Tips and Strategies on How to Negotiate
Everything is negotiable! If you don’t ask, you won’t get!
The world has changed. It used to be that only big ticket items such as a house, a car were negotiable, but now in the new economy just about everything is negotiable. The range is amazing! In fact retailers know they must lure customers in by offering steep discounts, especially during these tough economic times.
If an item isn’t on sale, it’s up to you to change that. The way to do this is by speaking up. Don’t be embarrassed to flat out ask the salesperson or the owner of the store the following question: “Can you do better on the price?” This is the key question to ask in order to save money via negotiation. It’s only 7 words, takes a few seconds to say and it can save you thousands. The worst thing the seller can say is “no” – there’s nothing to lose and it never hurts to ask.
What if the seller says “no” and refuses to lower the price? Should you give up? No! In this case, keep going. Maybe you’re shopping at a fruit stand – tell the seller that you’ll buy more fruit if they take 10% off the entire order. Many times, store owners are willing to discount items if you buy in bulk – and if it’s an item you buy regularly, there no harm in buying in bulk.
The fact is virtually any retail store is negotiable. In most cases you will have to speak with the manager, but they have some discretion as to how much of a discount they can offer. Floor samples, slight damages or imperfections are prime targets for a discount. Let’s say the pair of shoes you want to buy at the store has a minor scratch/scuff mark. Essentially, the shoe is “damaged”. The shoe is still useable, but it is not in perfect condition. In this case, show the damaged shoe to the store manager. Ask if there is a price reduction available. You may receive a discount as high as 10-20% off.
Compromising is what negotiation is all about. Put yourself in the seller’s shoes: you don’t really want to discount an item, since that will result is less money for you. On the other hand, the seller should put themselves in the buyer’s shoes, which is that the consumer wants the best price possible. Therefore, it is important for both parties (seller and buyer) to find middle ground and compromise. This is also known as splitting the difference. This means that if an item costs $100 and the consumer offers to pay $50, the seller splits the difference and offers the item to the buyer for $75, which pleases both parties.
If you’re buying a new cell phone or a new computer, for example, at a specific store, be sure to show the salesperson print-outs or proof of other competitor stores that are selling the same exact item at a cheaper price – find out if the original store will match the lower price of those other stores.
For college students who are in the market to find a house or an apartment to rent, present the agent or landlord with print-outs and advertisements from other houses/apartments in the surrounding area to show the agent that you know what the going rate is for an apartment in that town. Also, come prepared with the prices of similar apartments in different buildings in the area. This sends a message to the salesperson that if you don’t get the right price for this house/apartment, you’d have no problem moving to another comparable building in the vicinity.
When negotiating, be kind and courteous to the other party. The saying, “people buy from people they like” makes lots of sense. Sellers discount more to people they like. Charm, a big smile and statements like “I’d like to buy if you give me the right price” go a long way in capturing the best deal. Conversely, a nasty attitude, threats and a disagreeable personality will almost always ensure you are not going to get any favors from the salesperson.
Here are some guidelines to help you save money through negotiation:
1. Do your research. Know the lowest price the item sells for at other retailers. Price checking online is the only way to go.
2. Once you know the lowest price use this as a starting point for the negotiation.
3. Remember, ultimately it is the price that counts, not the discount.
4. Always ask, “Can you do better on the price?”
5. If they agree to lower the price, counter with an even lower offer.
6. If you are able to pay cash, the merchant will avoid a 1.5% MasterCard/Visa or 3%+ Amex fee and may pass the savings on to you. And you should ask for a cash discount.
7. Ask the retail salesperson if the item is going on sale and if you could have the sale price now.
8. Depending on your nerve, you may want to offer 50% of the selling price.
9. Make sure there are no hidden costs such as “dealer prep” when buying a car, exorbitant shipping costs or service fees.
10. Never rave about the product, the more enthusiastic you are the less likely you will get a discount since they think you are buying with your heart not your brain.
11. Act somewhat indifferent or at least pragmatic. It is okay to say you like it, however constantly reiterate that it is more than you’d like to spend. This is not the time to play big shot, but rather the time to plead poverty. The ideal positioning is for the salesperson to think you are a long shot to purchase and therefore he must give you an extraordinary deal. Remember professional, commission based salespeople are quickly assessing if you are a buyer or “tire kicker”.
12. Always try to deal with a store owner, a decision maker, the boss. They can give discounts that are well beyond the salesperson. It may sound cruel, but by dealing with the head person, you may be able to avoid the salesperson’s commission and have the savings passed on to you and get a better deal.