How to Negotiate in English Business English Lesson
Hi, I’m Gina.
Welcome to Oxford Online English!
In this lesson, you can learn useful language
for business negotiations.
You’ll learn how to make your position clear,
how to accept or reject the other side’s
proposals, and how to express yourself in
clear, professional-sounding English.
If you haven’t already seen them, I suggest
you watch our videos on chairing and attending
meetings.
Negotiations are also a kind of business meeting,
and the language from those videos will also
help you in these situations.
Don’t forget that you should also visit
our website: Oxford Online English dot com.
You can find many free English lessons, and
also book lessons with one of our professional
teachers if you need more help.
In this lesson, you’ll see a scenario where
I’ll role-play a purchaser for a clothing
wholesaler.
Daniel will role-play the manufacturer’s
representative, and we’ll be negotiating
a deal.
Let’s look at the first part.
So, let’s get started.
I’ve read your proposals, and I understand
you’re looking for unbranded clothing in
a variety of styles.
That’s right.
Meaning: t-shirts, tank tops, hoodies, zip-up
tops, and long-sleeved tees, right?
Correct.
Alright.
So, my first question is: what kind of volumes
are we looking at?
Well, we’re a reseller, so we rebrand the
clothing and sell it on to retailers.
We can potentially move quite a lot of product,
but I suggest starting small and scaling up
later.
We’re thinking of starting with around 500
to 1500 units per SKU, with more in popular
sizes and colours.
And that would be per-month, or…?
We’d prefer to keep things flexible to begin
with.
What do you have in mind exactly?
I’m not against flexibility, but logistics
require a certain amount of forward planning.
Of course!
Let me ask you something: what’s the situation
regarding production and delivery?
How long does it take you to process orders?
It’s not completely fixed, but around two
weeks.
Larger orders can take more time.
That’s fine, so here’s our situation:
we don’t have a lot of warehousing space.
That means we can’t commit to a fixed schedule
for deliveries.
Instead, we’ll have to make orders once
our stock level is low enough and we have
the space.
Hmm…
That’s possible.
One thing you should know: we won’t be able
to offer the lowest prices if we can’t be
sure of your delivery schedule in advance.
I understand.
And for one product category, for example
short-sleeved t-shirts, how many variations
of size and colour do you need?
We need all the common sizes, from XS to XXL,
each in 16 colours.
At the beginning of a negotiation, both sides
need to make their position clear.
In the dialogue, you saw several ways to do
this.
Can you remember any?
First, you can state what you want directly,
like this: ‘I suggest starting small and
scaling up later.'
‘We’re thinking of starting with around
500 units per SKU.’
‘We’d prefer to keep things flexible to
begin with.’
You can use this language in other ways.
For example: ‘I suggest a six-month contract
to begin with.’
‘We’re thinking of opening new branches
in 15 cities.’
‘We’d prefer to do the marketing work
ourselves.’
You can also ask the other side specific questions
to find out what they need.
In the dialogue, you heard: ‘What kind of
volumes are we looking at?’
‘What’s the situation regarding production
and delivery?’
Again, you could use these in different situations.
For example: ‘What kind of schedule are
we looking at?’
‘What’s the situation regarding minimum
order volume?’
Finally, you can also use open-ended questions
to check information, or to get more information
from the other side, like this: ‘What do
you have in mind exactly?’
‘And that would be per-month, or…?’
Making a question by leaving a sentence unfinished,
with the word ‘or’ at the end, is conversational.
You wouldn’t use it in writing.
However, in spoken English, it’s an effective
way of showing that you need more information,
and that you want the other person to finish
the idea.
Very often, negotiations depend on setting
conditions.
What you can offer depends on what the other
side can do.
Let’s see how you can talk about this.
OK, so if we’re ordering around 100,000
units at one time, what kind of per-unit pricing
can you offer?
That depends if you can commit to a regular
delivery schedule or not.
Assuming that you need a flexible schedule,
we could offer six dollars per unit for tees
and tank tops, and fifteen for hoodies and
zip-ups.
If we need higher volumes, would you be able
to go lower?
Possibly, but the schedule is more important
to us.
