Tactics Scenario: I Have Worked

¶ … Tactics

Scenario: I have worked as a t-shirt seller with a company that sells rock t-shirts on tours with rock bands. The various musical venues -- especially the commercial venues -- demand from 40% to 45% and even up to 50% of the gross sales from the sale of the t-shirts. The concessionaire has his staff count our shirts in before the concert and counts them out after the concert to be sure he or she gets the total revenue from our sales. Every single shirt is accounted for so that every possible dollar is earned for the venue. My boss liked it when the band we are traveling with plays at college campuses because there is almost always room for some negotiation on the percentage the venue takes from our sales -- or even better, the concessionaire on a campus will often just accept the offer from my boss without batting an eye; hence, no negotiation is necessary

Questions and Answers

ONE: there is a deadline that will affect the timing of the bargaining. TWO: my BATNA (best alternative to a negotiated agreement) is to have the concessionaire in the university concert building flatly agree to my initial proposal. My best estimate of the other party's BATNA is to cut a deal that relieves his staff of having to count T-shirts and yet gives his organization the maximum amount of money in turn for giving us the right to come into his facility and sell shirts. The concessionaire in a university building may not be as sophisticated in negotiating -- or in knowing the strategies that the big t-shirt vendors from super groups use in whittling down their costs -- as a concessionaire in a big commercial house like Madison Square Garden, for example. My BATNA on a university campus is my starting point; I may have to accept the fact that I need to give in to the concessionaire's lowest percentage demanded (he may not want to agree to accept a flat payment as an alternative to a percentage of sales that would be determined after the concert, fearing that I will pay quite a bit less than the percentage).

THREE: I need to know how many tickets to the concert have been sold ahead of time because typically the rock band we travel with sells t-shirts to 11% of the concertgoers. If there are 8,000 tickets sold to the show, I know I'm going to sell about 880 shirts. At $15 per shirt, I am going to have gross sales of $13,200 and if I give the university concessionaire his normal percentage (35%) of my gross sales, I'm anticipating I'll have to give him $4,620 at that rate. FOUR: The power tends to be tilted my way, not his, because he wants the revenue from the shirts (it is normally a fundraiser for nonprofits on campus) and he really doesn't want to have to count the shirts in and out. So he often will just take the cash advance I offer for the right to sell in his building. I offer him a flat $2,000 for the rights to sell and he likely will take it, or perhaps negotiate to get $2,500, which I expect him to do. If the deal is sealed at $2,500, and indeed we sell around 880 shirts to this audience, I have saved about $2,000 from what I would have had to pay if we had agreed to 35%. It's called "buying out the house" and many vendors use this tactic.