The man to the left is “The Old Man” from Pawn Stars on the History channel. The show is great to watch and see how they negotiate a price over an item. I learned some of my negotiation practices from watching people like the old man haggle over price.
Below are the methods I use to get the best possible deal I can when I enter a negotiation for the purchase of any item.
1) Never be the first one to name a price
If you are the first one to name a price in any negotiation congratulations you just named the starting point for the negotiation. This means that if you named a price that the seller is comfortable with you just overpaid for the item. I will almost never be the first to name a price when buying an item. I wait for the seller to give me his idea of the starting price and I usually counter back with an offer roughly 50-75% of what they asked for. Asking price is almost never what the seller is willing to settle for.
2) Predetermine the most you will pay prior to starting negotiations
Be knowledgable about the product you are buying. Do a little bit of research and find out what the average price of the item is and in what conditions warrant what prices. Set your limit around 70-80% of the average price of the item, and do not, I repeat DO NOT go past the limit you set for yourself. Paying what an item is worth is not what we are after here. We are after the best possible deal here, and you will never get it if you just going around paying fair market value. So if you pay what the item is worth you did a terrible job negotiating.
3) Be prepared to walk away
This is very important. What you are negotiating on is just a thing. You are using YOUR money to find a great deal on a thing you wouldn’t mind owning for the right price. Do not become emotionally attached to the item or you will almost always overpay for it. When the negotiation stalls, be ready to walk away. It is better to live to haggle another day than to overspend due to emotional attachment.
4) Don’t be afraid to ask for a discount
This is the most surprising tip to me. Most people will look at the price tag and assume that there is no dealing to be made. Most of my discounted purchases come from tagged items. You will never know if you can get a deal if you don’t ask for it. Along with sticker priced items you can also ask many professional services for a discount and get it. Your dentist, doctor, plumber and others generally have enough margin built into their service to be able to shave a few bucks off for a loyal customer.
5) USE CASH
Cash talks, that all there is to know. There is a very strong urge to close the deal when a person gazes on a pile of green. They will reduce large amounts off of their price simply by seeing cold hard cash. I have negotiated hundreds of dollars off of a price by simply laying down hundred-dollar bills in front of people and then acting like you are going to walk away with “their” money if they don’t take the offer in front of them. Most folks will drop their price substantially when they can put the greenbacks directly into their pocket.
6) Be polite
To keep from burning bridges, and to be able to come back and dicker with people time and time again. Be sure you are treating them with respect. Never tell them the item isn’t worth what they are asking. Politely let them know that you are not willing to pay what they are asking and either counter or ask them to bid against themselves by giving you a lower price. Rudeness will very seldom if ever gain you a good deal. It will only make the person resent you and make it harder to deal with them in the future.
Once you start to implement these strategies you will find that the price of just about everything for sale is negotiable. And it becomes fun to see what kind of deal you can create. Good luck making those deals out there.
Note: if you use these tips to grab a deal I expect only a meager 10% commission
Just kidding I would however like to know what tips about negotiating that you may have, and deals you may have negotiated. Lets start a discussion to make us all better at getting the best deal possible.