We all negotiate whether we realize it or not. But most of us could use a little practice to really use the process to our advantage. Negotiating, bargaining, and haggling are handy life skills that can and should be used by anyone, all the time. Smart domestic shoppers to small business owners, sports stars to big time CEOs are constantly bargaining to get the best deal—and so should you.
There are many reasons why people are willing to bargain and come down on their prices. A store could be clearing the shelves of old inventory for new. In the classifieds or on craigslist, a seller may need to pawn a big ticket vehicle quickly to pay the mortgage or this month’s rent. At a garage sale, the seller might be moving and trying to get rid of belongings ASAP, or just find a better home for an item they no longer use.
Last summer I got a steal of a deal on a large leather sectional couch from someone promptly relocating to New York City for work. I stopped over with cash (and a moving buddy, just in case), and worked out a great deal. We got to talking afterwards about similar hobbies we enjoyed and he decided to throw in a rug, ottoman, pillows, and throw blankets. This was a win-win situation: He no longer had to worry about what to do with the furniture, and my living room had a great looking, almost brand new couch.
When thinking about ‘bargaining,’ money is probably one of the first things to pop into mind. However, I remember bargaining since I was a little kid and learning the advantages, disadvantages, and tradeoffs of a deal. Growing up with two other brothers, there was a constant battle for sitting in the front seat of the car. After negotiations, it was decided that the two who did not sit in the front were instead in charge of the radio station or CD we listened to, creating a win-win situation.
Learning from everyday, non-monetary bargains can help us to get better deals in larger, more important transactions, business or otherwise. Prices are not set in stone, so there is almost always room to save money here and there with just a few tips and tricks. We’ll go into these tips shortly, but first let’s briefly debunk a few myths about haggling.
1. I Don’t Have the Right Personality to Negotiate
It’s not necessary to be argumentative or aggressive when haggling. Remember that negotiation is simply about finding a way to create a win-win situation—one in which the buyer gets a great deal and the seller makes a profit. No one is excited to complete a deal if one side is too pushy or dominant. Simply staying silent and listening are actually very helpful tools to use while haggling.
2. Haggling Is for “Cheapskates”
All types of successful people haggle. Acquisitions happen and companies work out deals that benefit both parties. Successful business owners don’t get ahead by accepting every offer at asking price. They do their homework to counter-offer smartly and effectively in order to consistently pay only what the item is worth to them.
3. Haggling Isn’t Worth My Time
Sure, there are situations where bargaining won’t get you anywhere, so don’t waste your time trying to haggle at a big box store, restaurant, or movie theater. Nor should you nickle-and-dime someone over a bottle of Coke. Save your time for bigger ticket items and appropriate settings. Haggling with friends and family is another situation you would treat much differently than while dealing with a stranger. While it is true that everything is negotiable, not every setting is right to negotiate in. Pick your battles wisely.
1. Don’t Make the First Offer
Never make the first offer when negotiating if you can avoid it. Find out what the person is selling something for and make a counter. When the other party supplies a number, it gives you a lot of information to work off of and you can then decide a strategy to proceed with. I prefer not to ask the seller their bottom price because it allows them to set the tone for the start of negotiation. I’ll offer what I think is fair and see what the seller’s reaction is. We can then work off my counter.
2. Cash Is King
Cash talks, plain and simple. Always flash cash if you want to get the best deal. At the time of sale, it’s unknown whether a check will clear, a money wire will occur, or if the funds will be available. Using cash, the seller will be pleased to have the transaction take place immediately with no unknowns. Get in the habit of taking cash with you when you are looking to score on your next purchase.
2. Do Your Research
If possible, learn as much as you can about a certain item or about what you are trying to purchase. Learn about the typical flaws on certain models, comparable prices in other stores or on eBay, and other similar sales happening elsewhere.
Say you are looking to buy a vehicle off craigslist in your home town. Do a Kelley Blue Book search to see how much the vehicle is worth, and read reviews online to see what people say about the vehicle. If the particular year and model has a reputation for being less reliable, make sure to point this out to the seller.
Start a conversation with the seller that isn’t related to the sale. If the seller has fishing rods you can see, start talking about your favorite rivers to fish, or ask if they’ve had much luck lately. Talking about things you have in common and bringing a little humor into a conversation can work wonders in creating a relationship quickly. The seller will see you are a good, down-to-Earth person, and may even decide to sweeten the deal or throw in something extra.
4. Set Standards
Set standards in your mind for a good deal and don’t be afraid to walk away if the final offer doesn’t feel right. But be sure to give the person your number in case they change their mind or don’t find a buyer; they’ll at least have someone interested who’s already put an offer on the table.
For example: Last year I bought a Macbook Pro computer and my goal was to get it for under $600. The asking price of $800 was a little more than I wanted to spend. There were a few scratches on the computer and a dim part of the screen, and pointing out the flaws helped give me some negotiation room. However, I was only down to $725. I had $600 cash with me and told him that that was the best I could offer him, and left him my number. Within a few days he hadn’t found a buyer and called to ask if my $600 offer was still on the table. I agreed, pending he’d deliver it. We made the deal and both sides were happy.
5. Show Hesitation
Never let a seller know that what they have is absolutely perfect for you. Act hesitant and be sure to point out any wear, scratches, or flaws on whatever you are looking at. If you are looking at purchasing a motorcycle, point out parts you’ll need to replace and work that will have to be done to get it up to par. If the tires are a little worn, let them know that that should be taken into account. Don’t forget to mention the deals you’ve found on other bikes in the area or even on eBay. Make it known that you have other options and don’t have to have to buy their item.
6. Use Silence
Silence can be awkward during a conversation and hard for a seller to handle. While the seller is explaining the item he or she is selling, don’t be afraid to just not say anything, or use a subtle skeptical ‘hmmm’ from time to time. Often, the seller will continue talking and get the feeling that you might not be as interested anymore. They might throw in extras or lower the price to help gain your attention and sweeten the deal.
7. Ask for Other Deals
Sometimes stores or individuals won’t bargain as much as you’d like. Always ask if they have any coupons or special offers. Make it known that you are looking for a deal and will act on it if you can get the right price. Often, inventory needs to be moved quickly, and places are willing to accept less if it means closing the deal.
8. Shake on It
Shake the sellers hand and end with a little conversation. Leaving on a good note makes both sides feel good about the deal and ensure future transactions or referrals will occur.
I hope these haggling tips will help you save some money next time you seal the deal. As an entrepreneur, bargaining has enabled me to save thousands on equipment and supplies for my e-commerce businesses. Friends and fellow business owners are always asking how I find such good deals, so I wanted to share some of my tips with fellow entrepreneurs. I hope they are helpful. Please share your tips or advice below!