Mastering the Art of Haggling By J.D. Roth
Last weekend, The Washington Post published an article from Mike Rosenwald about the recent resurgence of haggling. To get a feel for the art of the deal, Rosenwald spent a week putting haggling to work in his own life:
For consumers like me who have spent decades shopping at full retail, getting a deal on previously no-deal items is liberating and invigorating, as I found out during a recent week I spent haggling.
At first, my wife and friends asked me if I was crazy, but when I reported saving $3 on steak at Giant and $50 a month on our Verizon bill, they asked only one thing: How?
Just before Christmas, I spoke with Rosenwald about haggling. Though none of my tips made the final article (which is no big deal; that’s how journalism works!), he did profile long-time GRS reader Stephen Popick (who also volunteers as the GRS discussion forum admin). Rosenwald writes:
Popick is a well-paid guy — he can afford things. But he looks at price tags merely as suggestions. (Call him cheap, and he’ll thank you for the compliment.) For years, Popick has haggled down prices on ground beef, videogames, beer, bicycles, magazines, satellite TV and even the his-and-her plastic reindeer that adorned his front lawn for Christmas.
“I’ve always wondered why more people don’t do this,” said Popick, who lives with his wife in Alexandria. “This is your money. It would be wasteful not to do this, right?”
Taking lessons from Popick and others, Rosenwald gave haggling a try. He negotiated on everything from DVDs to steaks to cell phones. Final result? Rosenwald saved $730 in seven days.
As I’ve said before when this subject comes up, haggling isn’t for everyone. But if you’re brave enough to negotiate — and willing to put up with occasional rejection — you really can save money.
Here are some past Get Rich Slowly articles on this subject:
How One Reader Uses Haggling to Save Big Bucks By J.D. Roth
Last week, Jason shared a guest post on how to negotiate to save money. Daylily Diva wrote to share her own experiences, which I’ve reproduced here with permission.
I love haggling — it’s second nature to me. If I’m buying bagged mulch at the garden center and some sacks have small puncture holes, I negotiate a discount because the sacks are damaged. I negotiate on everything. For one thing, I’m in the antiques business, and that forces you to learn haggling from day one.
Standard operating procedure
First, I’m always upbeat and happy when I haggle. I’m friendly, smiling, good-natured, make jokes. I never insult the person or his merchandise. I make the seller want to give me a discount to make the sale.
After the money changes hands, I thank the seller. If they’re not busy making other sales, I tell them how much I will enjoy using a particular item which I’ve bought. When I leave the seller has money and is in a happier frame of mind than before I arrived. This is the “win/win” technique.
Here are some of the common ways I negotiate. Many people do these things.
* If I’m at a yard sale or buying a bunch of things, I pile them up and ask for a better price because I’m buying a lot.
* I always ask if there’s a discount for good customers, and that’s often all it takes to get a discount.
* I ask, “Can you take $XXX if I promise to give it a good home?” I say, “It’s so cute, I don’t need it, but it’s really attractive, can you take $XXX for it?” It’s amazing how minor a nudge it takes to get something off the price.
These are common techniques that many people use. But there are a couple of others that work very well.
Good buyer, bad buyer
This is a wonderful technique. The good buyer expresses interest to the salesperson. She then consults with bad buyer, who is along for the ride. The bad buyer has a glum attitude and many negative feelings, which he expresses. The salesperson works to overcome the objections.
When we reach the absolute bottom price by haggling, the good buyer then says, “Well, my husband hates it but I like it, so if you can knock another 10% off I will take it anyway.” This gives them the salesperson option of dropping ten per cent more which they usually do, or counter with a 5% discount. Either way, you are ahead another five or ten percent!
Getting the boot
I use another trick after I arrive at the absolute rock bottom price with the seller, when they will not go a penny lower. At this point, I ask them to throw in some small extra thing.
At a yard sale, for instance, I have made my pile of merchandise, obtained a rock bottom price for the heap, where the seller will go no lower. I then pick up some other item and say, “You drive a hard bargain. If you will toss in this lamp (or dog toy or vintage pillow or bread machine or whatever) to boot I will pay your price.” And they do!
Point out the positives
Praise the object and tell them why you like it, but admit that it is more expensive than you can manage. I once bought a house this way. The woman’s childhood home was for sale — her parents had died. The price was $45,000. She rented it to a nasty, dirty couple who stored dead cars on the lot, did not mow the lawn, stored junk in the house, etc.
