iStock 000005372046XSmall Learn to Negotiate Better Prices

This post was written by Marie. 

If you pay full price, you are probably being taken.

Americans historically have not haggled for better prices on most items. We go to the nice clean supermarket where the prices are individually marked and pay that price. We get the satellite bill and pay the price on the statement. We shop for a new mattress and don’t even try to get the price lowered. One reason most of us hate to go to a car dealer to buy a car is because it is one of the few places where negotiation is expected, and we aren’t good at it.  Because of this, most of us are probably being taken by paying more for products than we could be paying.

Our culture now seems to be changing. To keep up we need to learn that negotiation (aka haggling) is acceptable, expected and useful. We need to see our role models negotiating. We need to practice haggling. Women especially need to give themselves permission to negotiate, be exposed to those doing negotiations and practice negotiation.  Inability to negotiate better salaries has been identified as a major factor in why women are paid less than men.

Dr. Phil says that we need to claim the right to negotiate.  We should convince ourselves that it is OK and that it doesn’t make us look cheap or bad.

Everything is negotiable, prices are not set in stone. If you walk in and pay the posted price, you are probably being taken.

No Good Role Models

Growing up in America in the fifties and sixties, I seldom saw negotiation in action. Mom never asked for a discount in my presence. Dad never made a counter offer on a car purchase. I was raised to expect to pay the posted price. It was humiliating to have to haggle. When we went to Mexico on a vacation, the street vendors followed us up the street lowering their prices as we walked away. I was embarrassed for them – why were they doing this? I did not realize that people should and do negotiate.

Catch Up With A Changed America

Although our citizens don’t practice the very visible haggling over every item for sale that I saw on that Mexican vacation, I believe we are seeing a trend toward more price negotiation in the U.S.A.

Budgeting in the Fun Stuff negotiated a reduction in her cable and internet bills  by calling the retention department and saying she would hate to leave but would if she couldn’t work out a cost reduction for the services.

My daughter-in-law walked into a furniture store and talked the manager into giving her a 20% off the top discount on all furniture purchased that day – since she was buying a lot.

The lady ahead of me in the line at Walmart mentioned that the frozen pretzels she was buying were $3.00 less over at Hen House and the checkout clerk knocked $3.00 off the price.

Garage sales – need I say more? The sellers grow weary of everyone asking ‘Can you do a little better on this item?”

I ,myself, knocked the price of a satellite repair call down to zero by just asking WHY I would have to pay when it is their equipment that has malfunctioned through no fault of my own.

Negotiation Tips

Give Yourself Permission

It’s OK to negotiate. It doesn’t make you a bad person. It doesn’t mean that you are cheap. It doesn’t mean you are trying to put down the other guy or put them out of business. Negotiation is business -  as my boss used to say “Everyday, everything is a negotiation”. Negotiation is expected. Negotiation saves you money or gets you what you want or need. You need to negotiate.

Do Your Homework

  • Know what you want from the deal – a lower price, more stuff, better service, etc.
  • Know what else is available – what alternatives do you have and how closely do they match what you want?

Set the Stage

  • Talk to the right person – you can’t negotiate with someone who doesn’t have the power to change the price or the deal.
  • In the book Crucial Confrontations, the authors suggest establishing safety – find mutual respect and purpose so you can both feel good about the deal.
  • Build some rapport. The Four Hour Work Week Blog suggests that you can do that by getting the other guy to invest time in the transaction. They say that this helps the other guy want to deal with you. Don’t be a jerk – show them you are down to earth, a regular dude who is very similar to them.
  • Prepare some opening remarks to let them know you expect to negotiate.
  • If need be, help the other person learn to negotiate – make it a game or tell a short story about a successful negotiation.

Don’t Be an Opponent

  • Let them know you want the best for both parties.
  • Ask questions to understand the other guy’s position – the more you know, the more successful you will be in identifying ways to reach an agreement.
  • State the facts, identifying the gap between what you want and what they offer. Paint a clear and simple picture of how to bridge the gap – make it easy for them to do what you want.
  • Find solutions that give something to both of you (the sale, a better price, more stuff for the same price, referrals, publicity, whatever it is).

Start the Haggle

  • Let the other guy know you are expecting to negotiate with an opening statement that is appropriate to the situation. For example, if you are buying gas at the pump, ask before you pump about their cash discount policy – let them know that you know that they pay a 3% or more credit card transaction fee.
  • Inc. Magazine  suggests that you be aggressively low with your first offer (for example if you are negotiating a discount on a new refrigerator at Lowe’s – start with a discount of 70% off retail!). The price you start with establishes an expectation in the other guy’s mind as to the worth of the object and is also your starting point (it will only get more expensive for you from there).
  • Always counter if the other guy offers first (otherwise the other guy feels like he could have done better).

Show Your Reaction

  • Flinch at conditions or prices when they are offered – even if it is a good deal for you.
  • Make a face at something you find unacceptable.
  • If on the phone or web, make a statement like ‘ouch’ that substitutes for the above.
  • Unsophisticated hagglers will immediately lower the price when you cringe.

Be Prepared to Walk Away

Keep your emotions out of the process. No matter how much you love the product, you must be prepared to walk away from it.

Other Tips

  • Subtly mimic the person with whom you are haggling. According to the above Inc. Magazine article, it sets that person at ease and establishes rapport with them.
  • If you make a concession, make sure the other person knows you are making it and try to get something in return.
  • Just because something is in writing doesn’t mean you can’t challenge it. According to Dr. Phil, in the above article, you should ask questions, poke and prod the written rule to find it’s negotiable spots.

What Can Be Negotiated? Everything!

  • Professional bills (doctor, dentist, hair dresser, lawyer, accountant….)
  • Cars purchases and service
  • Add ons (if you can’t negotiate the price, get the other guy to throw in extras!)
  • Everything else

Negotiate Everywhere You Go

Practice, Practice, Practice!

Are you shopping at the Macy’s? Ask for whatever discounts were in the paper; ask for whatever sale prices will go into effect next week, talk to the manager to ask for a volume discount if you are buying multiple expensive dresses and etc.

Are you going to Price Chopper? Find the lowest price in the city for the item you want to buy and take it in with you to get the same discount. If you are buying from the deli, talk to the manager to see if she will throw in an extra vege tray when you buy the meat tray for your party.

Are you going to a motel? Ask for any discount you can think of or go late and make offers on available rooms that would otherwise be empty for the night.

My biggest obstacle to haggling successfully is in giving myself permission to negotiate. What is yours?   Tell me about a successful negotiation you completed.

Learn to Negotiate Better Prices Marie has written 28 articles on this blog.

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