Negotiations: First Offer Contains Aspiration Pricing

© Frank Haluch 2011-2025

If all first quotes are aspirational pricing, should the buyer make or receive the first offer? The answer is “It Depends.” 

If the marketplace is Pure Competition or Monopoly, the buyer receives the quote. For Monopolistic or Oligopoly Competition, if the buyer has solid data on current market conditions and costs, the buyer should make the first offer.

I have been teaching Negotiation Skills for many years. During a negotiation debriefing, participants report the following lessons learned:

• Spend more time defining the situation, organizing information and determining what information is needed to be verified during the negotiation
• Ask questions to thoroughly define the potential purchase
• Manage and use time to your advantage
• Listen and hear what is being presented

During the debriefing, I would highlight my observations:

• Not asking the facilitator for assistance (in real life it would be a more experienced negotiator for assistance)
• Don’t ask “why” questions. “Why” questions don’t lead to solving a problem
• Not prioritizing their “Needs” (critical to success); “Wants” (makes the deal even better but not critical to success) and “Giveaways” (potential concessions)

Lastly, an article in the Harvard Business Review documented those buyers with "high aspirations for low prices" did significantly better than buyer’s with "low aspiration for lower prices."

Sourcing is for Convergent Thinkers!