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!