Business negotiation exampleA: Hello, Mr. He. It's a pleasure to see you again.B: It's my pleasure to see you again, too. Mr. Smith.A: I believe you have received our proposal regarding the woolen textile project. I think it's always more convenient to discuss things face to face.B: Yes. I hope we can come to an agreement this time.A: Me too. But it requires efforts by both sides to accomplish that.B: Quite right. Shall we come straight to the point right now?A: Fine. I believe you have studied our proposal. Could you let me know how you feel about it invery general terms?B: Thank you very much for sending us the proposal. But we think we needed to discuss in greater detail some of the points such as price, the mode of payment, etc.A: They are certainly open for discussion. Shall we discuss them one by one, beginning with the price?B: I don't have the slightest objection.A: I think you must agree that our quotation is quite attractive.B: I'm afraid I can't agree with you there. We have received offers from some other suppliers which are much lower than yours.A: If you take the quality of our machines into consideration, you will find our price quite fair and reasonable.B: I agree that yours are certainly of good quality, but there cannot be such a big gap between your price and those of other suppliers just because of good or better quality.A: You must be aware that the design of our equipment is very advanced and it was not developed until the mid 1990's. I believe the price is very attractive. B: I'm not so sure of that. To tell you honestly, there's keen competition here. We are also discussing our need with two other companies.A: I believe we'll win the projects as you will no doubt(adv.) find our price very competitive if you take everything into consideration.B: I think it's unwise for you to insist on the original price. To be frank, successful businessdepends very much on the price. If you hang on to your original offer, we'll have no alternativebut to buy from some other supplier.A: What do you think is an acceptable price then?B: To conclude the deal, you should at least reduce the price by 20%.A: 20%?It's beyond the limits of what I can discuss. I'm afraid I have to talk to my office first.B: Please. We'll wait for your reply.(Two days later)A: After our talk the other day, I immediately contacted my home office. I've been instructed toinform you that we are and have always been sincere in doing business withyou, but the gapbetween your counter offer and our price is too wide.B: We are also sincere in hoping to conclude the deal with you. And we believe our counter offeris quite well-founded. It is in line with the international market price.A: In order to conclude the business, may I suggest that we meet each other halfway?B: You mean you will reduce the price by 10%?A: Yes. That's really our rock-bottom price. We can't make any further concessions.B: But I think it's still a bit too high. If we can meet each other halfway once more, I think we canit a deal.A: You certainly have a way of talking me into it. All right, I accept.B: I'm very grad that we've now come to an agreement on price. We'll go on to the other items atour next meeting.A: Yes. I hope everything will be smooth-going then.A: Thank you for these 50 sets Weaving Machines XCI. We've shuck a deal at last. But whatabout payment? What arrangements will you make?B: We shall open a letter of credit in your favor, to be settled in US dollars. A: That's good. When will you open the letter of credit?B: 30 days before shipment.A: Fine, but this L/C must be a confirmed an irrevocable one. That's the rule of our company,though we know for certain that a national enterprise of your standing will never default.B: we can do that, but Ms. A, since this is a rather substantial order, and since we have neverbought such machines from you before, our customers demand that 90 per cent of the creditamount be paid at sight, that is, against the presentation of documents. The rest...A:Yes?B: The rest is to be paid after the machines have arrived here, and after they are provedsatisfactory on trial.A: No, Mr. B, that can't be done. We have never done business on such terms. B: Such terms are quite common in the machinery trade.A: Look, Mr. B, we ask for full payment at sight, because we guarantee 90 percent mechanicalefficiency for all our products. Do you have the same guarantee from othersuppliers?B: 90 per cent mechanical efficiency. That's under your terms of sales. It's the sellers' responsibility to supply goods up to their standard.A: In fact, because the climates vary everywhere, mechanical efficiency could hardly go beyond85 per cent. The usual percentage is between 82 and 83.B: I know our products extremely well. That's why I promise such high efficiency. If you like, wecould send fitters to China to help fix the machines to ensure good operation. We guarantee you'llbe satisfied with our equipment. But the total amount must be paid in full upon receipt of thedocuments.A: But other suppliers are offering better terms. Some even allow payment 60 days after sight.B: If that's so, I'm afraid I'll have to walk out of this meeting room disappointed. A: Did you say you could send fitters here to ensure good operation?B: Yes. We often send technicians abroad to offer after-sales service to our customers.A: If your fitters would come along with the machines to help with the fixing, to ensure that allmachines run properly, and if after-sales service could be provided, we agree to make payment infull.B: I'm more than grateful to accept your terms. Thank you, Mr. A, but you nearly upset the apple cart. Just now I thought the last two weeks of negotiations were a wasted effort.A: Now, Ms. B, you don't feel disappointed anymore, do you?B: Oh, certainly not. I'm in high spirits now.A: On the whole, your delivery has been quite satisfactory. We have little to complain about, yelthe latest shipment is so disappointing. We