Do You Have the Gift of Negotiation?

November 4, 2015

Does it bum you out to think about giving up a latte, cable television, sporting events, or a nicer car to pay for something in the far flung future? It bums me out because I’m a materialist at heart who happens to value saving money. Negotiating a lower price is a guilt free way to obtain what you want, while freeing up cash to fund the less-fun parts of personal finance. There are many strategies and tactics used to negotiate a price on everything from cable to appliances to medical services. In the past year, I’ve employed the following negotiation methods to save cash on small and large purchases alike.

Before Shopping

What approach to take? Will a subtle or direct approach work best? Should one be coy with information or simply lay everything out on the table? Each buying situation is different. The key is figuring out beforehand how to incentivize the seller to give a break on price. Take a moment to assess the business and product and figure out how to approach negotiating.

What is a fair price to pay? Making an offer that’s ridiculously low tells the seller that the buyer isn’t serious. Do some research on what the item is currently selling for and what kinds of discounts have been applied in the past. 


Now That You’ve Found the Perfect Item

Be Friendly and Honest
Talking the price down can feel a bit like a war. However, it’s a mistake to be be rude, sarcastic, deceptive, or aggressive. Negotiating a price can’t be about winning; it’s about finding a price that is mutually beneficial to all parties. The goal is to make the seller feel good about evening up the deal.

Take Your Time
The seller cares more about winning. The time a sales person spends with a potential buyer is time spent not selling to someone else. The more time invested in a potential sale, the more the seller wants to close it. Explore all the store has to offer. Ask a ton of questions. Ask if they can check information for you. Leave the building and take a couple of days and come back for round two and more questions.

Good Buyer, Bad Buyer
Have you ever had a sales associate say, “I’d love to give it you for 30 percent off but my manager says no way?” Sellers aren’t a buyer’s friend, but if it feels like they are, they’re more likely to trust they’re doing the best they can for you (even when they aren’t). Shop with someone else and let them play the reluctant buyer. The statement, “I know you want it, but that’s too much to pay” signals the seller that it’s time to offer a lower price. The “Good Buyer, Bad Buyer” routine has multiple uses. Good Buyer gets the seller into the frame of mind they have the sale while Bad Buyer gives the reasons to sweeten the deal. Determining beforehand which role each buyer will play and stick to them.

Timing
Many sellers have monthly sales quotas to meet. If a deadline is looming to hit a quota or bonus, the seller will be highly incentivized to make deals. A word of caution, don’t use this information in direct negotiation, as it might turn the seller off. If a sales associate doesn’t have leeway on price, ask for a manager. Managers may have a sales target the associate doesn’t. If you’re shopping a onetime event, the end of the event is bargain time as sellers get desperate to make those last few dollars.

Cash is King
Fees and state sales tax created by credit card transactions reduce a seller’s bottom line. Offering cash payment is an effective closing method to nudge a seller into a deal.

Bundling
Combining products into one discounted sale price increases revenue for sellers. If a buyer negotiating the price of a television is getting nowhere, they can ask if adding a Blu-ray player to purchase could result in a deal.    

Ask for Free Stuff
There’s a chance the seller won’t give a discount. That doesn’t mean the negotiation is over. The ultimate goal is to reduce the cost of the entire transaction not just the product. Ask for free accessories like cables, warranties, or free shipping or delivery. The seller may have more leeway in those areas.   

      

One Last Note
The hardest part of negotiating is emotional. Buyers may feel there is a negative stigma attached to asking for discounts. They are afraid of being perceived as cheap or poor. Negotiating price is not a negative reflection of financial station but a testament to a commitment to fiscal discipline. Negative feelings vanish once a buyer realizes they’ve just saved $120 a year on cable, $250 on a home repair, 20 percent off a television, or $500 off a luxury item just by asking some version of a simple question, “Can you work with me on the price?”    

Have a negotiating story or tactic you’d like to share? Leave us a comment.