Whether it be for the environment, the trend, the money or the efficiency, the second hand market is growing more and more everyday, regardless of the goods that are sold. More or less everything that can be used, can be reused and so, sold to someone willing to buy a second hand object. It is also the case with industrial machinery.
The journey that an object makes from the moment it got posted to its arrival at its new owner is common to all objects sold. The current owner posts an offer, attracts potential buyers, discusses the price, prepares the transportation and sends it. There can also be a phase of after sales services.
At Exapro this journey is exactly the same, except the fact that we accompany you through the whole negotiation process.
Buyers and sellers have different expectations and usually confront each other.
While Buyers and Sellers are seemingly confronting each other, their goals are not so far apart one from the other. … Both want to make the best profit out of the deal and it leads to some frustration for at least one side if not both, nobody is really happy in the end. Sadly , negotiations that start that way are usually bound to fail.
Even if buyers and sellers have the same goals, they don’t necessarily have the same expectations. Let’s see what we can find about this.
Buyers expects to buy at the best price but also at the best conditions.
“The better the price but also the conditions of the equipment, the better for us”. This can be the motto of any second hand machinery buyer.
- First, the buyer needs to find a second hand machine, he will browse different websites. According to the kind of good, he will have access to a lot of different offers. If the information displayed will match his criteria, he will select an offer.
- The buyer will ask the Exapro’s agent in charge of the used machine any data that is not displayed in the offer. The agent, in the meantime will discuss with the seller in order to be sure that the machine is the best choice for the buyer.
- In order to fix a good price, the buyer will need to be sure that the machine is working well. He will ask for some pictures, or video. If an inspection is possible it both seller and buyer will meet in order to see the machine under power or at least a virtual visit if the time is playing against him.
- Exapro will verify if the seller and the buyer are serious, checking the company’s IDs, history, reputation…to make sure that both sides are clear and transparent.
- The next step will be “discuss the price of the goods”. Indeed, most of the first prices the seller will ask will be a bit too high for the buyer so he will bargain the price according to when, how and by who the machine will be dismantled and transported.
- Once they agree on a price, they have to arrange for the dismantling, loading, shipping and installation at the final destination. The buyer will usually have to finance the shipping and he will receivethe machine soon after the payment.
The seller expects to sell at the best price without much hassle
We talked about the buyer, but without sellers, there are no buyers. Let’s give the floor to them.
The seller, for any reason, such as his company modernization, or for some debts recovery will need some cash flow in order to continue his activities. What is the usual path to sell to the best price without hassling too much ?
- He will list his machine on several websites as Exapro as he knows it will be free for him and without exclusivity. The seller will create an offer with pictures, technical data, physical data and the price he wishes to get for the machine.
- Exapro finds some potential buyers for him, after being sure that they are serious, our agent will ask the seller some additional questions about the machine, and its previous use.
- When the Exapro’s agent is sure that the buyer and the seller are on the same page, he will introduce them by putting them in touch for a visit (virtual or not) of the machine.
- After the visit done, the seller will bargain with the buyer. Obviously, the seller will try to protect as much as he can the profit earned from this sale, thanks to the help of the Exapro’s agent, they will find a price pleasing for both of them including the dismantling process and the transportation.
- Finally, after payment reception, including Exapro’s commission, the seller sends the machine in accordance with the contract terms.
The Win-Win way of negotiating:
A win-win situation, as the name suggests, is a situation where after bargaining, negotiating and finally agreeing, both parties (seller and buyer) are going back home happy, both having a good price and success in their negotiation. The win-win bargaining way relies on three main biases defined below.
1. The first one is the outcome expectation.
Whether they are sellers or buyers, parties come to negotiation with an overall idea of what they expect, their reserved price, the time they are willing to spend for the process… Sometimes the parties need to get their money fast so they will try to rush the deal’s signature, which is not a good idea. They will both end the deal with a signature for sure, but at what price ? Will they both be happy ?
Exapro will evaluate the price of every product according to several criteria and offer the most accurate price for displaying it to the biggest number of people. This way the negotiation will not take too long and will be as accurate as possible. With this third party analysis, buyers and sellers of second hand machinery will be sure that their expectations in terms of price are justified, and not a trick that is playing the other party.
Coming to a negotiation process with expectations is important because it will help keep an objective and help to not get lost with time wasting arguments about some criterias that do not have that much importance.
Both parties in a bargaining process have expectations before coming to the bargaining process, but when the deal comes to an end, they now have different perceptions regarding the outcomes.
2. Another state of mind can be related to the perception of the outcome.
A really common point that Buyers and sellers share is the fact that they aim for the same thing, earning money. By selling a machine in order to increase their cash flow, to free some space, to adapt their production capability to a new demand, or just upgrading their industrial park, sellers want their company to be profitable.
