Concession

Concession in foreign trade negotiations refers to one party making compromises or concessions on price, payment terms, delivery time, quality standards, etc., in order to reach an agreement. It usually appears during the bargaining stage and is an important means of breaking a deadlock and facilitating a deal. Usage scenarios include: the buyer requesting a price reduction, the seller requesting a shorter payment cycle, and both parties having differences over delivery time. Precautions: concessions should be conditional and reciprocal, avoiding unilateral bottomless concessions; each concession should decrease in magnitude to show that one is approaching the bottom line; before making a concession, assess one's own costs and profit margin, and record the other party's reaction. Unlike a 'discount,' a concession is not necessarily a direct reduction in price and may involve non-price terms; compared with a 'compromise,' a concession emphasizes one party actively giving, while a compromise is both parties each giving in. Foreign trade practitioners should make good use of concession strategies, but must ensure that overall interests are not harmed.