Negotiation and Bargaining: What’s the Difference?

Negotiation and bargaining are two techniques that are utilized every day in the workplace, at home, or in a common marketplace.  People often confuse these two terms because of their similarities, but in fact there are distinct differences between the two.  By developing a solid understanding of this distinction, you can create an awareness of how and when to use each technique.


Bargaining is a technique that deals with price alone.  The focus is on who is right and it is a competitive technique with a win-lose outcome. If you are haggling between price and quality, you are participating in bargaining.  In this technique, each side is seeking only economic benefit and one side always ends up feeling cheated.  For this reason, bargaining is not always the best option for consumers.  Bargaining does not involve taking into account the needs of your counterpart.  Rather, each side is seeking to get the greatest economic benefit out of the deal.


Negotiation is a technique that applies to much more than price alone.  It is an exchange of values, agreements, and promises of performance.  The focus is on what is right and it is a cooperative technique with a win-win outcome.    Negotiation involves trust and openness between the two parties.  It involves listening to your counterpart to find out what their needs are and working on a plan to meet those needs.  Negotiation is much more lucrative for consumers because each party focuses on what is truly important to the other.  The focus is shifted from numbers alone and moves toward a common goal where everybody comes out a winner.

Typically, when we think of bargaining we think of an open marketplace in Asia or South America where haggling over the price of anything from pineapple to jewelry is almost considered a sport.   While negotiating might include a focus on price, the fact is it deals with so much more.  For entrepreneurs and business professionals, understanding this distinction can mean the difference between closing the deal and closing the right deal.  Anyone can adjust the price of their product or service to win over their counterpart, but the other party is left feeling cheated.  Learning the art of negotiation can help professionals close a deal in which both parties feel like they have “won.”