Using the Lowball Tactic when Negotiating

The buyer uses the lowball tactic to start the negotiation with an exceptionally low offer. They do so in an effort to set the anchor point in their favor, whereby creating the tone for the negotiation. You can validate your bid by explaining why it is so low.

Be careful to do your research beforehand so that you are aware of what the true market value is for the product, or service, you are seeking to buy. If you do not, and you offer is insultingly low, the seller may walk away from the transaction without further negotiation. An extremely low offer can possibly damage trust and hinder future negotiations.

Example

My husband and I often disagree on where and how to spend money. I place a lot of importance on gift-giving, and he thinks we need to pay bills first!

We recently celebrated our daughter’s first birthday and I felt it was important to surprise her with wonderful new toys! My husband, on the other hand, took one look in the room that is all ready over –flowing with her playthings and said she had enough.

I made the mistake of asking him what he thinks we should spend for gifts. He came back with a lowball figure of $30. I said, NO WAY, that is how much I would spend on someone else’s child! She is our first daughter after all. Because he was to first to set the anchor point, we ended up more on his side of the spending spectrum. I have to admit, though, that it turned out to be more than enough.