Supposing you could commit to a minimum monthly
volume, we could go down to five-fifty and
fourteen.
If we commit to a minimum volume over a six-month
period, but with a flexible delivery schedule,
could you offer us the same price?
As long as there were some limitations on
the delivery timing, I think that would be
acceptable.
The easiest way to express conditions is with
if-sentences.
For example: ‘If we’re ordering around
100,000 units at one time, what kind of per-unit
pricing can you offer?’
If we need higher volumes, would you be able
to go lower?’
If we commit to a minimum volume over a six-month
period, but with a flexible delivery schedule,
could you offer us the same price?’
If-sentences can be used in many ways; it’s
common to use the modal verbs ‘will’ ‘can’
‘could’ or ‘would’ on the other side
of the sentence.
Let’s make some more examples:
‘If we commit to a longer contract, can
you offer us a better price?’
‘If we agreed to pay the licensing costs,
would that make the deal work for you?’
However, there are other ways to talk about
conditions.
Can you remember any from the dialogue?
You heard: ‘Assuming that you need a flexible
schedule, we could offer six dollars per unit
for tees and tank tops…’
‘Supposing you could commit to a minimum
monthly volume, we could go down to five-fifty…’
‘As long as there were some limitations
on the delivery timing, I think that would
be acceptable.’
All of these have the same basic meaning,
which is like an if-sentence, although ‘assuming…’
and ‘supposing…’ are used when you want
to suggest something which is more speculative.
Using these shows that you’re talking about
possibilities, rather than very firm suggestions
which need to be accepted or rejected immediately.
‘As long as…’ has the opposite meaning;
it sets a very firm condition.
If you say, ‘As long as there were some
limitations on the delivery timing, I think
that would be acceptable’, you mean that
these limitations are necessary.
If you can reach an agreement, then that’s
great!
But, what if there’s a sticking point?
Let’s work out the details about delivery
and scheduling.
For us to make this work at the lower price,
we’d need to have monthly deliveries, but
we could let you adjust the size of the order
to some extent, so that you can manage your
warehousing space.
I’ll come right out and say that’s not
going to work for us.
Flexibility is essential for us; our whole
model is based on just-in-time logistics,
so there’s no way around this.
Well, in that case, we won’t be able to
offer you the lower price.
I have no problem with flexible deliveries
as such, but we can’t offer our best prices
without a regular commitment on your part.
I’m sorry to be blunt, but this seems a
little short-sighted on your part.
We’re potentially looking to order millions
of units each year.
Flexible delivery doesn’t mean that we won’t
make orders regularly, it just means that
we need to control the timing and quantities.
I understand completely, but you need to realise
that we have our own logistics issues to deal
with.
If we don’t know exactly when and how big
an order will be, that creates costs for us.
We’re not willing to absorb those costs;
I feel that if you need this flexibility,
then you should be willing to pay for it.
I’m sorry but I have to draw a line here.
It’s simply too risky for us to give you
what you’re asking.
It seems like we’ve reached a bit of an
impasse.
Shall we take a five-minute break?
Good idea.
If the other side makes a proposal which you
can’t accept, you can tell them directly,
like this: ‘We won’t be able to offer
you the lower price.’
‘We can’t offer our best prices without
a regular commitment on your part.’
‘We’re not willing to absorb those costs.’
This language is direct, but it’s often
better to be direct if something is important.
You can use this language in other ways.
For example: ‘We won’t be able to finish
the work in such a short space of time.’
‘We can’t sign a contract if you can’t
guarantee a delivery date.’
‘We’re not willing to share this technology
for free.’
You can also show that you disagree by using
phrases like: ‘I’ll come right out and
say that’s not going to work for us.’
‘There’s no way around this.’
‘I’m sorry but I have to draw a line here.’
These are general, so you can use them to
react to any suggestion which you strongly
disagree with.
It’s a good idea when negotiating to keep
things calm and avoid direct criticisms.
If things get confrontational, you could give
everyone space to cool off by saying: ‘Shall
we take a five-minute break?’
Next, let’s see how you can resolve disagreements
in a productive way.
