Negotiation is the art of improving what you can obtain. It is a fundamental skill to have in business today. Everybody wants to obtain the best deal possible when they negotiate, either for themselves or for their company.

There are different techniques/strategies you can use when you want to do this when negotiating in English. You can use persuasion, force or logic. The one you choose depends on who you are negotiating with and how they respond to what you say.

In this online exercise on negotiations, we will both look at and I will explain the purpose of certain phrases in English which are used in business negotiations when people want to improve their side of a deal. In addition, we will also look at how to react to these, and how to suggest a compromise.

After you have done this exercise, you can also improve your knowledge of both strategies and vocabulary to use in our online exercises for other negotiation situations. These include delaying in neogiations or dealing with unreasonable demands in negotiations or convincing people to buy.

Click here to see more of our free online exercises on business negotiation vocabulary

Exercise: Negotiating price

Read the following negotiation between a television manufacturer and a components company for a two-year contract for components. Bill is representing the television company and Fleur is representing the component company.

From the context, try to guess what the meaning of the words/phrases in bold are. Then do the quiz at the end to check if you are right.

Fleur:'So, we could supply you with 40,000 components per month, for a two-year period at a unit cost of $4.35 per component.'

Bill:'There seems to have been a slight misunderstanding. You do realise that we want to order nearly a million components. And for that quantity, the price per unit does seem to be very high.'

Fleur:'We have taken into account the size of the order you require. And we have reduced the unit price markedly from what we normally ask. In terms of unit price, what were you thinking of?'

Bill:'Well, we were hoping for something around $3.40 per unit. Please bear in mind that we want to order nearly a million components, not a thousand.'

Fleur:'$3.40 per unit. I am afraid that is out of the question. If we sold it to you at that price, we would be making loss on every unit sold.'

Bill:'Well, we have received a quote from one of your competitors at $3.53 per unit.'

Fleur:'I am afraid that we can't match that. But if I were you, I would be asking myself how can they sell the components at such a low price? I would say that they are sacrificing the quality of the component for price. But there may be some room for manoeuvre. If you were to increase your order to 50,000 components per month, then we could lower the unit cost to $4.15.'

Bill:'For 50,000 units per month we wouldn't expect to pay more than $3.85 per unit. I would say that this price is the going rate for the quantity.'

Fleur:'I don't think that we could go that far. Under $4 per unit. It's too low.'

Bill:'Well, could you meet us halfway? At $4 per unit?'

Fleur:'If that's $4 per unit, 50,000 per month for 2 years. I think we can do that.'



Quiz:

Below is a definition/description of each of the words/phrases in bold from the above text. Now choose the word/phrase from the question's selection box which you believe answers each question. Only use one word/phrase once. Click on the "Check" button at the bottom of the quiz to check your answers.

When the answer is correct, two icons will appear next to the answer. The icon contains extra information on the word/phrase. In the icon, you can listen to the pronunciation of the word/phrase.


1. A polite but direct way to tell somebody that something they have asked for is impossible, is

         

I am afraid that is out of the question:
(phrase) Although this phrase is polite, it's also direct. It is used in negotiations to reject a suggestion, offer or request that somebody has made. 'It's out of the question' is too direct to be used in most business situations. But by adding the phrase 'I'm afraid that', it makes the phrase sound a lot politer. In Spanish: "Me temo que esto no es posible".

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I am afraid that is out of the question:
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2. The price that is normally paid in the market for something, is called the

         

Going rate:
(noun) This is commonly used in business. It means the normal price that is paid for goods or services in the market at that particular time, i.e. the 'market price'. As a result, the 'going rate' changes depending on demand and supply. It is used with the adjectives 'below' and 'above', e.g. 'It's a good price, it's below the going rate'. In Spanish: "precios de mercado".

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Going rate:
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3. A phrase that asks the other person to tell you what they are 'wanting to pay' for something, is

         

What were you thinking of:
(phrase) This is a politer way to say 'What do you want?' It can be used in negotiations to ask about price, service, quantity etc... It is used when the other side/party has rejected an offer that you have made. The use of the past verb 'were' instead of the present verb 'are', makes a subtle but important difference. If the other side/party responds to this question with 'we were thinking of', then it means that they are willing to negotiate or make compromises, because they are using the past and not present tense. In Spanish: "Qué pensaban".

