Future Of Furniture: Thank you for meeting with us today. We are excited to discuss a possible business partnership between our two companies. We’d like you to become our main supplier of recycled plastic materials.
Recyclers Of Plastic LLC: Thank you for taking the time to meet with us! Let me just confirm what we understood from our previous email exchange: You are looking for a long-term deal, is that correct?
Future Of Furniture: Yes, we are looking for a long-term agreement that would benefit both our companies. We’d like to be able to purchase large quantities of recycled plastic materials at a discounted rate. This will help us reduce costs while expanding our offerings. And with our expansion plans, we will be a great long-term client for you.
Recyclers Of Plastic LLC: That does sound like a good opportunity. Let's discuss the details and see if we can reach an agreement. Just letting you know, we have prepared some notes regarding what we consider the BPA, the ZOPA, as well as our BATNA. We are open to reviewing our demands if you are also flexible to compromise. We have no interest in finding ourselves in a deadlock and wasting our time.
Future Of Furniture: It’s great to hear that you come prepared! We have done the same. As I said, we’d like to come to a consensus that will benefit both our companies. Also, we have big plans for the upcoming year, so we’d like to close this deal as soon as possible.
Recyclers Of Plastic LLC: Exciting! We look forward to being a part of your journey from this point onward. Let’s dive right in. We have prepared Multiple Economically Equivalent Proposals for you which I’d now like to present. They are as follows:
Proposal 1: We will provide your company with premium recycled plastic materials at a price of $375 per metric ton. The agreement will be for a period of five years, with periodic reviews to ensure the partnership is still mutually beneficial.
Proposal 2: We will provide your company with our highest quality recycled plastic materials at a price of $425 per metric ton. This is a grade higher than our premium materials. The agreement will also be for a period of five years, also with periodic reviews to ensure an ongoing mutually beneficial partnership. Additionally, we will provide a 10% discount on the total purchase price with every additional 50 metric tons purchased.
Proposal 3: We will provide your company with premium recycled plastic materials at a price of $350 per metric ton. The agreement will be for a period of three years, with periodic reviews of the partnership. We will provide a 5% discount on the total purchase price and in exchange receive a 7% commission for any additional business generated by your company.
I’d like to point out that these are all very good deals that we have tailor-made for you with a long-term partnership in mind. We are open to bargaining, but will not make too many concessions, as we believe all of these proposals to be more than fair.
Future Of Furniture: Thank you for presenting these offers; we appreciate the effort you have put into them. We understand the value of the materials you have offered and we’re excited about the potential of a long-term partnership. Keeping in mind everything that we have researched and prepared, we believe $200 per metric ton is what we are prepared to pay for the premium recycled plastic materials. We are aware that this is a lower price than you are asking for, so we are willing to offer a 12% commission for any additional business generated by our company. We are also willing to commit to a minimum order quantity of 500 metric tons. What do you think?
Recyclers Of Plastic LLC: That’s ridiculous, we can't accept that offer! The market price for these materials is much higher and we believe $400 per metric ton is a fair price given the quality of our materials.
Future Of Furniture: We understand that our counter offer is lower than expected, but let’s please stay professional, we’d like to avoid an escalation. We understand your position, but $400 per metric ton seems a bit high-balled to us. We can only offer $250 per metric ton plus 12% commission. We are hoping to establish a long-term relationship with you and believe that our offer takes into consideration not only the current market price, but also the value of future collaboration.
Recyclers Of Plastic LLC: Talk about high-balling; you are low-balling! We think $350 per metric ton plus commission is a more than fair price. It takes into account the quality of our materials, our position as market leader, as well as healthy future collaboration. Your company is not yet very established, which is frankly why we are hesitant to rely too heavily on commission as payment. This is our walkaway. Take it or leave it.
Future Of Furniture: We understand your position but, forgive me, it seems a bit like you are using your established market position as leverage to give us an ultimatum. $350 per metric ton is unfortunately still too high for us, as we are still a growing company. We can offer $300 per metric ton, and are prepared to raise commission to 15%, which we consider to be quite high. Is this acceptable to you?
Recyclers Of Plastic LLC: We must admit that this is far from our MDO. But we do empathize with your situation of being new in the game and we do see potential in your company. We will take some time to consider your proposal and get back to you via email. We may need to enter another round of negotiations.
Future Of Furniture: Alright, we look forward to hearing from you soon. We are still optimistic that a partnership between our companies will benefit us both, so we would really like to come to an agreement. Thank you again for meeting with us. Have a great day!
Recyclers Of Plastic LLC: Same to you!
- You are one of the representatives of Future Of Furniture. Imagine that you are preparing for the negotiations that you read in the Reading Activity. Define your company’s MDO, BPA, ZOPA, and BATNA. Additionally, identify your company’s demands and concessions based on what you know from the Reading Activity.
- You are one of the representatives of Recyclers Of Plastic LLC. Imagine that you are preparing for the next round of negotiations with Future Of Furniture. Define your company’s new MDO, BPA, ZOPA, and BATNA based on the information you gained through the last meeting (Reading Activity). Identify which demands your company is most to least flexible on, and what other concessions you can offer in order to close the deal.
- Imagine you are trying to convince your university professor to give you a better grade on a paper. Treat it like a negotiation and write a compelling proposal that factors in your demands (better grade) and your concessions (what you are prepared to offer in exchange).