Costco Hot Dog Price Story
The story about Costco $1.50 hot dog price began in 1993 when the Costco merged with Price Club. Costco's $1.50 hot dog price remains unchanged in 2024.
By: Brad Nakase, Attorney
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Stephanie has just created her own startup business, a small tech company called ElectroBot that designs robots for military contractors. There are a lot of competitors in her space, and Stephanie knows that for her company to be successful, she needs to be a top-class negotiator. That said, Stephanie went to school to study robotics and computer science, not business. She is not aware of what negotiation techniques to use as a business owner. When Stephanie gets home one night, she makes a pot of coffee and types into Google: Negotiation Techniques for Business Owners. Stephanie loves her company, and she’s determined to be its first and best advocate by learning negotiation techniques.
It’s true that startup owners may not always know how best to negotiate. Especially if they are coming from a different field, they may not know that running a business involves constant negotiations. Some are minor in nature, like getting a good deal from the printer ink supplier. Others are more complex in nature and may doom the business from the start.
Some people are born negotiators. Picture a little kid setting up a lemonade stand and charging five dollars for a cup of mediocre lemonade. That drink is certainly not worth that price, but the kid convinces you that the labor it took to make the drink and the feeling of an ice-cold lemonade on a summer day justifies the price. This child is a natural negotiator. But for most people, negotiation comes with time and experience. Nor is it something that is often learned in formal education – it comes from real life practice.
Still, there are some negotiation techniques that can help business owners with their power of persuasion.
1. Preparation
A business owner should always go into a negotiation prepared. The owner should first understand what he or she wants out of the negotiation for his or her company. What are they willing to accept, and what is a dealbreaker? It is also important to research the opposition and try to learn what they want out of the negotiation. Know their strengths and weaknesses. If the research isn’t leading anywhere, it may be worth hiring a lawyer or expert in the business space.
2. Timing
Timing is a critical element of any negotiation. Not only should a business owner know what they want, but they should also know when is the most opportune moment to ask for it. Being a successful business owner requires knowing when to push ahead, and when to wait. Sometimes being too eager and asking for too much at once can spoil a relationship. It is essential to pace appropriately.
3. Abandoning Ego
While a business owner may be proud of his or her business, showing too much pride or confidence may come across as ego or arrogance. This can poison deals or ruin relationships. Good negotiators don’t mind who gets credit for a deal as long as the deal is made. In fact, an excellent negotiator will make the other side feel like the deal was their idea. Boasting and showboating do a business owner no favors in the realm of negotiation.
4. Listening Skills
When it comes to negotiation, a business owner is best advised to listen before speaking. Let others give their opinions or make their case before arguing one’s own. By waiting and listening, one may know what the other side is thinking and prepare a response, or plan of attack.
5. Go Big or Go Home
When it comes to negotiating a sale, a good negotiator knows to go as high as justifiably possible. Why sell yourself short? If a business owner presents a convincing, well-thought-out argument, then the other side might buy into it. There’s nothing wrong with aiming high as long as one backs it up. That said, one should leave one’s ego at home. Ultimatums have no place in negotiations. So, no take-it-or-leave-it offers.
6. Compromise
Negotiating often means compromise is necessary, so a business owner should plan to make concessions. Still, there is a way to work compromise to one’s advantage. The other side will be planning to compromise as well, and who knows what their bottom line is? One might as well test that. A business owner should therefore not accept their first offer. Even if the offer is better than hoped for, one should still decline and see if a better offer is made.
7. Commitment
A deal is only good if all parties are committed to following through. A good negotiator will know that to make a successful deal, he or she must demonstrate to the other side that he or she is trustworthy and committed. Similarly, a business owner should steer clear of deals where the other side does not seem committed to delivering.
8. Solve Problems
If, during a negotiation, the other side presents all their reasons for not being able to accept an offer, a business owner should try to solve their problems. If, for instance, they say that they can’t afford a certain deal, one should come up with other ways for them to find money.
9. Remember Principles
A business owner who has worked so hard to have their dream come true has likely formed a set of guiding values and principles. He or she simply won’t compromise their beliefs or integrity. If a negotiation makes a business owner uncomfortable, he or she should trust his or her instincts and avoid the deal.
10. Confirmation
When a deal is agreed, a good negotiator will go over the issues covered in the meeting and verify agreement. It is a good idea to follow up with written letters or emails to provide a paper trail.