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What were you thinking of:
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4. A phrase where one side makes an offer to the other side where they both make a compromise, is

         

Could you meet us halfway:
(phrase) This phrase is used when one side/party makes an offer of a compromise on an issue (like price or quantity). There is a condition that the other side/party must also compromise. For example, one side originally offers to pay $100 for an object, the other side counteroffers with $120. 'Could you meet us halfway?', means that one side suggests a price between the two offers of $110. In Spanish: "podrìamos llegar termino medio".

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Could you meet us halfway:
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5. A polite way to inform somebody that they are wrong/mistaken about something you have said, is

         

There seems to have been a slight misunderstanding:
(phrase) This is used to check if the other side in a negotiation understands what you want or can provide. This phrase is normally followed by a clarification, e.g. 'we're looking to have the new staff work on both Saturday and Sundays'. This is very polite because it doesn't blame anybody for the misunderstanding. In Spanish: "parece que ha habido un pequeño malentendido".

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There seems to have been a slight misunderstanding:
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6. A phrase where one side says that they might be able to make a compromise, is

         

There may be some room for manoeuvre:
(phrase) This is used when one side/party offers the possibility of a compromise in a negotiation. Normally, it's in reply to an offer they have received, but which they only want to partly accept. When they say this phrase, it is normally followed by an 'if statement', where they say what they want in return for accepting it, e.g. 'There may be some room for manoeuvre. If you accepted a 3 year contract instead of 2, then we could lower our price to $1 million a year'. In Spanish: "quizá haya algún margen de maniobra".

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There may be some room for manoeuvre:
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7. A phrase that means you can't accept the offer/demand the other person has made because it is too much, is

         

I don't think that we could go that far:
(phrase) It is used to reject an offer that has been made, but it suggests to the other side/party that if they improve their offer (it's normally the price), then it may be accepted. In effect, it shows that you are willing to make a compromise if the offer is right. In Spanish: "creo que no podremos llegar tan lejos".

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I don't think that we could go that far:
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8. A polite phrase which is used after receiving an offer to say how much you are wanting to pay (where you want to pay less), is

         

We were hoping for something:
(phrase) This is a politer way to say 'we want to pay' and is normally used by the side/party buying the goods or service. The use of both the verb 'to hope' and the past tense of the verb means they are willing to negotiate and make a compromise. This is normally followed by 'around' and a price, e.g. 'we were hoping for something around $1 million for 2 years'. In Spanish: "esperábamos".

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We were hoping for something:
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9. A phrase where you tell the other person that you are unable to offer the same price or conditions that another company has given them, is

         

I am afraid that we can't match that:
(phrase) Often in negotiations the side/party that wants to buy, will say that they have received a quote/price from another company. If the seller can offer the same price/conditions, then it's common to say 'we can match that'. If they can't or won't, then they use 'we can't match that'. The use of 'I'm afraid that', makes it sound politer. In Spanish: "me temo que no podemos igualarlo".

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I am afraid that we can't match that:
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10. A different way to say you 'have received a price from another company' for the contract, is

         

We have received a quote:
(phrase) A 'quote' means a price that you have been offered by a company for goods or services that they sell. It is commonly used in both business and general English. In Spanish: "hemos recibido un presupuesto".

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We have received a quote:
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11. A phrase where the buyer sets a limit on what it is willing to spend on something, is

         

We wouldn't expect to pay more than:
(phrase) Although this phrase appears to set a limit on what one side/party is willing to pay for a good or service, by using 'we wouldn't expect', it actually means that they could be willing to pay more than the limit if they are offered a better price, service, quality, quantity etc... from the other side/party. This phrase can also be used by the side/party selling the goods/services, e.g. 'We wouldn't expect to receive less than $1.5 million for the contract'. In Spanish: "no deberíamos tener la espectativa de pagar más de".

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We wouldn't expect to pay more than:
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Practice

Now that you understand the meaning of the words/phrases and when to use them, practise using them by creating your own sentences with them in English. Also click on the icon next to each correct answer and listen how each is pronounced correctly.