O'Reilly logo

Practical Negotiating: Tools, Tactics & Techniques by Tom Gosselin

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

The Currencies Triangle

Let’s take a contract with the following parameters:

Price discount= 10 percent
Volume commitment= 10,000 units
Length of contract= Two years

As the supplier, you have put together this triangle based on market conditions and current rates. The parameters make good business sense and the deal is profitable. The customer responds that he wants a deeper discount—12 percent. He wants to extend the line by X (see Figure 4.2).

Figure 4.2. Pricing Discount

(Note: The inside area of the triangle must remain proportional.)

The supplier can then respond with two options:

  1. If you want an extra pricing discount (12 percent), I want a larger volume commitment—say, 15,000 units.

  2. If you want an extra pricing discount (12 percent), I want a longer contract—say, three years.

Figure 4.3 shows how the two options look as triangles. Making a concession on the pricing discount allows the supplier to get something of value in return, making this a win-win outcome.

Figure 4.3. Triangles for Option 1 and Option 2

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required