Reserve Price
Have you ever bought or sold anything on eBay, the online auction site? If you have, you’ve encountered the term reserve price, which is the lowest price the seller will accept for an item—it is the dollar amount below which the seller will walk away from any deal (or the amount above which the bidder will not pay). Naturally, that price is not disclosed to bidders. Every negotiator should determine his or her reserve price in advance of any negotiation. Consider this example:
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Oscar and Janis are listing their business for sale with a business broker. As part of their discussions with the broker, they say, “Based on your assessment of the market and the appraised value of our business, we’d like you to list it at $795,000. However, ... |
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