but that’s what it really is. Money is money, so why not get what you can? It only costs you seconds of your life, so it’s a great deal.
Unfortunately, I was so fixated on my bottom line, that I let the negotiation steer towards it. I also let my anxiety get the best of me. If, when he initially offered me $400, I set my sights on $460 instead of my bottom line, I very well could have gotten it, or very probably gotten to $455. My lifestyle won’t change because of the extra $5, but anything better than your bottom line is pure gravy.
Overall, it was an interesting endeavor. I got to experience what I had only known intellectually about negotiating and bottom lines, cementing it in my mind for next time.
I learned that I shouldn’t let my anxiety dictate my actions. A negotiation is just two people trying to come to a mutually beneficial agreement; no more, no less. Rather than just trying to get out of the situation as quickly as possible, it’s better to focus on maximizing your slice of the pie, as long as the other person finds his slice acceptable.
I also learned that even though I might not like talking on the phone, it’s probably better than email for negotiations. It shows the other person that you’re a real person on the other end, and not just some number, which seems to make them more reasonable negotiators.
In the end, I didn’t get a different tablet, but Julie and I bought new phones with the money. Overall, I’m happy with my phone as a holiday gift, and I’d call the experience a success.