Negotiations: Doing Business In Japan

Negotiations: Doing Business In Japan

We sit across the table from the Japanese side and we assume they are all united and on the same page. That may not be the case. Often the people in the meeting are representing the various vested interests who will be impacted by the deal. Some of them won't want the deal to proceed, because it changes the current arrangements and they don't want that to happen.

 Don't rely on the cient's side to provide the interpreter for you. Bring your own interpeter and they will be able to give you valuable feedback on how they feel the other side is thinking about your proposal, what are the dynamics going on inside their group, what is the body language telling us, etc. For this you need to brief the interpeter on what you are looking for, because they are rarely business people themselves and won't necessarity know what to be looking for.

Don't go in at your best price to be competitive. The Japanese side will see that as a starting point against which they will try to negotiate the price down further. Come in with a good price and always have a trade off between price and other things like warranties, volumes, payment timing, etc. 

Have your BATNA determined, that is your Best Alternative To A Negotiated Agreement or your walk away position. Don't imagine that by going super low in the pricing you will be able to walk the price back up. It won't happen. That low number will be the number and it won't rise. No matter how much you try to condition the buying side to understand that this low price is a one-off, special, once only offer, they will ignore all of that and just concentrate on the low ball number you have agreed to.

Don't tell the other side your travel plans, especially when you are leaving. Time is a negotiating tactic and they have plenty of time on their side. Japanese buyers are risk averse and they feel no pressure. They know you have time pressure to get a deal cut or you go home empty handed and that won't be greeted enthusiastically back at head office. They know all of that, so they will try to use time pressure to cut a deal that favours them. 

If they ask, tell them it is open ended, no cut off point. Don't book a ticket without the opportunity to change it because you will need as much flexibility as possible to get yourself into a good position in the deal.

Also getting a deal on one trip to Japan is unlikely. You may need to make a number of trips to build the relationship and cement the deal. Keep coming back, because this shows your commitment. 

If you have to walk away, then do so. There are many players here in Japan and they are not all concentrated in Tokyo. You will find sizeable companies in the regions of Japan and there will be good business to be done there with a big player in that Prefecture. You can build a business, Prefecture by Prefecture over time and not have ot event worry about doing a deal in Tokyo.

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About The Author

Dr. Greg Story: President, Dale Carnegie Training Japan

Author of Japan Sales Mastery, the Amazon #1 Bestseller on selling in Japan and the first book on the subject in the last thirty years.

In the course of his career Dr. Greg Story has moved from the academic world, to consulting, investments, trade representation, international diplomacy, retail banking and people development. Growing up in Brisbane, Australia he never imagined he would have a Ph.D. in Japanese decision-making and become a 30 year veteran of Japan.

A committed lifelong learner, through his published articles in the American, British and European Chamber journals, his videos and podcasts “THE Leadership Japan Series”, "THE Sales Japan series", THE Presentations Japan Series", he is a thought leader in the four critical areas for business people: leadership, communication, sales and presentations. Dr. Story is a popular keynote speaker, executive coach and trainer.

Since 1971, he has been a disciple of traditional Shitoryu Karate and is currently a 6th Dan. Bunbu Ryodo (文武両道-both pen & sword) is his mantra and he applies martial art philosophies and strategies to business.