feel we must make a complaint. B: We are very sorry that this has happened. You said a number of bales were damaged. Is it thatserious?A: Some were water-stained, some soiled. I suppose you won't be convinced until you have seenit with your own eyes.A: These bales do not appear to have been properly packed. They have become sodden.B: But the goods were in fine condition when shipped.A: The result of our investigation said the damage was caused sometime in transit, but it isinadequate packing which allowed the package to open in the first place.B: Goods for export are specially packed. Our packings are usually suitable for long distancetransportation. Are you sure it wasn't caused by improper handling? Even the strongest packingcan give way under rough handling, you know.A: I often come to watch the handling of cargo on the dock personally. I can assure you roughhandling is not common here. We follow the standard procedures.B: Have you checked how much of the contents of the damaged bales can still be used?A: Yes. The majority can be salvaged. Here's the surveyor's report.A: Mr. B, we are very anxious about this. We have counted on receiving the shipment to completeseveral orders. Now we'll have to keep our clients waiting. I'm sure we can count on your supportto help us overcome the present difficulty.B: We understand your problem, Mr. A. In fact, that's one of the reasons I'm here. Well, what doyou suggest for a settlement?A: You won't agree, I know, to our returning the goods to you. The handling and shipping chargeswould cost a lot. Since we have very good relations with you, we are willing to accept theshipment if you will allow a 20 percent reduction in price.B: That's a little higher. The report says that only 10 percent is unusable.A: Yes, but it's quite a job to sort out the unusable fabrics.B: Mr. A, let's compromise on a 10 percent reduction in price on this shipment. And for your nextorder, we'll give you some preferential terms in addition to what you are getting from us now.A: I appreciate your quick decision. Mr. B. We accept the proposal. I am glad we found a solution.A: OK, let's get down to business. To begin with, Mr. B, let me introduce to you a completely newconcept in toy manufacture-our recently launched E.T. brand plastic roller-skates. You have thesamples and catalogues in front of you. They are a breakthrough in roller-skates technology-witha new kind of plastic which is strong and light, and they will appeal to both children and theirparents. I am confident that they can catch the market everywhere.B: These roller-skate do look nice, but their prices are much too high.A: Which of our product lines are you particular interested in, Mr. B?B: I could be interested in the ones I've highlighted. But I'd like to hear whatyou have to sayabout prices and discounts.A: The tag price of these roller-skates is $50 a pair, but I'll make it $45 for you. What do youthink?B: That's much more than I was prepared to pay.A: How about $43?B: I offer you $30 a pair.A: That's too little.Well, I'll come down to $40.B: All right. To meet you halfway I go up to $35, but not a penny more. Is that acceptable?A: Ok, it's agreed.B: That leads us to the question of discounts.A: I'm certainly happy to talk about discounts. But can you indicate to me the quantity you'd liketo order?B: Fair enough. What discount would you offer on an order of, say, one thousand pairs?A: For an order of that size, Mr. B, I can give you a discount of 10%.B: Ten percent!A: Just let me finish. Yes, 10%, but with a guarantee of delivery within two months.B: Delivery must be within two months, or I'm not interested. I want the goods to arrive wellbefore the Christmas season begins. Let's be clear about one thing. I hope you realize I must havea larger discount than what you've offered.A: Well, if you commit to buy 2,000 pairs, then I could consider a larger discount.B: How much larger?A: If you order 2,000 pairs, I can offer you a 20% discount.B: Ten percent, twenty percent. I'm getting tired of this. You are playing games. I'm looking for amuch larger discount. I'm ordering in large quantities and I operate on small margins, you see?A: If you want a big discount, then you must make the order a large one.B: We are going in circles. Isn't an order of 2,000 pair large enough? Unless you make aconcession we're going nowhere.A: Mr. B, don't let us get stuck over the question of price. We can meet each other halfway. Youincrease your order to 2,500 pairs and I increase the discount to 25%. Is that agreeable?B:Well, I suppose so.A: Good. Now let's look at the terms of payment.B: Ninety days.A: I'm sorry, Mr. B, but that's completely unacceptable. Our standard policy on discounts over20% is payment within thirty days of delivery. If you order 3,000 pairs then I can authorizepayment in 90 days.B: This is my last offer: order of 3,000 pairs at a discount rate of 30% and delivery in 60 days.Take it or leave it. Or I'm going to have a look elsewhere.A: I think that offer is acceptable. So all we have to is finalize the delivery at}angements.B: I must have a guarantee of delivery well before Christmas. It is August now. What is thesoonest you can deliver?A: You can have the first one thousand by the end of next month.B: What about the balance of the order?A: We can deliver that in two consignments in October and November.B: I'd rather have everything delivered by the end of October.A: Well, Mr. B, that will be difficult, but as you have been so accommodating over the question ofprice, I think we can at arrange that.A: At the moment we do not have enough oil for essential services such as the country's electricitysupply. The Euronian government would like to make a contract with Achemid Onasti for lOmbagels of crude oil to provide power for essential industries.B: We can only offer you 3m bagels of crude oil. As you said, oil is a very scarce commodity atthe moment, so we can't sell you more than that.A: We