Splitting the Difference in Negotiation - Business Negotiation Services

Last night I was conducting research in negotiation (American Pickers was on TV) and I watched a classic negotiation technique (Splitting the Difference) play out.? Mike was looking at a motorcycle frame and asked the owner how much he wanted for it.? The man said ?$1,000?.? Mike offered him $800.? The man came back with an offer to split the difference at $900.

Okay, what would you do?? Meeting you half-way seems fair and then you are both happy right?? Wrong.? If you are sharp and look at the situation, this offer moves the seller substantially toward the buyer and is a big concession on the seller?s part.? Are you in the money and is it at?a price you can accept, can you get? more from the seller by offering something less than that amount, what is your read of the other party ? is this their final offer?? Mike did not want to pay $900, and figured the guy would come down more so he offered him $825.? There was not much movement on Mike?s part and it put the seller in a position where he had to stay where he was at $900 and risk not making a sell or offer a further concession.? He agreed to the $825 price and shook on the deal.

This illustrates the danger of splitting the difference, which is that you ?tell? the other party that you are willing to go at least that far in price and leave yourself open for further concessions.?? What could he have done differently to avoid this if his goal was to end at $900?? One way would be to move toward that number in smaller increments to see where the buyer is on price.? On the other hand if he was trying to get rid of it (to me it was a piece of junk that was literally rusting away) then offering to split the difference was a good signal to let the buyer know he was willing to negotiate and get an agreement.

The bottom line is to be careful if you offer to split the difference.? You might not be where the other party wants to be and you may get a counteroffer that you cannot accept.

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