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Friday, July 3, 2009

The Art of Negotiation

I am sitting here reading The Complete Tightwad Gazette when I come across the section about negotiating. Amy Dacyczyn first talks about how Americans are afraid to negotiate which I have found to be true. Why is that? Are we afraid that the vendor will think we don't really have the money in the first place? In my opinion, not negotiating a better deal makes me feel like I appear reckless with money. I also think I look like I have sucker written across my forehead. I am not saying that I always negotiate, but I certainly try whenever applicable. I don't negotiate when the deal is already really reasonable. For example, I don't negotiate at a yard sale for something that is very reasonably priced.

My mother and I have been attempting to teach my child how to negotiate her own deals. She is really good at it, but she also has the cuteness factor on her side. She has been known to negotiate a $3 item down to 50 cents. She does this mostly at yard sales and flea markets for practice. I am hoping this will help her look for better deals in the future. Whenever I want to buy something, I wait and look for the best possible deal before going ahead with purchase.

Everyone should try negotiating a better deal. Do not pay full price when it is not necessary. It would be smart to stay out of retailers as much as possible because you are not likely to get a better deal at major retailers. However, it is not impossible especially when something is slightly damaged. Always ask for a better price on a damaged item!!!

Anyway, I have read Amy Dacyczyn's tips to negotiation. I thought I would share them with you who have never read or heard of the Tightwad Gazette series. I am going to paraphrase a lot here, but the ideas will remain the same.

1. Everything is negotiable - even in retail stores. This is not always true for big retail chains. Look for the owner or manager whenever possible and ask if they will take less. Sales people will not likely have the power to negotiate. In a small store, be discrete. They may not want other shoppers to know they will take less.

2. Negotiating is a human transaction as well as a financial one. Establish a relationship before haggling. You will be able to assess the person's character and motivation before making an offer.

3. Gently guide the discussion to the item at hand. Do not jump into the ask. This reminds me a lot of fundraising, but you need to work your way into the ask. Do not appear overly positive or negative. If you disparage the item, you may hurt your chances of getting a better deal. Appear neutral.

4. Don't rush to discuss prices. Try not to be the first to offer up a price. Let the owner throw out the first number.

5. Once they offer a price, do not counter immediately. This shows the person you were listening to them and is more respectful than countering right away. Take a moment to consider it. Then make your offer - they will likely be more receptive.

6. Before making your counter offer, give your reasons for offering less. They will likely ignore your reasons if you give the price first. They have to listen if you do it before countering.

7. If they still disagree, offer to settle somewhere in the middle. Generally this works. If not, consider walking away from the item. If you aren't willing to pay the middle price, you may not want it badly enough and probably don't need it anyway. Often when you begin to walk away, they will call you back and let you have the item for the lower price. If not, it wasn't meant to be anyway.

Happy Haggling!!

Source: Dacyczyn Amy. The Complete Tightwad Gazette II: Promting Thrift as a Viable Alternative Lifestyle. New York: Random House, 1998.

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