What is a ‘Bad Deal’?

The Guy in red with the tail and horns is marked A, and the plastic Guy with a briefcase is B . This saves me chundering on about a red guy with horns and a plastic with a briefcase.

Most deals will benefit one party more than the other . There are few ‘win, wins’. In my experience there are a varying degrees of ‘goodness and badness’ in every deal.

I suspect that most seeing the image above will assume that A is getting the better of the deal, and the B guy is getting a really bad deal. Well if B is a major drug syndicate boss , then they might think they both have a really good deal . Assuming A doesn’t have a problem with drug dealing (stop there , never judge a book….)

In business , I think there are three types of deal.

1. Where both sides of a negotiation are already in a commercial relationship.

2. Where one party is seeking to start doing business with a new partner.

3. One off purchase.

There are, undoubtedly, many variations but broadly speaking all three categories cover the majority of commercial ‘deals’.

Despite having been doing it for a long time I can’t say I have cracked this deal business. I would go further and say I am probably pretty rubbish at it. But I won’t say that in case there are some potential customers who may , by default, come across this post. I can recount one incident, where the negotiations were all one sided, in that the customer (type 1 in this case) did no negotiating whatsoever or so I thought.

Myself and a colleague spent half an hour in front of said type 1 , presenting product and prices . He said absolutely nothing, until the end. When he simply said ‘pick up your order from the printer in the next room‘.That man is now one of the U.K’s most successful retailers and is listed in the Sunday Times Rich List. The closest I get it to it , is reading it.

In most cases type 1 deals are not really deals or rather you can rarely classify whether they are good or bad, which in my book means they aren’t actually deals . Let me explain.

You can have a meeting with a customer, with which you come away with an order, contract or promise to buy blah, blah,blah. You feel fairly satisfied or in rare cases ‘very’ satisfied in that the margins are acceptable, the quantities are good , terms are fair and more blah, blah. Yet over a period of time there are loads of things that can impact upon what you thought was a deal.

  • They don’t buy anything like what they said they would
  • After a period (could be a lengthy period) and say thank you very much but we would like some historical financial contribution to help with something like help with marketing
  • They don’t pay to terms
  • They go bust
  • They use the sales data to go and do their own thing

The list is endless (truly endless) . The point I am trying to make is that you never really sure what the ‘Deal’ ever is.

Type 2 is the same but different.

Generally, involves a protracted courting of the potential ‘client’ prior to any negotiations. Followed by lengthy discussions involving terms of trade, finally culminating in an agreement allowing trading to start. You don’t actually ever have a deal as generally it is a dynamic process. The culmination of this process may allow you to look back and say ‘that was a successful relationship ‘ but I would be hard put to describe it as a deal, for the all the reasons described in type 1.

Type 3

I can lay claim to a recent, nay solitary, success here. I wanted to be buy a replacement base layer (something you wear for the ‘non rugged’ outdoor type ). Eventually I found what I wanted, but at a price I was not happy with. I would love to say I then spent three hours haggling until finally, due to my extraordinary talents in negotiating skills, I got it at the price I wanted. But I can’t . The ticket price was £35. The guy took it to the till and removed the security tag.

Shit …..he made a tiny hole in the neck.

We will go to plan A

He tapped into the till resulting in

I can do it for £10.50

Deal ….I replied

So there you are that’s what a good deal is….unless , of course, it falls apart because of the hole or I get a permanent stiff neck from the draught. Then it would be a ‘bad deal’. I am going to have to wait to find out.

So what I’m driving at is that there is lot a chat about good or bad deals. Whether, of heads of state, politicians in general, leading industrialists, even clergy, and a load geezers in pubs, they all bang on about them. But they don’t really exist . Rather they don’t exact in a pure form . The Oxford English Dictionary defines a deal as

An agreement entered into by two or more parties for their mutual benefit, especially in a business or political context

Note the mutual benefit bit. That’s the problem . It’s not possible to walk away from a negotiation assuming there will be mutual benefits. A Deal is a process and it is not until the end of the process , that you find out if it was good or bad . Then, both parties will have their own opinions as to when that process ends.

Here’s another problem. I never know whether I am talking to A or B . The snivelling ‘gits’ never dress in red and always cover up the pointy bits on their heads. Should I be ‘bovered’? Nah…’cos you just don’t know whose got the best deal. Or at least that’s the impression I get from some my customers…..

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s