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Side Payments

Disciplines > Negotiation > Negotiation tactics > Side Payments

Description | Example | Discussion | See also

Description

When what one side wants is more than what the other side wants, balance the difference with a cash payment.

This will need a valuation of the items being exchanged. An independent agent may be used for this or it can just be included in the negotiation.

Example

In a house exchange, where an older couple are swapping their big house with a young family who have a smaller bungalow, the difference in value is negotiated and the family pay this in cash.

Look, I'll give you this Honda and five hundred extra for your Ford, which I know is a bit newer.

Discussion

Where the negotiation is not about buying something, there is often an unspoken assumption that the exchange is goods-for-goods or some other non-financial interaction. Bringing in a compensatory balance can help to make things more acceptable.

The same principle can be used in other ways, for example where a sales person 'throws in' additional products to make their price more tempting.