Tuesday, March 8, 2011

Negotiation and Barter

Americans as a whole tend to abhor negotiation and barter. They see something that they like, and often just buy it for whatever price is listed. Sometimes people shop around and compare prices for the same (or similar) things on various websites, but usually people "go with what they know" and buy from vendors they have dealt with before at whatever price is listed.

I admit, I have done that too. But having spent a year in my college days in Europe, living with local families and learning about life in situ, I learned a lot about barter and negotiation.

Barter: trade something of value for something considered to be of equal value. Think about it, kids barter all the time. Why do we forget that technique when we become adults? I do a lot of barter with services. I need contractors who can replace a tub in a rental house. In exchange for their labor, I have done some electrical repairs for them. Barter applies well to both services as well as goods. While I do not trade boots or leather gear, I know others who have done that and such exchanges generally have worked out well.

Negotiation: the old adage, "you don't 'get' unless you ask" applies. If you see something you like -- such as a leather jacket or a pair of boots -- it is perfectly fine to ask the seller if he/she would accept a different price. That's called negotiation.

One very important thing to remember: "MSRP" means "Manufacturers Suggested Retail Price." It does not mean "final" price.

When approaching a negotiation, don't be stupid and offer, for example, $200 for a pair of new stock Dehner boots that retail for twice that. No retailer in his right mind will accept such a low-ball offer. However, many retailers will match prices offered by other vendors if asked -- and even if they do not offer to do that on their website.

I have saved between US$25 and US$200 on a new pair of boots simply by asking for a different price, and giving specifics. "That pair of boots is on sale here ... " (and provide the link.)

I have avoided turning my website (or this blog) into a sales gimmick -- promoting one vendor's products over others so that I can get free stuff or reduced prices on goods and gear. My website is a personal hobby, not a vendor forum. However, I will state where I obtained a product and how others interested in it can get it. In exchange for that, I sometimes have offered data (website visitor logs help) and asked for a reduced price on something. Sometimes I get it, sometimes I do not. But again, if you don't ask, you don't "get"!

A lesson that I learned (and that's darn hard for many Americans for reasons that escape me) is "when to walk away." That is, if you want something and you think you made a reasonable offer for it, be prepared to say "no" if you do not get the price you want.

Back in the day, that is how people bought automobiles. They would go into a dealership and get a price, then walk out if the price were too high and go to another dealer to see if that dealer would beat the first dealer's price. Some people still buy cars that way, while others think that comparative shopping on the internet is sufficient. Remember: the listed price (including the price that appears on the internet) is what the vendor wants for the item, not necessarily what he/she will ultimately get for it (this is particularly true for automobiles, trucks, and motorcycles.)

By the way, that's how auto dealerships fool you. They all will negotiate, but most people fall for their "no-haggle pricing" policy by stating prices on websites. Don't be a sucker. I saved over US$2,000 on my last truck by negotiating hard for a good deal, and by visiting six dealerships in the process. It was a lot of work, but was well worth it!

Anyway, if you make a reasonable offer and can't get it, then just suck it up and say, "no, thanks" and walk away. Most of the time, the deal ends there because most vendors either think that you'll come back and say, "okay, I'll pay what you want" or they simply will not negotiate.

I have some experiences where a vendor said, "no, we will not give you your price" and I said, "no, thanks." Several days later, the vendor contacted me again and said, "do you still want this?" and I replied, "yes, but my price is [same one as before]." The vendor then replied, "okay, you can have it at that price after all." That did not happen all the time, but more often than not, so it is valuable to learn to say "no" and be prepared to stick to your guns.

Negotiation is not hard to do, but requires some courage. Americans on the whole have become spineless in even thinking about negotiating for a price. But as I said above, "you don't 'get' unless you ask" -- so ASK! The worst that can happen is that the response will be, "no." Then you are no worse off than before.

Hmmmm... let me take you to an auction sometime. That's always a barrel of laughs.

Life is short: it's always a negotiation.

1 comment:

Anonymous said...

This is sound advice. I might add another point, however. Don't wait until you absolutely are in need of the item to begin shopping. How many of us shop for vehicles only when our cars are about to fail us? Time can be a great ally in the process.