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Comment by davemel37 | Hacker News Reader

This reminds me of SharkTank where Mark Cuban would make a shot-clock offer and give 30 seconds for someone to accept the offer.

Here's the thing. Mark Cuban can walk away from any deal, at anytime and not feel like he is missing out.

So, while you are certainly getting the shorter end of the stick with an exploding offer...It's usually coming from a place where the person making the offer has enough leverage to be ok with losing the deal.

In this case, waiting will make you lose the deal.

Sometimes, a good enough offer is better than a slightly better offer.

More importantly, as Robert Ringer says, "The results you get out of a negotiation is inversely proportionate to how intimidated you are when negotiating."

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Mark is performing for television. The only appropriate response to a 30 second offer is "f--- off".

I have an equal distaste for exploding offers, but I'm not sure this will get the desired result :)

>Mark is performing for television

That, and most of the deals he (a Billionaire) is talking about investing in on Shark Tank involve him doling out incredibly small and insignificant sums of money for equally small and insignificant (in his eyes) returns.

He really doesn't care if you take the offer or not on Shark Tank, because even if you do and you succeed beyond your wildest dreams, it's not going to make him any richer than sitting through a Dallas Mavericks game would.

The one thing I've learned about negotiating is that you absolutely must know your negotiating position before evaluating your strategy. Parent post and grandparent post are both perfectly fine points, and how they apply to each of us depends entirely on our set of circumstances.

Equally as important is positioning yourself prior to the negotiation. How the other person views you is one of the strongest drivers of how they will negotiate.

Edit: This is why getting introduced to an investor puts you in a much stronger position than soliciting them directly.

"you absolutely must know your negotiating position before evaluating your strategy"

This is essentially true in any decision-making situation, not just financial negotiations.

I was a really crappy grad student, but I went into my dissertation defense knowing exactly what I was bringing to the table and it went very well. Ditto for the better job interviews I've had.

Also about how many options you have for yourself. You never want to put yourself in a situation where you might get an exploding offer without something else in hand.

Unfortunately I didn't follow this advice when recently buying a car.

It's difficult to imagine a situation where it's rational to offer another rational actor an exploding offer to buy a car. Jobs sometimes need to be filled quickly. But when is selling a car today so much worse than selling one tomorrow?

It sounds like the "exploding offer" another scumbag car dealer pressure tactic. Car dealers will do anything, including lying, to prevent you from negotiating efficiently.

You assume it was a dealership. A perfectly legit example of an exploding offer would be a used car with an attractive price where the deal goes to the first person to show up and claim it.

Anecdotally: last year I've tried to buy at least 5 cars that were sold before I got to the appointment. When I finally found one that was ok for its price, I bought it without asking any more questions.

Car dealers have sales targets for each month. If they hit the target, they usually get a big bonus from the manufacturer.

I've gotten a dealer to sell me a car under dealer price by e-mailing every car dealer in the area on the 29th of the month, saying I was looking to buy a (specific model of a) car immediately. All you have to do is find the one dealer who is 1-2 cars away from hitting their bonus target. It is rational for them to sell to you under cost because they will more than make it up in the bonus; it is rational for you because well, it's under cost.

For those curious, This American Life did a whole podcast on the end-of-month car sales thing. It was quite fascinating and really does exist.

One of the more interesting points in the entire thing came in the first minute where they point out that things like the end-of-month sales impact the entire US economy because it has to do with auto sales, and GM and steel working and etc follow up the chain. Weird to think of it like that.

Anyone know if this is true for other countries? Specifically Australia? I'm in the market for a new car... and not too fussy about what I get.

It used to work wonderfully in the UK each year, around August or September, that the registration letter would change. Telephone a bunch of dealerships (in the days prior to email) and tell them you wanted to buy a very specific make and model and the current year which only has a week or two left before the registration letter increments. I don't know if it still works because I haven't owned a car in the UK in over 20 years.

But every car dealership in ever country has sales quotas to meet. You just have to find out when they are.

It is for any corporation that has quarters to report to wall street. I used to sell capital equipment ($10-50K invoice amounts) for Snapon Tools. The specials that would come down the line two weeks before the end of the quarter would be ridiculous. I once sold a $30,000 machine for $16,000 because I could close it in June (not July) and the buyer was paying cash and would take a demo unit off my truck. I got the sale, buyer got a discount, everyone above me got some bonus, everybody was happy. Then the same thing happened 2 weeks before the end of the third quarter just thirteen weeks later - suddenly almost all the appliance sized machines were half priced to clear inventory and make numbers. I sold 33 A/C machines in 3 days. That should have taken 3 years to move that many units.

So whenever you are buying something from a corporation, try to figure out if they are ahead or behind in sales. They can get really desperate to make the numbers. If the product is selling faster than they can make it, all bets are off. That popular stuff stays a full retail. Nobody will discount since production is limiting their sales, not demand.

Also, understand flooring costs. Often a dealer of expensive stuff like cars, trucks, motorcycles, RVs etc gets a line of credit from a large bank for "flooring". This is the roughly 1% per month fee the dealer pays to the bank for interest for the line of credit. If that unit has 12 months of flooring charge against it, people can get really good deals. They just want to clear stale inventory and will take a loss to do so.

It's worth being aware that this can work both ways.

I've worked with sales teams where "I need to hit target this month" was used as a cover story to offer a moderate discount to a buyer without creating (too much of) an expectation that such discounts would available in the future, or suggesting that the company was getting desperate to close.

That is, it was a partly-but-not-entirely-true story to justify an exploding offer.

Yes, it does make a convenient excuse to discount. Another good one is "It has a tiny scratch on it, we can't sell it for full price".

This is off topic, but I would like to appeal to your human sense of dignity. There are a number of cars available to the Australian buyer which can't be readily had by consumers in much of the rest of the world. You can buy Lapanese-spec sports cars from Nissan. You can buy 4 wheel drive Mazdas. Most importantly, you can buy a ute. Utes, or car-bodied vehicles with a pickup bed, are extremely practical. You can commute etc. in a low, safe, fun vehicle, yet have significant cargo capacity. This market never took off in the Americas due to our love affair with pickup trucks. Modern utes can be had in incredibly sporty or economical models, too. Most utes can't be legally imported to America, since no crash safety tests etc. have been done.

I suppose what I'm driving at is to please consider buying a ute (like a Ford Falcon pickup with a big v8), because there are starving drivers in America.

There is at least one classic American ute: Camaro pickup. Glorious.

https://www.google.ca/search?q=camaro+pickup

It'd make a lot more sense to everyone if the 30-day periods were staggered for each employee, and if they could score "assists" for fellow employees (said fellow employee would need to agree, of course). This would probably make the sales process far more sustainable and team-oriented.

Of course, companies that haven't set their own quarter ends (my employer's quarter ends on a different day than the calendar quarter) are also subject to a similar larger-scale rush-to-target by Wall Street.

Or do rolling averages? (Ie like atomic decay.)

The challenge is the mini-deadlines are externally driven. "How much revenue will we report to our VC and/or Wall Street?"

Otherwise sales would just be a rolling commission with no end dates.

For some reason this brings back memories of Soviet style end of month production cycles, where the goods made earlier in the month were of better quality than those made by rushing in the last few days of the month.

Or even the old fashioned "never buy a car built on Monday or Friday" thing.

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