The cinnamon Case: Sales negotiation - The seller

The cinnamon Case: Sales negotiation - The seller 

The trading company Mahek Masala Products Pvt is a famous for selling spices in Kerala, in Southern India. They just acquire an entire lot of 1,000 kilogram of high-grade cinnamon. They are trying to sell it. For this offer, they have two potential buyers but this negotiation was with Offshoot Intermediaries Limited. I was in charge of selling the cinnamon lot to Anthony who was the CEO of Offshoot. We started presenting the companies and the condition of the deal to create a trustful atmosphere, and then, we started to speak about the price. I was a little bit in a stronger position than my counter partner because he accidentally revealed me his BATNA, which allow me to make the first offer. I asked him to be sure and reformulated his information before making my proposal. He told me that he couldn’t go up to Rs 600,000 for the entire lot, so I started at 750,000 which was my best-selling price. I was feeling very comfortable at that moment because I could propose more than his price which allow me to negotiate it and not lose too much without revealing my own BATNA. Of course, it was too much for him and I try to convince him using objective arguments, playing on his actual situation with the government. In fact, for him, it was the perfect option to arrange his problems with the quality of one of its drug formulations, because the cinnamon I sold was a product with exceptional quality. Moreover, it will be good for Offshoot to reassure its consumers and gain in popularity. He offered me a price of 550,000 because he told me he had also other cheapest options with a second-grade cinnamon powder and that he can’t afford my first price. I tried to create value to strengthen my BATNA, who was selling the whole lot at the best price possible or selling 700kg for Rs 390 per kilograms. My walkaway price was Rs 360 per kilos to cover all the associated costs necessary to clean the cinnamon. That mean, that any offer beyond this price would be acceptable to me.

We had some difficulties to negotiate the price and we had to stop the negotiation various times to recalculate the best price of the zone of possible agreement. We were negotiating to find a price between Rs 360 per kilograms and Rs 750 per kilograms. But as my counter partner had some figures regarding the additional prices which affect its final price, he was a little bit lost and the negotiation starts to get difficult for him because he revealed me information he should not, like the last price he is willing to pay regarding to other alternatives he had from other providers. I was in a stronger position because the BATNA of my partner was not clearly define and weak, so it was easier for me to impose my price. During all the negotiation, I felt in a superior position which allow me to make a very good profit at the end of the agreement. I could take more advantages of the situation but I was concerned by my partner behaviour and I left money on the table. Furthermore, at the end we reached a win-win agreement satisfying both of us. Offshoot bought the entire lot for Rs 590,000 which is a little bit less than his walk away price and comparing with the initial purchase price (Rs 290,000), I sold the whole lot for a good acceptable price.

At the end of the negotiation both parties felt happy and I was satisfied of my offer. However, to improve my negotiation skills I need to stay more neutral and not be affected but my counter partner behaviour which can be disruptive. I need to be more persuasive when I am negotiating the price and try to not reveal too much information that can help my opponent to define my walk away price or best alternatives. I was happy to use the strong argument of the quality of the product and the good reputation of the company which help me to strengthen my position in the deal. I could have done better insisting of the other prospective buyer Marex Pharma Ltd to pressure Offshoot. That way, I could showcase that he could lost a very good offer. He may be open to pay more to get this opportunity.  Next time I should ask more questions and take time to resume the other side arguments in order to make the best deal possible.