understand that because of the crisis oil is very scarce at the moment. But you own theworld's biggest fleet of oil tankers. Even lOm barrels are not too large a quantity for you.B: Ok, in consideration of the good relationship between us, I'm prepared to sell you Sm bagels.A: Come on. Don't be stingy. You should sell us Sm barrels at least.B: That's agreed. We are ready to sell you Sm bagels of crude oil. But you know that the oil priceon the world market has gone up to $100. The price we are offering you will be $70 a barrel,taking into consideration of our good cooperation in the past.A: I know you have buyers offering higher prices. But don't you realize that $70 is not goodenough to remain in good terms with us?We still want the oil at the standard price of $50 a barrel.B: The recent political problems in the Middle East are threatening the supply of oil to Euronia. Itis possible that the new oil crisis will lead to a state of emergency, which could even mean that theprice will double. We are already offering you a very low price due to special considerations. Youwant to secure a contract at the old price. But is that realistic? Look, I'll bring the price down to$60, but we expect you to pay for all the oil in advance.A: We accept the price at $60 per barrel. But we can't agree to advance payment for all the oil.Payment will be made after each delivery.B: All right. But you must at least make a 10% down payment at the beginning as you did before.A: That seems reasonable, so we accept it. This leads us to the time of delivery. As we need the oilurgently, it must be delivered quickly and regularly. We expect a delivery of lm barrels a monthover the next five months.A: We want the delivery dates for the oil to remain flexible. We cannot guarantee any dates at themoment, as political troubles in the Middle East are making deliveries uncertain. We will try ourbest, but we can't promise anything.B: Well, we can work that out together.A: As you know, we own an airline that uses the main Euronian airport in Capital City a great deal.Now that we are doing the Euronian government a favor by selling you any oil at all, we wouldlike to ask in return for a reduction of 40% in the taxes on our income from Capital City Airport.B: Well, if we get the quantity of oil at the price we agreed on, and if all the deliveries come ontime, we will allow a reduction of 10% in the taxes on all the income of Onasi Airlines fromCapital City Airport.A: Come on. You talk about being realistic. Since we've done you a big favor you should dosomething reciprocal, shouldn't you? A 10% reduction is surely not the best you can do.B: Well, the best we can is maybe to offer Onasti a 15% reduction in taxes. A: I hate to strike a bargain. But I suggest that we meet each other halfway.You grant us a 20%reduction in taxes. Is that OK?B: OK. It's a deal. We can set out to prepare the contract now. May I remind you that the contractshould include a penalty clause, that is, if you fail to honor the contract we will increase, perhapsdouble your taxes, or stop some or all of your planes using Capital City Airport. A: No problem. You can count on us.A: Mr. B, as you know, we are a major manufacturer of microprocessors, which are sold all overEurope. We have to transport about 1,000,000 units a year, so we've come to approach you, as weknow that you are one of the biggest transport firms in Europe. As far as we are concerned, it isvery important that when transporting microprocessors, the drivers making the deliveries must bereliable and punctual. The goods must be handled carefully and efficiently. B: Thank you for your interest in us. And we are also interested in providing transport for RSA,and we have the capacity to do as much business as RSA can offer us. What's more, our driversare the best in Europe because they are much better paid than in other firms. They all have goodqualifications, and are always reliable and punctual. They have a reputation for efficiency andcareful handling of goods. We already have contracts with several international firms, deliveringgoods all over Europe. If you like, we can provide references from other firms who are verypleased with our services.A: Now, could I ask you about your prices?B: Our prices are fairly standard for all our deliveries. Our normal charge for lorry transport is$8,000 per 1,000 kilometers, and we've estimated that we could get about 1,500 of yourMicroprocessors into one of our lorries because our lorries are much larger than other firms.A: Well, look, I'm rather worried about this question of cost, it seems this would put out transportcost up by one third and I'm afraid that wouldn't be possible.B: Well, we could probably lower the price for him. This would depend on the amount of business,which is... er....A: I wonder if I could come in here. Mr. B, what would your lower prices be for,let's say, onemillion microprocessors for export?B: Well, of course, this would depend on the contrast, but I would say, for that amount ofbusinesses we could probably lower the price about 10%.A: Ten per cent?B: Yes.A: Ten per cent，so you'd be asking $7,200 per 1,000 kilometers.B:Yes.A: wand that would be for 1,500 microprocessors each time?B:Yes.A: That's still a little high for us. Would you then be prepared to accept responsibility forbreakages? As a rule, we expect the transport firm to pay for any breakages. B: No, we don't take the responsibility for breakages. Our normal costs do not include breakages.The client is always responsible for the insurance of goods in transport.A: I seew wellwmow, we really couldn't accept that. Is there any possibility of a lower pricefrom you?B: This might also be possible, but again, of course, it would depend on the amount of business.A: I see. Well, perhaps we can still come to an agreement, Mr. B. can we at}ange another meetingfor next week?B: Certainly.A: Next Tuesday perhaps?B: That would be fine.A: Good. Goodbye, then.B: Goodbye.。