Q & A Table of Contents
Our Oral Agreement Isn’t Going Anywhere — But It Is Costing Me Money
From: Ravi, London, England
Question: I am an organic importer and exporter and am currently negotiating contract terms and conditions with a company in India. I will be importing organic herbal tea from this company.
I have already invested a fair amount of money in setting up the company — as as well getting the organic certification and also approval from trading standard people as far the labels are concerned. Everything has been approved and I am ready to trade.
Now I received this agreement from the company in India. I am not happy with their terms and I have written back to them with my amendments and suggestions. I am not getting though to this guy with whom I am negotiating these terms; it is very difficult to get him to understand.
I am losing money each day by paying for empty warehouse and other bills. I did all this on the good understanding with the company hoping they will appreciate the investment I have made in marketing their products in UK. I need your advise how I can move forward or get some sense out of him.
Response: You actually have two different negotiation tracks you should pursue. The most immediate is to negotiate with the owner of your warehouse — and anyone else to whom you are currently paying money on the tea import business. Your objective should be to find a way to reduce or even temporarily eliminate your financial obligations until there is tea to fill the warehouse and, ideally, revenues coming in. If you approach your landlord with the truth — that unless you get some relief, you will be broke within a certain time and your landlord’s source of revenue will dry up — perhaps she or he will be reasonable and give you some breathing space.
As regards your Indian supplier — you need to figure out what alternatives you have. If you ask him to take pity on you because you have made a significant investment based on his word, you are putting yourself in his hands. He will realize that he can force you to accept a lousy deal because your bank account is withering away. Don’t focus on the bad financial consequences you face if someone with whom you’re negotiating doesn’t make a good deal with you. That will not convince them to be generous.
Think about the Indian supplier’s interests, about the interests of his suppliers, and about the interests of other stakeholders in this situation. The growers from whom he will be buying the tea don’t make money unless the commerce has begun. Perhaps they should be contacted to put pressure on the exporter to make him realize that his hard-headedness is not doing them any favors.
Consider what else the exporter has to gain from concluding a fair deal with you. See if you can validate those assumptions in your communication with him. If your assumptions are accurate, that will give you hints of what may help you convince him to change his approach. If your assumptions are not accurate, the new information you derive from asking open-ended questions (questions that don’t lead to a ‘yes’ or ‘no’ answer) should help you find alternative ways into the decision-making part of his brain.
While this is going on, you would be wise to start searching for alternatives to this exporter. Where else can you get organic herbal tea in India — or other countries? This is called looking for your BATNA, your Best Alternative To a Negotiated Agreement. If you have a strong BATNA, you can walk away from this guy and deal with someone more reasonable.
Don’t tell him he is being unreasonable, that invites greater difficulty rather than more cooperation. Separate yourself from the process and look at the emotional elements involved. How much ‘face’ are you willing to sacrifice for income? Use your emotions as a tool, rather than letting your emotions control you.
Good luck,
Steve
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