I disagree. That's called setting a tone. Negotiation begins with an offer. In any business, from building a 3-season porch, having custom cabinets built, to commissioning a painting of the baby, starting the conversation with "I need your best price" communicates something very specific about how the remainder of the relationship is likely to go. Not well, I submit.
It's different than stating a budget; i.e. "I have $1500 in my advertising budget to work with; please get me a proposal that reflects a website that can be built for that amount of money.". That is, I think, defining expectations.
I spent 19 years in the claims business negotiating thousands of personal injury cases. Approaching plaintiff's counsel with an opening statement of "I don't have much money to spend so I need your best price" would actually be seen as the opposite of negotiating.
If a potential client calls and immediately states that he needs it cheap before EVER articulating what it is he needs, the warning flags go up, no questions asked. Usually, "I don't have much money to spend" is followed by a detailed discussion about photo galleries, virtual tours, and lots of Flash.
As I stated in my original post, it's not the desire for a fair and equitable pricing that sends up the red flag. It is this, coupled with the "I need it yesterday" mentality and the "my prior company won't call me back" that merely begins to demonstrate that there are particular clients who may simply not be worth taking on.
I'm not asking the clients to just open up their check book, bend over and take it like a man. I'm simply stating that there are warning signs, there are nightmare clients, and we've all seen the profile. The question is, can we see it coming a mile away, or do we only see it after the contract is signed?