Sunday, November 7, 2010

The Fine Art of Haggling

There is an old saying that goes, “Everything is negotiable.” Well, sorry if I burst some bubbles, but this simply isn’t true. That being said, however, there are times when price negotiation is not only acceptable, but often expected and sometimes even encouraged. And that is the time to haggle.

Just what is “Haggling”? Well, in a nutshell, it is nothing more than a negotiation between a seller and a buyer regarding the price of an item the buyer is interested in purchasing. However, as noted above, not everything is negotiable. And, not every situation is amenable to negotiation, nor is every seller (or buyer for that matter). It is important to have a good understanding of just when, where and how to haggle, and such is the focus of this article.

The “where” is fairly easy, as is the “when”, although unfortunately, many people don’t understand this and feel that every situation and every item is negotiable. I would not necessarily recommend haggling with the clerk at Wal-Mart or K-Mart over the price of eggs, a head of lettuce or a gallon of milk. It simply isn’t appropriate, generally speaking. It may be okay to negotiate a price on hotel or motel rooms, bus ticket, plane tickets, or train tickets if the situation calls for it. For example, if you require something such as these during the “off season” or off days of the week, then it is perfectly okay to ask for a reasonable discount, but not to try a hard negotiation. Many places such as these will agree to a discount if you simply ask in a respectful manner. They may tell you no, and if so then respect their answer and don’t go into bargain hunter mode. Remember, you draw more flies with honey than with vinegar.

However, the purpose of this blog is to talk about antiques and collectibles, so we will focus on haggling as it pertains to these areas. It is perfectly alright, and often expected to haggle, or negotiate, for a better price when you are at a yard sale, flea market, estate sale, swap meet, rummage sale, antique store, and even some thrift stores. You can even negotiate when purchasing antiques and collectibles online when they are listed with a set or buy-it-now price. But as always, remember the basic rules of engagement here. Don’t be cheap, don’t be petty, don’t be mean, don’t insult, and don’t lie. You should be pleasant, cheerful, courteous, respectful, and above all, honest (as I said, you get more flies with honey than with vinegar).

Many sellers in these venues will be firm on their prices. If so, respect their decision not to negotiate. Remember, they do own the item, and they are perfectly within their right not to negotiate. However, many sellers in these venues are amenable to negotiation, and all you have to do is ask. Often the best thing to ask is, “are you firm on this price?” or, “Is this your best price?” Quite often the seller with come back with a lower price, and if so, then the game is on. More about how to haggle later”

Quite often, buyers feel uncomfortable trying to negotiate a better price on an item. I suppose the primary reason for this is the society and culture we live in. In many cultures, haggling is part and parcel of everyday life. Not so here in America. People often feel that hagglers are just too cheap to pay full price, and some even feel that haggling is a sign of poverty, that the haggler cannot pay full price. In a society such as ours where we are encouraged either by our parents or through the media (or both) that we must “keep up with the Joneses”, people are embarrassed by any semblance, real or imagined, of poverty in any form. Appearances are everything we are taught, and it is this mindset that often keeps people from negotiating. Most sellers are aware of this, and so they will not advertise that they are willing to haggle. In essence, they are counting on that societal peer pressure that many are affected by to maintain and/or increase their profit margin.

However, if you approach haggling (or negotiation, if you prefer that term) in the proper mind set, and view it as a social interaction rather a strictly business interaction, you will find that it can not only be profitable, but enjoyable as well.

How to haggle, or, The Rules Of Engagement. As I mentioned, the seller is not, I repeat, NOT, going to immediately offer a lower price (unless the item is already on sale). It will up to you, the buyer, to break the ice. In a typical haggle session, the conversation might go something like this:

Buyer: “How are you today? Great day for a yard sale!” (or estate, etc)

Seller: “Yeah, so far so good. I’m hoping it doesn’t get to hot (or windy, or rain, etc).”

Buyer: “I’m looking at this widget and I’m wondering if this is your best price?”

Seller: “I might come down some. What did you have in mind?”

Buyer: “I was thinking of somewhere in the neighborhood of $12 or $13. What do you think?”

Seller: “I was asking $20, but I might be able to come to say, $18.”

Buyer: “How about we meet around the middle and say $16?”

Seller: “I think I can do that. Okay!”

The buyer has just saved $4 on a $20 item. Pretty easy actually, once you get past the ice breaking stage. Now, every situation is different, every venue is different, and every seller is different, so quite often you will have to play it by ear. However, the basic scenario is still the same. The seller may also stick to his guns, and refuse to budge on the price of the widget. If so, then the ball is in your court. You must decide if you want the widget at the seller’s price, or walk away from it. The important thing to remember is, once the seller tells you “no”, then you should respect his or her wishes and not continue to haggle.

