Why Making the First Offer in a Negotiation Puts You in the Best Position

Whether you are negotiating a higher salary, an agreement on a business deal, or bargaining over the price of a car, someone has to make the first offer. Should you be the first to speak up or should you wait and see what the other person has to offer? This decision is critical and can influence the outcome of the negotiation. Though it has been widely debated, you might be missing a huge opportunity if you allow the other party to make the first offer. Despite the common belief that waiting for an offer gives you valuable information about your counterpart’s bargaining position, there is strong evidence to suggest that there is actually more to gain by making the first move yourself. Here are a few reasons why you should make the first offer in a negotiation. 

The Anchoring Principle

The initial offer is usually the best predictor of the final outcome. It acts as a psychological “anchor” that creates a strong pull throughout the negotiation. Though this anchor is unconscious, it acts like a powerful gravitational force that pulls the other person in your direction. Research has found that human judgement is highly influenced by any relevant number that enters the negotiation. For this reason, first offers have a strong anchoring effect that the other party is often incapable of resisting. As a result, making the first offer gives you more control at the bargaining table. 


Waiting Could End Up Backfiring

The conventional advice about negotiating often says that you should never put the number on the table first or you should never show your hand first. However, many experienced negotiators find errors with this advice. If you simply wait and hope for the best, you might miss out on an opportunity to get more out of the deal. For example, if you are negotiating for a new job and the hiring manager begins to talk about salary, you might lose money if you let them make the first offer. They might lowball you, when in fact they would have considered a higher number if you had suggested it first. Having said that, be sure that your offer is substantiated through research rather than just throwing out a number. If you make the first offer and start higher than you expect to get, you can usually work down to a number that is reasonable for both parties and this may in fact be higher than you would have gotten if you waited. The bottom line is that waiting and hoping could end up backfiring, so be prepared and confident and make the first offer. 


You Appear More Confident

When you make the first offer, you immediately set the tone and establish yourself as confident and well-prepared. This gives you a strong bargaining position. Negotiators who wait, often come across as timid and easily swayed and this can be a disadvantage. The other party might act more aggressively to get you to concede. 


You Leave Room for Flexibility

The first offer is rarely the one that gets accepted and this is widely known. In just about every negotiation it is expected to have some give and take. When you make the first offer, however, you give yourself room for flexibility to make strategic concessions. Not only does this work in your favor to get what you want, but your counterpart is also more likely to be satisfied because they feel like you were willing to make concessions.