The first number you hear shouldn’t set the price you pay.

A client once told me:

Another shared:

This is anchoring bias in action—a mental shortcut that quietly affects how you perceive value and negotiate.

And for small and medium business owners, it can lead to unnecessary spend, poor timelines, and skewed decisions.

Let’s break down what anchoring bias is, how it shows up in vendor negotiations, and how to avoid losing money to it.

Step 1: What Is Anchoring Bias?

Anchoring bias is our tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.

Once an initial number is introduced, it influences:

• What feels “reasonable”

• How aggressively you negotiate

• Whether you walk away or give in

Even if the anchor is arbitrary or inflated, your brain starts calculating from there.

Step 2: How It Shows Up in Vendor Deals

Price anchoring:

Vendor says, “Our usual charge is ₹1.5 lakhs, but we can do ₹1.2.”

You feel like you got a deal—even if market rate is ₹90K.

Timeline anchoring:

Vendor says “We typically deliver in 60 days.”

You adjust your expectations—even if the project can be done in 40.

Feature anchoring:

Vendor highlights a premium feature early, framing everything else as a “discount”—even if you didn’t need that feature at all.

In each case, your negotiation becomes reactive, not objective.

Step 3: Why It Hurts SMBs More

• You may not have a dedicated procurement team

• You often negotiate based on relationships, not market comps

• Vendors know founders tend to focus on product, not pricing structure

• Once you anchor high, every concession feels like progress—even when you're still overpaying

This silent inflation compounds over multiple vendor contracts—and eats into your margins.

Step 4: How to Neutralize Anchoring in Negotiation

✅ Get multiple quotes before talking price

Always enter negotiations with at least 2–3 reference points. This gives you your own anchor to compare against.

✅ Don’t react to the first number

Take notes. Ask for a breakdown. Don’t commit or counter immediately.

✅ Break the quote into components

Anchor bias thrives on single, round numbers. Split costs into:

• Product/service

• Setup

• Training

• Support

• Delivery

Once disaggregated, inflated components become visible.

✅ Set your own anchor early

Before asking for a quote, say:

Now you’ve set the anchor, not them.

Step 5: Train Your Team to Spot It Too

Even if you’re not the one negotiating:

• Teach key employees to question quotes

• Review vendor discussions together, especially in large or repeat spends

• Maintain a vendor quote history log to build internal pricing benchmarks

Anchoring thrives in inexperience and one-off negotiations.

Training kills both.

TL;DR – Too Long; Didn’t Read

• Anchoring bias makes you accept inflated prices or timelines by overvaluing the first number you hear.

• It affects vendor negotiations through price, delivery, or feature framing.

• Collect market benchmarks, break down quotes, and set your own anchors.

• Train your team to question rather than react.

• Good negotiation starts with data—not just discounts.

Every rupee saved in vendor negotiation drops straight to your bottom line.

But to save, you need to recognize when you’re being framed, not just offered.

Because anchoring is a mental trick.

And smart founders don’t pay more because someone sounded confident.