You want to get a good price on an item, say a used car. You've explored all of your alternatives, including the Kelley Blue Book of used car prices. You know the point to walk away, and you can identify a potential impasse. You've assessed the best possible deal you might, and set up the stage for success. Now comes the first offer. Who should make it? You or the salesperson?
On occasion, the salesperson may beat you to the punch and make the first offer. The conventional wisdom is to let the salesperson make the first offer. However, research into the "anchoring" of a negotiation reveals that how we perceive a particular offer's value is highly influenced by any relevant number that enters the negotiation environment. Numerical values are considered "anchors." Anchors affect the judgment of even those who think they are immune to them--and there is plenty of research backing that up. Adam Galinsky, another expert in negotiation, has found that when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.
So if you've done your homework and have decided on a realistic range within the arena of possibility, the buyer will be better off to make the first offer. All kinds of negotiation experts will rejct this, but the research is overwhelming. Not only does making the first offer anchor the negotiation in your favor, but it also offers you a bargaining advantage when that offer is rejected.
However, when the seller has a lot more information about the item to be negotiated than you do, then the first offer will not be nearly as successful. So always do your homework and do it thoroughly if you want to negotiate a price in your favor. Last year, into the early months of the recession I bought a new car. I followed through on my homework, checked out new car website and decided that I was after a $1500 discount off the current list. I didn't make the first offer as I'd anticipated. Instead, the salesman offered me a $2500 discount and I was so shocked that I forgot to stall, and accepted the price. I've since realized that it would have been wise to stall since I didn't make the first offer. I'm convinced I could have done still better. Ahhhh, well. Can't win them all.
You've made your offer and usually the seller needs space to think about it, so he/she will start talking. Rather than responding to your offer, you're liable to get features and benefits, even though they've already been through the list. Furthermore, experienced negotiators are aware that you will get nervous and perhaps make a better offer if they take their time responding to an offer. Savvy hagglers wait out their counterpart's stalling tactics--because that's what's going on. Malhotra and Bazerman say it's a serious mistake to make an "unreciprocated concession."
If you get no concession from the salesperson, thank him for his time. Often, the mere fact that you're going to walk away inspires the salesperson to come up with a counteroffer.
Remember: If you've done your homework, you're usually ahead of the game if you, the buyer, make the first offer.