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price negotiation

What is Price Negotiation?

Knowing what you will do if you can’t get a good deal will give you bargaining power in your price negotiation. 

In a price negotiation or other distributive (single-issue) negotiations, it can often seem as though the buyer has limited options: accept the price or lose the deal. But sellers also face the dilemma of losing the sale. In both cases, the obvious BATNA (best alternative to a negotiated agreement) is to walk away from the deal. 

However, there is almost always room for haggling. Your BATNA also helps you calculate your reservation price—the highest price you’d be willing to pay in the current negotiation.

Interestingly, research suggests that in single-issue price negotiations, asking a counterpart to compare your offer to the minimum they’ll accept can help you not only get a great deal but ensure they’re satisfied with the end result. Offers look more appealing when we compare them to the least we would accept than when we compare them to the most we hoped to achieve. 

It’s also important to be polite and cordial throughout the negotiation process, and be willing to accept no for an answer. 

Effective negotiation strategies in business are critical. Get the information you need to succeed today by downloading our free special report, written by some of the nation’s foremost experts in negotiation, Business Negotiation Strategies: How to Negotiate a Better Business Deal. This free report from Harvard Law School will teach you how to negotiate a business deal and gives you the tools you need to navigate even the stickiest business deals.

We will send you a download link to your copy of the report and notify you by email when we post new business negotiation advice and information on how to improve your dealmaking skills to our website.

The following items are tagged price negotiation:

Distributive Bargaining Strategies

Posted by Katie Shonk & filed under Negotiation Skills.

Wise negotiators recognize the value of both collaborating and competing at the bargaining table. They look for ways to increase the pie of value for all parties, often by identifying differences across issues and making tradeoffs. And they also rely on distributive bargaining strategies to try to claim as much of that larger pie for … Read More 

What Is an Umbrella Agreement?

Posted by Katie Shonk & filed under Dispute Resolution.

Business negotiators tend to want the best of both worlds. When reaching an agreement, they want to pin down parties’ respective rights and responsibilities, but they also want to retain the flexibility they need to deal with ever-changing business conditions. One solution to this apparent dilemma is to craft an umbrella agreement. … Read More 

Negotiation Examples in Real Life: Buying a Home

Posted by PON Staff & filed under Business Negotiations.

While many of our articles discuss negotiation theory and the latest research, sometimes it helps to discuss negotiation examples in real life when offering negotiation tips and advice. The following negotiation example is based on bargaining in real estate, a negotiation scenario many of us may face in our lifetime. … Read More 

Negotiation Preparation Strategies

Posted by Katie Shonk & filed under Business Negotiations.

When an important negotiation is looming, “winging it” is never the answer. The best negotiators engage in thorough negotiation preparation. That means taking plenty of time to analyze what you want, your bargaining position, and the other side’s likely wants and alternatives. … Read More 

For Price Negotiators, Preparation is the Key to Success

Posted by Katie Shonk & filed under Dealmaking.

Some cultures have a long tradition of haggling—bargaining back and forth about the price of an item—in markets and bazaars. By contrast, in the United States and many other countries, haggling between buyers and sellers is an under-practiced skill. You might routinely pass up opportunities to haggle in situations where financial negotiations are not the … Read More 

In Group Negotiation, Avoid a Turf Battle

Posted by Katie Shonk & filed under Business Negotiations.

In group negotiation, turf battles—heated conflicts over territory, control, rights, or power—are common. Department heads clash over scarce resources. Companies, community groups, and governments get tied up in lawsuits over undeveloped land. Across the globe, fishing groups have depleted fish stocks in their rush to catch the biggest share for themselves. … Read More 

Price Negotiation Advice for Consumers

Posted by Katie Shonk & filed under Business Negotiations.

It’s official: Price negotiations aren’t just for big-ticket items anymore. The prices of furniture, electronics, wine, jewelry, and other “medium-ticket” goods are now frequently up for discussion. The ancient art of haggling has made a comeback, so brush up on your skills with our six price negotiation tactics. … Read More 

Dealing with Difficult Clients: Price Negotiations

Posted by Katie Shonk & filed under Dealing with Difficult People.

When dealing with difficult clients, we sometimes can trace our struggles to the early stages of our interactions—including our price negotiations. If initial price negotiations are contentious and frustrating for the client, their unhappiness is likely to leave you handling difficult situations and managing difficult people in your ongoing business relationship. In this post, we … Read More 

In a Price Negotiation, Should You Make the First Offer?

Posted by PON Staff & filed under Business Negotiations.

Imagine yourself in a dilemma that only a privileged few experience: You’ve fallen in love with a dazzling, one-of-a-kind home that’s on the market without a list price. Instead, the seller’s broker encourages you to name your price. You’re unsure how much to offer—yet desperate to win the prize.  Leaving the sale price off of a … Read More 

Dear Negotiation Coach: “Bad acts” and better contracts.

Posted by PON Staff & filed under Dealmaking.

Q: I work for an international nonprofit that tries to eliminate “bad acts” around the world—not illegal activities, but ones that we consider unethical. We are currently negotiating with a U.S. business owner who is engaged in these bad acts. His business is generating losses, so we are trying to buy him out and put … Read More 

In negotiation, put your best foot forward

Posted by PON Staff & filed under Negotiation Skills.

Imagine yourself in these negotiating scenarios:

After a freelance designer has finished a big project for your company, you discover some urgent extra work that you should have given him. The designer mentioned that he needs a break and is going to take a few days off. Would you approach him about doing the work, and … Read More 

Aim high…or not?

Posted by PON Staff & filed under Daily, Negotiation Skills.

Adapted from “How High Should You Aim?”, first published in the Negotiation newsletter. Research shows that moderately difficult goals can energize people and increase their performance. In negotiation, parties with relatively high aspirations often negotiate higher individual payoffs. But there can be a downside: impasse and unethical behavior may be more likely. In a study conducted by … Read More