Tactics Scenario: I Have Worked Discussion Chapter

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FOUR: The power tends to be tilted my way, not his, because he wants the revenue from the shirts (it is normally a fundraiser for nonprofits on campus) and he really doesn't want to have to count the shirts in and out. So he often will just take the cash advance I offer for the right to sell in his building. I offer him a flat $2,000 for the rights to sell and he likely will take it, or perhaps negotiate to get $2,500, which I expect him to do. If the deal is sealed at $2,500, and indeed we sell around 880 shirts to this audience, I have saved about $2,000 from what I would have had to pay if we had agreed to 35%. It's called "buying out the house" and many vendors use this tactic.

FIVE: Using Multiple Equivalent Simultaneous Offers (MESOs) might work in some cases. Anticipating that the concessionaire may balk at accepting the flat $2,000 (even though I fudge a bit and tell him my shirts aren't selling that well and we're out of mediums of our most popular shirt) so we offer him 50 t-shirts to go along with the cash advance as our first offer.

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The concessionaire can use these shirts to make his volunteers working as ushers happy. SIX: If the concessionaire is street savvy, he will see the $2,000 flat fee offer as an Increment of Concession (IOC) on my part, and since we're dealing with just one number (the fee for selling shirts in his building). I, too, see the potential deal as an IOC, and willingly go up to his next figure as long as it means my boss gets a big savings by avoiding paying 35% of gross sales.

Conclusion

Our group played at Madison Square Garden where the concessionaire wanted 57% of our gross sales. Our BATNA was to walk away, and we did. Doing the math, we could clearly see we would lose money (based on our costs of producing the shirts, paying our sales staff, and transporting shirts across the country). But this was part of the dynamics of negotiations. Our best strategy in a university facility is to buy the house; our best strategy in a commercial building with outrageously high percentage to be paid is to walk away.

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