This page explains how to prepare a negotiating position, a target figure, a walk-away figure and a set of concession options, before joining a call about price, quantity or delivery. This matters because a call prepared for and a call walked into unprepared can reach very different results on the same order.
Sara, the buyer at Northline Apparel, is about to call Delta Garments about Order B, the jeans order, where the factory's FOB quote sits above Northline Apparel's target price. Before the call, she decides what figure she is aiming for, what figure she will not go below, and which concessions she could offer or ask for to close the gap.
Without this skill, a person joins a negotiation call and reacts to whatever is said, often agreeing to the first figure offered or refusing without an alternative in mind. This lesson gives you the method for walking into any call with your own position already decided.
You need: lesson 4.1's rule on confirming a changed commercial term in writing; this lesson prepares the position that is later confirmed that way.
By the end of this lesson you can:
Not covered here: confirming a changed commercial term in writing (lesson 1), responding to a request that cannot be met as stated (lesson 3), and escalating a stalled decision (lesson 4).
| Term | Meaning |
|---|---|
| Negotiating position | The target figure, walk-away figure and concession options a person prepares before a negotiation, rather than deciding them during the call. |
| Walk-away position | The least favourable figure a person will still accept before ending the negotiation without an agreement. |
| Target figure | The figure a person aims for going into a negotiation, more favourable than the walk-away position. |
| Concession option | Something a person can offer or accept, beyond the headline figure, to help close a gap between two positions. |
| Lead time | The total time from a confirmed order to the goods reaching their destination. |
A negotiating position is prepared before a call, not decided during it. It has three parts: a target figure the person aims for, a walk-away figure below which the person will not go, and a short list of concession options that can help close the gap without moving the headline figure alone. Preparing all three in advance means a person joining the call already knows what a good outcome looks like, what an unacceptable one looks like, and what else is available to offer if the two sides are close but not yet agreed.
*The gap between an opening ask and a target figure is itself a planning number. Knowing it before the call shows how much room concession options need to close.*
What you meet in real life| What can differ | The shapes you meet | Why it matters |
|---|---|---|
| A buyer preparing a position on an export order | Sara sets a target FOB, a walk-away FOB, and concession options such as a longer lead time or a larger order quantity, before calling Delta Garments about Order B, the jeans order. | A buyer with a prepared walk-away figure does not accept a price it cannot support once landed cost and markup are worked through. |
| A factory preparing a position on the same order | Delta Garments sets its own target FOB, its own walk-away FOB below which the order stops covering its cost, and concession options such as simplifying a wash step. | A factory without a walk-away figure risks agreeing to a price that does not cover its own cost once the order is in production. |
| A domestic Make to Stock reorder | Cedar & Co. prepares a target reorder price and a walk-away price before calling Delta Garments about a repeat style, informed by its own forecast. | The three-part position applies the same way even when no letter of credit or export shipping terms are involved. |
| A hybrid order combining forecast and made-to-order volume | The buyer prepares one position for the forecast-based base quantity and a separate one for the made-to-order top-up, since each part carries different risk. | Treating a hybrid order as one single position can hide that the top-up portion has less room to move than the forecast base. |
| A quantity negotiation instead of a price negotiation | The same three parts apply to a minimum order quantity discussion: a target quantity, a walk-away quantity, and concession options like a longer lead time in exchange for a smaller run. | The method is the same whether the number being negotiated is a price, a quantity or a date. |
| A delivery-date negotiation | A factory sets a target ship date, a walk-away ship date it cannot go beyond without missing the buyer's own shop date, and concession options like partial shipment. | Knowing the true walk-away ship date in advance stops a factory agreeing to a date it privately knows it cannot meet. |
The buyer target FOB for Order B, the jeans order, is USD 9.80 per piece for 3,000 pieces, paid by letter of credit. Delta Garments' opening quote came in at USD 10.10 per piece. Before calling Delta Garments, Sara sets her walk-away figure at USD 10.00 per piece, the highest price Northline Apparel's own landed-cost and markup plan can still absorb, and prepares two concession options: agreeing to a slightly longer lead time, and confirming a repeat order for the same style next season.
Using the workbook's own formulas, the range between target and walk-away figures is calculated per piece and across the whole order, showing how much total room the concession options need to cover.
A common mistake is joining a negotiation call with only a target figure in mind, and no prepared walk-away figure to stop at. Without a walk-away figure, a person under pressure during the call can agree to a figure their own numbers do not actually support, discovering only afterward that the agreed price, quantity or date does not work.
This lesson is about deciding, before a call, what you want, what you will not go below, and what else you could offer to help close a gap. Write down a figure you are aiming for and a figure you will not go past, before anyone starts talking. Also list a couple of other things you could offer or ask for, beyond the main number, in case the gap needs closing that way instead. Deciding all of this beforehand means the call itself is about finding an agreement inside a range you already know works for you, not about being talked into something you have not thought through.
Sara joins the call with her prepared position: target USD 9.80, walk-away USD 10.00, and two concession options ready.
The note Sara is working from:
Should Sara accept USD 9.95 immediately, since it is inside her prepared range?
No. Sara should try her prepared concession options before accepting, since USD 9.95 is above her target figure, not at it.
First fact. USD 9.95 sits between Sara's target of USD 9.80 and her walk-away figure of USD 10.00, so it is acceptable but still USD 0.15 above the target she is aiming for.
Second fact. Sara has two concession options prepared and unused; offering a repeat order next season, in exchange for moving closer to USD 9.80, costs Northline Apparel nothing it was not already likely to do.
Sara should offer one concession before accepting, and only accept immediately if Delta Garments will not move further.
Accepting the first offer inside a prepared range, without testing a prepared concession, risks leaving USD 0.15 per piece unclaimed on Order B, the jeans order, the gap between the USD 9.95 offer and Sara's USD 9.80 target. Across 3,000 pieces, that is USD 450 of room that a single, low-cost concession, like confirming a repeat order Northline Apparel likely intended anyway, might have closed at no real cost to either side.
Open the Negotiation preparation worksheet. Use the "Position" sheet to enter a target figure, a walk-away figure and concession-option values before any call, and let the sheet calculate the room between target and walk-away automatically. The illustrative example shows Order B's (the jeans order's) USD 0.20 per piece room and USD 600 total room across the order. Download link: `templates/T11-C04-negotiation-preparation-worksheet.xlsx`.
1. Why does a negotiating position need a walk-away figure, not only a target figure?
2. On a domestic Make to Stock reorder of 800 pieces, Cedar & Co. sets a target reorder price and a walk-away price before calling Delta Garments. Does the three-part method still apply, even with no letter of credit involved?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Negotiating position | موقف تفاوضي | Position de négociation | Müzakere pozisyonu | The target figure, walk-away figure and concession options a person prepares before a negotiation, rather than deciding them during the call. |
| Walk-away position | موقف الانسحاب | Position de repli | Çekilme pozisyonu | The least favourable figure a person will still accept before ending the negotiation without an agreement. |
| Target figure | الرقم المستهدف | Chiffre cible | Hedef rakam | The figure a person aims for going into a negotiation, more favourable than the walk-away position. |
| Concession option | خيار التنازل | Option de concession | Taviz seçeneği | Something a person can offer or accept, beyond the headline figure, to help close a gap between two positions. |
| Lead time | الوقت الإجمالي للتنفيذ | Délai de production | Teslim süresi | The total time from a confirmed order to the goods reaching their destination. |
You can now prepare your own negotiating position before a call. The next lesson teaches how to respond when the other side asks for something that cannot be met exactly as they stated it. Back to the course map