The Naked Negotiator

At the turn of the century, American steel magnate Andrew Carnegie sold his steel interests for $300 million to fellow financial titan, J.P. Morgan.

There was no negotiation.

Carnegie, who never bargained, simply jotted his price on a piece of paper, handed it to an intermediary, who in turn passed it on to Morgan. Glancing at the paper, Morgan mumbled, “I accept.”

Years later, legend has it that the two millionaires bumped into each other on the promenade deck of an Atlantic liner.

“I have been thinking,” said Carnegie, “that I should have asked you for $500 million.”

“I would have paid it,” replied Morgan — and walked away.

Before you start bargaining, you need to calculate what you are initially going to offer. More than any other single factor, your first offer will shape the outcome of the final deal, so it’s vital to plan it carefully.

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