Background
A few months ago, I bought a desktop computer with parts assembled by myself for gaming. Before long, I decided to sell it and purchase a new laptop to satisfy my working needs, as I did not think I would have much time to play computer games anyway. I am planning to work in IT industry in the future, so the laptop I need has to be able to run different kinds of professional software. These tasks require a good CPU and a sizable RAM. I knew the new laptop would be expensive, and I had to sell my fancy gaming desktop to pay for it.
Research
First, I needed to research about what types of laptop could satisfy my requirements and their price range. I focused on a few brands whose professional computer brands are known to be reliable and durable: Dell, Lenovo, and HP. The price range of these computers was from $1500 to $1800.
Secondly, I needed to know how much money my desktop computer was worth. Because it was an assembled computer with valuable configuration inside, I should be able to set a comparatively higher price for it. Alternatively, I could sell the parts of the computer separately if the market prices of the individual components were acceptable.
Below are the price ranges for all the sellable components in the second-hand PC accessories market (Resources: E-bay, Amazon, and Taobao):
CPU: Intel I7 7700 $200-$240
Graphics card: ASUS GTX1080 $800-$960
Motherboard: ASUS ROG CODE $120-$144
Water Cooling: Corsair H110 $80-$96
Power Supplier: Corsair Gold $80-$96
Ram: Corsair 3000kz 8G *2 $160-$192
Total: $1440-$1728
What surprised me was the price of the graphics card. I bought it for only $580. With the increasing demand of Bitcoin mining recently, the price of the my graphics card rose by 30-50%.
Analysis
Analyzing the current situation by using the concepts I learned from this class:
The top priority was the need to get at least $1200 form selling my desktop components or the whole desktop, to pay for my new laptop (I already have $300 at hand). Also, I needed the money as soon as possible.
Secondly, I did not want to sell the whole computer system because I wanted to keep the computer case with my customized wind flow design, on which I spent a lot of time. I also wanted to keep the HDD and SSD as they had already stored a massive amount of valuable data. I had to move the data and clean the storage devices in order to sell them. It would take a lot of time and effort.
As to the BATNA, one of my friends was willing to pay me $1200 for the whole computer system. If I could not get at least total $1200 from selling the components, I would have to sell the desktop to my friend.
The lowest market price in total was $1440, and I believed I had high chance to reach this number based on the market prices. So, $1440 became the target I wanted to achieve during the negotiation with potential buyers.
Also, if I can reach beyond the basic price point, the ideal situation for me would be to sell each component at the highest transaction price in the second-hand market. This way, I could receive as much as 20% more in total from the buyers.
Negotiation opponents:
I posted my items on social media (Facebook, Instagram, and WeChat) to seek for potential buyers. The reason why I did not use eBay was that eBay’s platform was not that negotiation-friendly.
Eventually, there were three buyers asking me for quotes. To make the process of analysis more straightforward, I named the buyers as A, B, and C respectively.
Buyer A only wanted my graphics card, and he was willing to offer $780 for it. Due to the shortage of graphics card in the market, it was nearly impossible to purchase a graphics card at that time. It gave me a considerable advantage in negotiating the price. But I decided not to set the asking price too high and scare buyers away, so I placed $960 as the initial price.
Buyer B was willing to buy all the items I posted as a package. However, he said he could only pay me $1580. There was ZOPA between the best he could offer and my acceptable pricing range: $1200-$1580.
Buyer C wanted to buy the whole package as well, and the price she offered was the highest: $1700. But she said she would only pay $1500 unless I helped her build the desktop system and delivery it to her apartment.
Outcome
Eventually, I made the decision between buyer A and buyer C. Luckily, buyer A was in urgent need of a graphics card, and he agreed to pay $960 right after I told him the asking price. The sellers’ market was clearing playing to my advantage.
As to buyer C, I told her the graphics card had already been sold, but I could help her build a computer with lower cost. We had lots of conversations during the negotiation. I learned that what she wanted the computer only for ordinary daily tasks. She did not necessarily need a very high-end graphics card like the one I was selling. I thus recommended her some more suitable graphics card options with higher availability and more affordable price. She appreciated my advices a lot. Eventually, she paid me $1000 for all the items I listed except for the graphics card, and I helped her purchase all the other required components to assemble a functioning desktop system.
The total value I gained from the two deals was $1960, which was much higher than the highest expectations I had based on market prices.
Case Summary
In the process of selling my desktop computer, multiple negotiation opponents were included. These opponents gave me multiple options to set up a selling a plan to maximize the profit. The graphics card market environment at that time was giving me a considerable advantage, as the unit price and the buyers’ demand were both very high. The negotiation with buyer C was an excellent application of Pareto improvements. The deal we made did not only involve monetary values, but also involved ideas of cooperation and achieving a win-win situation. On my side, I was not only able to sell my graphics card at a satisfactory price to one buyer, but also to sell out all the remaining components I had to another buyer. As a result of the successful deals, I could afford a better laptop to maximize my productivity in future work. On the other side, Buyer C was able to spend the lowest money to have the most suitable computer for her needs. Moreover, she did not need to worry about assembling it because I assembled it for her. We also became good friends after the deal.
Self-reflection
Before taking this course, my negotiation style was entirely based on self-interest. I did not even know the basic concepts of negotiation. I always wanted to gain as much value as possible without being considerate for the other side. To be honest, there would be no way for me to reach this ideal outcome if I did not take this course. From the lectures, and the experiences I gained from the negotiation practices we did every week, I learned how to analyze my current situation before coming up with the most appropriate strategy before negotiation. Personally, the most valuable lesson I learned is to think outside the box, to be more creative, to bring more value beyond money to the table to achieve a win-win situation.
I believe what I gained form this course will not only help me understand the situation of both negotiation parties, but also help me create more value in my future negotiations.
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