Right, I’ve spoken to a few people and I
have a proposal which I hope can make this
work for everyone.
Sounds good!
What’s your idea?
The problem for us is that if you don’t
maintain a certain monthly volume, we might
lose money at the lower prices, which obviously
we can’t do.
Sure.
So, here’s my solution: we have an annual
contract with a flexible delivery schedule,
but with a minimum volume per-quarter.
At the end of the quarter, if you haven’t
met the volume requirements, you’re liable
for the difference in price between your orders
and the minimum.
I like the basic idea, but earlier I suggested
a six-month contract, and this sounds like
a much worse deal for us.
Well, I want to make this work, but the lower
prices only work if we can guarantee orders
over a full year.
I’ll make another offer: you pay five seventy-five
for tees and tank tops and fourteen-fifty
for hoodies and zip-up tops.
Then, you can have a six-month contract, with
minimum volume per-quarter.
That’s a good offer, but can we have the
minimum over the whole period, just to have
more flexibility?
I can’t make more concessions that I already
have, I’m afraid.
I think this is a good compromise which allows
us to move forwards.
I’ll need to call my team to confirm, but
I think this should be feasible.
Great!
When you’ve reached an impasse, you need
to make suggestions so that you can move forward.
To introduce a new idea, you heard this language
from the dialogue: ‘I have a proposal which
I hope can make this work for everyone.’
‘Here’s my solution: …’
‘I’ll make another offer…’
You can also ask the other side to suggest
their ideas, like this: ‘What’s your idea?’
‘What would you suggest?’
Then, you need to react to the other side’s
ideas.
If you agree, you could say something like,
‘That’s a good offer.’
‘I think this should be feasible.’
‘Feasible’ has a similar meaning to ‘possible’
or ‘practical’.
If something is ‘feasible’, it means that
you can do it, and it won’t be difficult
or problematic.
Hopefully, at this point you’ve managed
to reach an agreement!
If so, what else do you need to do?
Let’s go through the main points: you’ll
order a minimum of 500,000 units in a six-month
period, at a price of five seventy-five for
short-sleeved t-shirts, long-sleeved t-shirts
and tank tops, and fourteen-fifty for hoodies
and zip-up tops.
That’s right.
Regarding delivery, orders are flexible, but
you commit to giving us three weeks’ notice
for each order.
Yes.
We still need to settle the exact details
of sizes, colours, and so on.
Of course, but from our point of view, that
isn’t an issue.
Production costs are almost identical.
OK, so we can work that out later.
There’s also the matter of penalties in
case you don’t meet your minimum volume
over the course of the contract…
I thought we agreed that we would simply pay
the unit cost for the shortfall?
Yes, but which unit cost?
We need to agree separate minimums for the
t-shirts and tank tops, and for the heavier
items.
True, but I don’t see that being a problem.
No, me neither.
So, we’ll put this in writing and send you
a provisional agreement within the next few
days.
If everything looks OK, we can work on getting
a contract drawn up.
Perfect!
Once you’ve reached an agreement, you should
summarise what you’ve agreed, and then outline
the next steps which you both need to take.
You might also mention points which need to
be discussed later.
To summarise what you’ve agreed, you could
say, ‘Let’s go through the main points:
…’
‘Regarding delivery, …’
You can use ‘regarding’ to introduce a
new idea.
So, you could say, ‘Regarding the pricing…’
‘Regarding the timetable …’
…and so on.
If there’s something you need to talk about
later, you could say, ‘We still need to
settle the exact details of…’
‘There’s also the matter of…’
These are flexible phrases, which you can
use to talk about many points, like this:
‘We still need to settle the exact details
of the training programme’
‘There’s also the matter of integration
with our existing software systems.’
Finally, you need to agree on the next steps.
You might say something like, ‘We’ll put
this in writing.’
‘We’ll send you a provisional agreement.’
‘We can work on getting a contract drawn
up.’
‘Draw up’ is a phrasal verb which means
‘write’, but it’s only used for contracts
and other legal documents.
Do you have any interesting experiences or
tips relating to business negotiations?
We’d love to hear from you, so please share
your ideas in the comments!
Thanks for watching!
See you next time!