A Rug, a Big Number, and a Small Counter
A negotiation expert named Adam Galinsky once told a story about buying a rug in Morocco.
He was still deciding what to offer when the shopkeeper spoke first. He named a huge price. Galinsky didn’t flinch, and he didn’t let that number start feeling “normal” in his head. He pushed back hard, in the other direction, instead of slowly creeping toward the shopkeeper’s number.
They ended up settling somewhere far below where the shopkeeper started.
It’s a fun story on its own. But it’s really showing something bigger, something that happens in almost every negotiation you’ve ever had, even the ones you lost without quite knowing why. It’s called the anchor effect, and once you see it, you can’t really unsee it.
What the Anchor Effect Actually Means
Here’s the simple version.
Whatever number gets said first in a conversation tends to stick in your head. Every number that comes after it gets measured against that first one, even if the first number was completely made up. Your mind grabs onto it, and only moves a little from there, instead of thinking fresh.
Researchers have studied this for decades, and the finding keeps repeating itself. Once a number enters your head, it quietly shapes how you judge everything that follows, even when you know the number wasn’t fair to begin with.
Why the First Number Carries So Much Weight
Here’s the part that actually matters for you as a business owner. The first number in a deal isn’t just an opening line. It’s already doing real work inside the other person’s head.
Researchers have found something worth remembering. When the seller speaks first in a deal, the final price tends to land higher. When the buyer speaks first, it tends to land lower. Whoever speaks first usually pulls the whole conversation in their own direction.
Think about why this happens. Most things being negotiated don’t have one “true” price. A supplier deal, a salary, a piece of land, a partnership. None of it comes with a price tag stuck on the side. So your mind grabs the first real number it hears, and treats it as a rough starting point for everything else, even if that number was picked on purpose to be very high or very low.
You Don’t Need to Be the Bigger Side to Use This
You might assume only the stronger side in a deal should speak first. It turns out that’s not really true.
Even people with less power or less experience at the table were able to shift a deal in their own favour, simply by speaking first instead of waiting and reacting.
This matters a lot if you run a small business. You don’t need to be the bigger company, or the one holding more leverage, to use this. You just need to be ready enough to speak first, with a number you can actually explain if someone pushes back.
It Shows Up in More Than Just Price
Most people only think about anchoring when money is involved. But it shows up almost everywhere in business conversations, not just in the final price.
Think about payment terms in a contract. Whoever first suggests “half upfront, half later” shapes the rest of that conversation, even if the other side pushes back on it. The pushing back still happens around that first shape.
The same thing happens with deadlines. If you’re the one who says “we can deliver this in four weeks,” that becomes the anchor, even if three weeks or six weeks would’ve also been reasonable. The other side usually negotiates around your number, instead of starting with a fresh one of their own.
Even in hiring, this plays out constantly. Whoever states a number first, whether it’s the candidate or the business, tends to shape the whole salary conversation that follows.
A Simple Way to Picture This
Imagine you run a small design studio, and a client asks what you’d charge for a project. You haven’t said a number yet.
If the client speaks first and names a low number, that number now sits in the room. Even if your usual price is much higher, saying your real number suddenly feels awkward, almost rude. Your mind has already started shifting toward their number, not yours.
Now picture the opposite. You speak first, calmly and clearly, and say your real price. Even if the client negotiates you down a bit from there, you’ll likely still land in a far better place than if they had spoken first with a low number of their own.
Same client. Same project. A very different result, just based on who spoke first, and how confidently they said it.
Mistakes People Make Once They Learn This
Knowing about anchoring is one thing. Using it well is another. A few mistakes I see often, once business owners learn this idea.
Some people take it too far, assuming a bigger number is always better. If your opening number feels completely unreasonable, you risk losing the other person’s trust entirely, instead of pulling the deal your way.
Others go too soft. They learn about anchoring, feel awkward about seeming greedy, and quietly undercut themselves anyway, picking a “safe” number close to what they’d accept at the very end. That wastes the whole advantage of speaking first.
Some people anchor well, but can’t explain the number if someone pushes back on it. A strong opening number needs a reason standing behind it, or it can fall apart fast under a little pressure.
And a few people say a confident number, then immediately apologise for it, softening it with nervous explanations right after. That quietly undoes the exact thing they just did.
How to Actually Use This, Without Overthinking It
None of this needs to feel like a trick. Done honestly, it’s simply good preparation.
- Decide your number before the conversation starts, not during it. Otherwise, the other side’s number quietly becomes your anchor instead.
- If you’re buying, don’t let a big first number sit in your head unquestioned. Think about what feels fair to you first, before you hear their number.
- If someone gives you an unfair number, don’t inch slowly toward it. Push back clearly, the way Galinsky did with the rug seller.
- Have a reason ready for your number. A number with a clear reason behind it holds up far better if someone pushes back.
- Sometimes, let the other side speak first on purpose. If you genuinely don’t know the real value of something, hearing their number first can actually help you.
Why This Matters Even More for Small Businesses
Big companies often have whole teams trained just for negotiation. Small business owners rarely get that kind of backup. You’re usually negotiating supplier rates, client deals, and even your own salary completely alone.
That’s exactly why something as simple as this is worth knowing. It costs nothing to learn. No fancy course, no big budget. You just need to understand, clearly, that the first number said in any conversation is never just an opening line. It’s already shaping where things end up, before the real conversation even begins.
This is also the kind of small, easy-to-miss skill that quietly separates businesses that lose a little in every deal from ones that do slightly better, again and again. Nobody notices it in any single negotiation. But over a year, across many small deals, that small edge adds up to something real.
Where I Help With This
As a business consultant in Jaipur, and as a business coach in Jaipur working with founders and small business owners, I spend a good amount of time helping clients prepare for exactly these moments. Supplier talks. Client deals. Partnership terms. The small, specific conversations that quietly decide how much a business actually earns.
Most business owners aren’t bad at negotiating because they lack confidence. They simply haven’t been shown how something as small as the first number shapes everything that follows. A lot of the founders I work with expect big, dramatic fixes for their business. Often, the real shift is smaller than that. It’s just learning to speak first, with a clear number and a clear reason, instead of waiting nervously to see what the other side says first.
If you’d like help preparing for an upcoming negotiation, or you simply want to get sharper at this in general, I’m Rahuul Kumar Jain, and I’d genuinely enjoy working through that with you.
