It Ought To Be
The Minimum Wage Law,
established by the Fair Labor Standards Act of 1938, guarantees a
minimum wage, under law, for most workers. I’m sure we can all
agree that the concept of guaranteeing all workers a reasonable
minimum wage commensurate with their efforts is one that should be
protected by law.
You might be unaware,
however, that the FSLA specifically excludes outside sales people
from this protection afforded other workers. In other words, it is
perfectly legal in this country for another person – in this case, a
buyer - to take your income away from you.
That’s exactly what
happens if you lack effective negotiation skills. A customer balks
at the price that they are quoted for goods or services, and you
respond by negotiating your price – and your corresponding
commission – downward. So, in effect, by agreeing to a lower price
without a corresponding drop in value, you willfully agree to take a
This practice, of
course, isn’t illegal. However, it should be. Nobody that you do
business with should have the ability to take your hard-earned
income. As a business person providing goods and/or services, you
invest a tremendous amount of time, effort and expertise to provide
your client with value. I can’t remember the last time my dentist,
florist, trash collector, veterinarian, accountant, auto repairman,
or lawyer haggled over the fees for their services. In fact, I am
not aware of any other service-based occupation other than sales
where a person’s income is expected to be negotiable.
So why should yours
be? I regret to inform you that it is highly unlikely that the
government is going to intervene in this matter on your behalf.
(Part of the problem is that you are in one of the highest-income
occupations). Since you aren’t eligible for a hand-out, you must
take steps to protect what is rightfully yours. This means that your
policy on negotiating is simple and straightforward: you do not
reduce your price without a corresponding decrease in value. If
you were to recognize the act of negotiating on price for what it is
– a cut in your compensation – you might stop doing it. I can assure
you that you would then add thousands of dollars to your income in
This isn’t as
difficult to do as you might think. However, you need to learn how
to handle price objections properly when confronted with them.
First of all, most
sales people assume that, when a buyer wants to negotiate, they are
beginning the negotiation process in a position of weakness. This is
usually not the case. Most of the time, your buyer is on little
more than a “fishing expedition” when they ask you to lower your
price. Furthermore, if the following two conditions are in place,
you, not the buyer, are in a position of strength. These are:
The customer has already decided
that they want to buy from you, and
The customer does not feel that
your asking price is unreasonable.
These two conditions
depend entirely on the premise that you have done a good job of
providing value in your proposal. If that is the
case, and the above two conditions exist, then dropping your price
upon request is a very bad idea, because there is no basis for doing
The next time a
client asks you to lower your fee, or drop your price, take a deep
breath and say, “I’m sorry, but I can’t do that.” (If reciting this
phrase makes you feel queasy, say it standing in front of a mirror,
repeatedly, until the feeling goes away).
Then explain why:
“Our policy on this issue is that it would be unethical for us to
charge our clients different prices for the same amount of value”.
Believe me, they will understand – because you are absolutely right.
They will also respect you for standing your ground.
Of course, we still
have the issue of a difference between where your buyer is (what
they want to spend) and where you are (what your current price is).
Once you’ve established this by asking, “how far apart are we?” go
back to your initial recommendation and look for ways to alter
the initial solution in a way that serves to get the price to a
point of mutual agreement.
By doing this, you
avoid compromising your margins. In other words, you will be paid
what you are supposed to be paid based on what is being purchased.
If the two conditions discussed earlier are in place – that they
want to buy, and don’t feel your asking price is unreasonable – in
most cases you will end up with a win-win transaction. This
means that the buyer gets a fair and equitable solution at a fair
price, and you were appropriately paid for your time and effort.
that someday it will be illegal for buyers to stick their hand in
your pocket and take your income. In the meantime, you must take the
law into your own hands. Upgrade your negotiating skills and keep
more of what is rightfully yours. After all, you earned it.
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