Ridiculous offers are made in a negotiation to create concessions or to get a negotiation started, yet they can sometimes stall or end the negotiation with one or more parties walking away angry. This is an aggressive negotiation tactic.
For example, let’s say that you decide to sell your 2000 Honda Civic and you advertise it for $10,000, which seems a fair price to you. A buyer answers your advertisement and offers you $5000 sight unseen. He says that the car has very high mileage, but he is willing to take a chance on it, since Hondas have proven to be very reliable. Insulted and discouraged, you tell the buyer to hit the highway since it is obvious that the two of you are too far apart to go any further. Both parties walk on the deal.
Ridiculous offers beg for a counter offer and they can be a way to get the haggling started. But, if the gap between the two parties is too great, it typically means that at least one of the parties is wrong or uninformed about the value of the item up for negotiation. It is up to the more informed party to help the other party understand the true value.
Yet, a ridiculous offer is still an offer and this creates an opportunity to do a deal if you can keep your cool about it. One way to combat the ridiculous offer is to laugh at it; act as if the other party isn’t serious; this may embarrass the other party or they may decide to back down from the ridiculous offer. Alternatively, you can just ignore the offer, although this can sometimes anger the other party.
Maybe the better response is to ask why they would make an offer like they did. It could be that there is a misunderstanding about the negotiated item. Give them a chance to explain themselves. Let the other party know that their offer must be amended for the negotiation to continue. Be firm.
In our example of the Honda Civic, the buyer may not realize how well maintained the vehicle is, since he has not looked at it in-person. A viewing of the car could change his mind about his offer price. A good response by the seller would be to encourage the buyer to come take a look at the car.
It is also worth noting that some cultures are proud of their negotiation skills and will choose to start the negotiation with a ridiculous offer. For example, if you visit a border town in Mexico you will likely find a pretty piece of pottery conveniently priced at $10.00 for the American tourists. If you start to walk away from the pottery shop, the shopkeeper will say, “Today, $7.00 for you, amigo”. A little more haggling on your end gets you the pottery for $5.00; you leave with a big smile on your face. As you walk away the shopkeeper smiles too. In Mexico, managing a big negotiation gap is normal while in the US we might just get angry and quit the negotiation.
Ridiculous offers are an aggressive negotiation tactic; stay cool and be prepared to handle them. On the flip side, if you choose to use this tactic, proceed with caution. Ridiculous offer are risky, while reasonable offers will always be considered.
John Bradley Jackson
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