Wednesday, July 10, 2013

The Worst They Can Say is No: Negotiating for Newbies

Between Grant's constant music & sound equipment shuffle and our days as furniture refinishers, we have learned negotiating. Maybe too well...

Negotiating is critical when it comes to acquiring pieces for reasonable prices.  Paying a seller's asking price will mean overpaying most of the time. 

Many people are afraid to 'haggle' because they don't want to hurt the seller's feelings.  While the first few times negotiating can be uncomfortable, you'll learn that most people are not offended when you ask them about a price.  You might begin to look at negotiating as exciting and see the purchases you're making more as if they were business decisions. (See what I mean about liking negotiating too much?) 

The worst they can say is no.

We do a lot of negotiating from both ends of the spectrum (buying and selling) and have some tactics we use at the bargaining table.  

1) Do not expect the seller to self-negotiate.  This means don't use the classic "what is the least you will take?"  or "what's your best price?" line.  Make an offer with a number attached.  I try to make offers on days I know I could meet.  That way, I can sweeten the deal by offering to meet today (or at their earliest convenience) with cash in hand.  Most sellers are willing to take less if they can get it off their hands quickly and easily. For example, the seller wants $100 for a chair. The most I want to pay is $80, so I email/text, "Hi, I'm very interested in the chair.  Would $80 cash take it today?" The worst thing they can say is no.

2) One of the hardest things for me to learn was what price to start with.  I typically start at around 60% (Half seems a little low to the seller, so I go just a little above it).  I round to the nearest reasonable number (ex. $240 instead of $237).  If they say no without a counter-offer I may or may not bid again, depending on how badly I want whatever it is.  

3) Have a walk-away price.  This will likely depend on how badly you want it.  If you're a furniture flipper, you need to be concerned about your walk-away point because the price of the piece will eat into your profits. For example,  we could sell a china cabinet in just a couple days at our antique booth for $349... regardless of how much we spent on it.  If I got emotional during the negotiation and paid $250, then spent time and money fixing it up, then the store took 15% off the top, my profit is pretty well eaten up. 

4) NEVER come back in at a lower price after you have an agreement. Don't do it.

5) If I'm buying several things, I'll make a "bundle" offer.  For example, the things I've picked to buy at a yard sale total $40 according to the price tags.  I'd probably ask if they would take $25 for the whole lot and go from there.

6) Smile.  Catch more flies with honey!

We suggest using yardsales as low pressure situations to try out your techniques and hone your skills.   More often than not the seller is simply trying to see what they can get for the junk they have around the house before they donate it.   Make an offer. 

The worst thing they could say is no.

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