08.10.

23, 23:31 5 Basic Rules for Effective International Negotiations

5 Basic Rules for Effective

International Negotiations
On: October 14, 2019 | Becky | 3 min.
By: DeStigter read

It happens more than I

would like to admit. A company tells me that they
have downsized their international customer base or
pulled out of international markets altogether.
International markets are just not profitable, they say.

Upon closer investigation, a common issue is the lack

of international negotiation skills.

While some of the savviest companies attend

extensive training in this area, here are five rules that
can help address some of the biggest issues.

Rule #1: Do Your

Homework
My fellow Americans are notorious for shooting from
the hip or improvisational negotiations in other parts
of the world. It means that we typically do little to no
research on our partners or clients, on the local
https://www.shippingsolutions.com/blog/five-basic-rules-for-effective-international-negotiations 1/6
08.10.23, 23:31 5 Basic Rules for Effective International Negotiations

business norms, or on the industry in country before

entering into negotiations.

In most parts of the world, your counterparts will

have done a great deal of research about you, your
company, your culture, and anything else relevant to
maximizing negotiation success. Make sure you're
doing the same thing.

Rule #2: Prepare

Counteroffers
A client recently told me that their staff normally
approach international business negotiations as a
series of concessions and price discounting. It is no
wonder few international deals were profitable!

Instead, know what options you have to counteroffer.

For instance, a suggested lower price could be
countered with a reduced scope or work or a less-
expensive product. This quickly reveals what the other
side values—were they looking to get a better price
or do they truly have less money to spend?

Sometimes a marketing testimonial or introductions

in your home country can be exchanged in the

https://www.shippingsolutions.com/blog/five-basic-rules-for-effective-international-negotiations 2/6
08.10.23, 23:31 5 Basic Rules for Effective International Negotiations

negotiation instead of merely playing tug-o-war with

the final contract price. Be ready with all available
options.

Download the free whitepaper: Developing

Your Export Strategy: 5 Things Every
Exporter Should Know

Rule #3: Assign Roles to

Team Members
International negotiations are not the same as those
in the American business culture. Most overseas
cultures expect more structure in negotiations—
introductions of the negotiation teams, an agenda, a
spokesperson for each team, etc. While a team needs
to know the cultural rules expected by the other side,
there are some general guidelines that apply most
places.

First, assign a leader who sits in the middle of your

team. Second, never openly contradict something
said by another person from your side. Third, if you
https://www.shippingsolutions.com/blog/five-basic-rules-for-effective-international-negotiations 3/6
08.10.23, 23:31 5 Basic Rules for Effective International Negotiations

need time to react to something that has been

introduced into the negotiation, call for a break and
then discuss it as a team.

Finally, try to match the titles of the other team. If

they are bringing a technical resource, then you
should as well. If their CEO will be present, then if
possible bring your CEO too. All of this will help
negotiations go smoother.

Rule #4: Start with the

End in Mind
Anyone negotiating needs to know two things:

1. The price range and other terms that you can

accept on behalf of your company.

2. That you need to be able to walk away from a

negotiation if the terms are not acceptable and
won't move into the right range.

With this in mind, it is important to know the normal

range of price movement that the other side will
expect. In some countries, price normally is
negotiated down more than 50%. That means that
the initial price needs to be marked up accordingly so
https://www.shippingsolutions.com/blog/five-basic-rules-for-effective-international-negotiations 4/6
08.10.23, 23:31 5 Basic Rules for Effective International Negotiations

that it can drop down and still stay in the acceptable

range.

For any company still pricing products and services

based on cost plus mark-up, this is a good time to
abandon this outdated pricing strategy that works
heavily against international sales.

Rule #5: Negotiations Are

Ongoing
Americans and their counterparts (such as the Swiss,
British, Germans and Canadians) that base business
deals on contracts, sign the contract and then
promptly file it away as a done deal. This is rarely the
case. An international business relationship needs to
be evolving to match the changes in external forces.

When your Chinese supplier comes back asking for

better terms, it is a chance to negotiate better terms
for your side as well. Likewise, when something in the
relationship is becoming unfavorable for your
company, you can approach the other side to
renegotiate in order to turn the situation around.

https://www.shippingsolutions.com/blog/five-basic-rules-for-effective-international-negotiations 5/6
08.10.23, 23:31 5 Basic Rules for Effective International Negotiations

This article was first published in January 2014 and

has been updated to include current information, links
and formatting.

https://www.shippingsolutions.com/blog/five-basic-rules-for-effective-international-negotiations 6/6