Every time a potential buyer came through to look, the man beat his wife while they were there, and it would not sell. People made the owner low-ball offers while insulting her about the condition by telling her how ratty it was. (Which it was, by the way.)
I went through and saw potential. I arranged to have owner meet us at the property, which the real estate agent hated. But after three years of carrying this house on the for sale roster, the agent was desperate.
I took the owner by the elbow, walked her around the property and through the house. Periodically I would comment to her on things which I liked.
I admired the scraggly hydrangea which her father had planted and asked her what flowers to plant around the base of it to make it look most attractive. I commented on how clever her father had been to build a summer house out of nothing and how much he must have enjoyed using it.
I talked about how cute the house was, like a tiny cottage in the woods. I didn’t say one single negative thing. I chatted about some of the neighbors who had known her family and what warm feelings the neighbors had for her deceased parents.
I talked about how charming the house was when she was young, and how happy she must have been when she lived there as a child. I got her to talk about her life when she lived there.
This woman already knew the negatives because people had been telling her about them for three years.
The owner cut the price from $45,000 to $25,000 on the spot. She took my $5000 down payment and held the mortgage for the balance at below bank rate for five years, which was all it took to pay off the house in full.
She turned the garage over to me three months before the closing and I rented it to a man for storage for $100/month, earning myself $300 gross rent before closing on the house!
Because the owner held the paper, I didn’t have to have for pay for inspections, appraisals, points or origination fees. I got a bargain, and the woman was thrilled to sell the house to me for practically half price! She walked away from the deal happy as a clam.
That’s how to haggle, and it’s often by not running the thing into the ground.
The exception to the rule
The only place I don’t get the best deal if I negotiate for myself is car dealerships. When buying a car, I negotiate the best deal possible and get it in writing. No matter how good the deal is, I return later with a man. I let him do all the talking. I let him go mano a mano with the salesman while I sit silently by doing my “bump on a log” act.
We invariably get another discount. This would be depressing if I allowed myself to be depressed — instead I use the system to buy my cars at cheap prices. At car dealerships, a man who knows negotiation gets the best price.
In my experience, almost everything is negotiable. I negotiate. The worst the seller can say is “no” and if so, so what? Most people will give a discount if they are ready to sell — you just have to ask!
How to Haggle By J.D. Roth
Some people know how to haggle. They’re able to bargain with shopkeepers in order to save a few bucks on pair of shoes, a book, or a piece of furniture. I’ve never haggled before except at garage sales and in World of Warcraft. Computer games are one thing, real-life is another. Real-life haggling scares me.
Recently, I’ve stumbled upon several stories about haggling. An AskMetafilter user writes:
I’ve heard that it’s okay to negotiate the listed prices on furniture at independent, mom-and-pop stores. My friend says no, it’s not like buying a car from a dealership, where there’s the expected offer-counteroffer dance.
I know this isn’t possible at Ikea or Target, but at my local, one-location only furniture store, is that a possibility? And, if so, how do I start the conversation? “$400 for this dresser? How about $300?”
This thread has lots of great advice:
It is always appropriate to haggle.
It never hurts to ask. Nothing ventured, nothing gained.
From the start, be clear that you are seriously interested, not just curious. Be prepared to buy if the seller meets your price.
Be polite. Don’t try to apply high-pressure tactics.
You’ll have more leverage if you’re a frequent customer. Stores want to please regular customers.
Engage the seller in a conversation first. Establish a rapport.
Be willing to walk away.
Pay cash. Cash money is better for the seller than hassling with credit.
Shop late in the month. Salespeople are trying to make quota. Weekdays are slow, so that’s a good time, too.
I particularly like this comment from madamjujujive, who learned how to haggle from a friend.
The June 2005 Reader’s Digest featured a short guide to haggling, touting 5 lines that work. The 23 Jan 2006 issue of New York Magazine was all about saving money, and included a piece on how to haggle. In addition to the advice listed above, it suggests:
Don’t be ashamed. “You can haggle anywhere, anytime — even at the doctor’s office.”
Stay cool. “Haggling is about bluffing; if you show weakness or nerves, the salesperson will know you’re going to fold.”
Ask when it goes on sale. “If you ask to be called come sale time, it could be marked down then and there, just for you.”
Haggling sounds like a fun way to save money. I’ll have to keep this in mind the next time I go shopping.
Comments may be made at the end of Part 2 Thank You