It is the same with buyers, whether it be for upgrading their production capability, replacing an ageing machine, launching a new production line… They also aim at being profitable.
Profitability can be quantified but it also can be relative. It is all about perception, you can perceive something one way and others in another way, that is what makes us different from each other, that is also why we bargain about things such as cars, used machines… Because we can’t agree on a price if we don’t have the same value perception. There are a lot of biases who change the perception we have from the world surrounding us. Regarding outcome perception there is one we know well.
This biaise is called Social Utility, an example worth thousand explanations here is an example so:
“Let’s imagine a machine, market priced at 30.000€, the seller wants it for a minimum price of 25.000€, the buyer is ready to pay at maximum 35.000€. After bargaining they agreed on a good 31.000€. The buyer is happy he saved 4.000€, now tell him, the seller made 6.000€ more than what he expected. The buyer will be disappointed because he did not get as much profit as the seller. He will feel fooled.”
Sadly, we all experienced this feeling of frustration, enough to forget how happy we were before knowing we did not make enough out of the deal.
3. Negotiation experience is key for the best Win-Win negotiation approach.
An easy question will be, do you prefer to be told the truth or not be told anything ?
In a negotiation process, even if a deal does not really fit your best expectations, both parties will be happy to go back home after work and know that they have told the truth. On this point we all agree. Maybe the initial offer was not fair, maybe one of the party was not transparent enough about his motivations…
Exapro is working as an interface between people, for the language differences, for unifying the different expectations. Also for the fact that sometimes it is difficult to remember that in the other negotiating camp there are people with feelings. We help our partners separate the person from the issue. With intermediaries, you can avoid as much as possible these kind of unpleasant feelings. We try our best having the most information about both parties and display them when needed.
Moreover, with intermediaries you escape what is called by Fisher, Ury and Patton “the trap of action/reaction”. Where the defender dug himself in his idea and position. Where the bargainer will be only criticising the defender, not trying to make concessions as the other is not offering any and vice-versa.
A new Win-Win way of negotiating
The compromise… We all already made compromises, you want to eat Chinese, your friend American. In order to please everyone you go eat the main dish at a Chinese restaurant, the dessert at an American restaurant. No one is fully happy, no one is fully sad…
This is why compromising is not the best way to negotiate. In order to lead a successful negotiation without forcing yourself to use the compromise sinuous path, here are three principles that will help you sign the deal you want.
1. Take control of your intuitions. Never assume anything, for example :
“You can buy a bottle of water and an apple for 1.80€, the bottle of water is 1€ more expensive than the apple, how much is the apple ?”
If your first thought was 80cents you are wrong… the bottle of water is 1.40€ and the apple is 40cents. It is why intuition is always the best solution. In order to get a good answer, you need to use Time, Motivation and Energy. Without this you will just assume things. In negotiation it is the same. You have to be sure about what you think, instinct is really useful and important but it is sadly not everything.
To succeed in a negotiation process, you have to analyse what is the offer and the demand. There is no logical reason you can guess what is in the mind of the other party without taking time to think about it. You need to spend energy into your reflection and of course willing to by using motivation.
2. The second point would be changing a will to convince into a will to understand.
Trying to convince in negotiation is complete nonsense, of course, it is not impossible to get a signed deal using convincing techniques as much as a broken clock gives the exact time twice a day. The good question to ask yourself if the deal is made is “at what cost ?”.
According to this bargaining trend, trying to understand the other party will bring greater benefits in the long run and in the end. The original definition of negotiation is know as “how to make the other freely agree on my offer with his own mind path”. It is still true, and it is important to remember that, in a negotiation there are two parties. And you never know… maybe one day you will need the other party for another business reason.
3. Finally, our last advice will be to try to increase the other party.
In order to reach this third and last key for a successful negotiation, you will have to question the other party, find what are the reasons for such an offer. Maybe there is a need behind the price, maybe a history. By knowing it, you will be much more able to understand the other party.
You will also have to understand what are his motivations, what are his personal interests, will it be a commission for the seller if he can sell it, does he have an objective to reach at the end of the month?
Is the price too high for the buyer ? Is the price too low for the seller ? No one wants to change the price, no compromises ?
Don’t worry there are a lot of cards to play, the game is still going on.
Offer advantages that are not financial, for example, you are the seller, your reserve price is 15.000€, the buyer will not go more than 14.000€, offer to train him about the machine..
You are the buyer, you want to buy the machine, the seller will not say yes to your price, you know that he is bad in supply chain and you are good, offer him to form his team.
The idea is that by increasing the capability of the other party in some domain you show that you really want to do well. And it will deblock the situation.
Exapro will help you make your offer, we will help you by giving more visibility, we will help you by qualifying contacts, we will help you decide a good price, and in some other ways again.
But in the end there is only one person who can make the deal, understand the other party, put some effort into it, do his best in order to be honest and fair, and this person, this is you.