As easy as it is, there are some rules that you should learn and remember before you start haggling.

#1. Know the value. First and foremost, know beforehand what the absolute maximum your are willing to pay for an item is. The seller already knows what the minimum he will take is, and it is in his or her benefit to get as much as he or she can. So know ahead of time what your bottom dollar amount will be as well, and don’t go beyond it. Not even by a penny. If you ignore this basic rule, you will be out of money in no time at all.

#2. Do your research. This is in direct relation to point #1 above. And even more important If you are buying to resell. Your profit margin is directly affected by the amount you pay for something. It doesn’t matter if the seller knows what an item is worth or not, and don’t try to “educate” the seller about the value of his item. All that will do is serve to alienate you from the seller. There are several factors related to the value of an item, and one of the primary factors is the sentimental value of the item to the seller. That ring you are looking at that may only be worth $20 retail, may have belonged to the sellers grandmother who recently passed away, and in the seller’s mind, the $200 price tag he has on it is more than reasonable. Try to think of it this way, even though the ring is up for sale, the seller may not really be ready to sell it, and subconsciously hoping it won’t sell. Again, be respectful and courteous. You know that ring probably won’t sell, and it would not hurt to leave your name and number with the seller, telling him to contact you if he changes his mind. He may and he may not. Either way, it’s okay!

#3. Do your research, part two – When doing your research, do not rely on price guides! I cannot stress this enough. They are great for learning how to identify a piece, and in fact they are invaluable for this. But the prices listed in these books are out of date by the time they are published. In reality, an item is only worth what someone is willing to pay for it. There may be an average retail price, but it will vary according to the geographical location of the retail sale (some items sell or more in some areas than in others), as well as the retail venue (items on ebay will retail for less than in a high end auction for valuable pieces). The time of the year, the season, is also a factor affecting the retail value of the item. All of these variables, and others, must be taken into account when determining what an item is worth, as well as how much you are willing to pay for that item.

#4. Know when to walk away. If the price of an item is too high, and the seller is not willing to negotiate, then the best course of action is to walk away. Don’t be rude or insulting about it, and in fact, it may be a good idea to leave your name and telephone number with the seller in case he or she changes their mind, or possibly has similar items for sale that haven’t been put out yet. I never hurts to do a little self advertising.

#5. Know where you are in the food chain. I wasn’t really sure just where to put this, so here is as good a place as any. Actually this all goes back to knowing what an item is worth, and is another aspect of those principals. It is important to know and realize where you are in the “food chain” so to speak. And this is really for sellers and buyers alike. I cannot tell count the number of times I have read negative reviews on the television programs American Pickers and Pawn Stars. The primary complaint being that either the pickers or the pawn stars are taking advantage of their customers. People will point to a show such as Antiques Roadshow, and say something like, “I just saw that same thing on American Pickers and they only paid $100 for it, and here on Antiques Roadshow they are saying it’s worth $400! Those pickers are rip offs!” The fact of the matter is, they’re not. They just know their place in the antique and collectible food chain. The pickers pay $100 for an item. They are happy with that price and the seller is happy with that price. That’s all that matters. But go on up the food chain, the pickers will then sell the piece to a dealer for $200. They have made $100 profit. If they had paid $200 for the item initially, they would not have made any profit. The dealer will then sell to item to a customer for $400, making a $200 profit. By now it should be clear how this all works. As you work your way up the “food chain” the item increases in value. So, it is important to know where you are in the “food chain” when determining the value of an item.

#6. Bundling. Quite often, it is easier to negotiate a deal when you purchase more than one item. I know people who even purchase entire yard sales, just to get a few items that they know are valuable, and they will then sell those items they do not want at either a flea market or at their own yard sale, often making a profit while doing so. So don’t be afraid to pile up the items and then make an offer on the entire contents of your pile. You will be surprised at how quickly many people will be willing to negotiate a better price for you because of this.

#7. Pay Cash! As the old saying goes: “Money talks and…”, well, you get the idea. People are more willing to negotiate a deal when you are offering cash money as opposed to a check. I have been to sales where one person is interested in an item, but does not have enough cash, and so asks if the seller will take a check. Noticing that the seller is hesitant to accept the check, another buyer will step and offer to pay maybe 10% less, but also to pay in cash. Sometimes this doesn’t work, however, and the practice can quickly offend people, so be careful if you use this tactic. A variant of this tactic did, however, net me a good deal. I watched a seller hesitantly accept a check for a table from a customer. I later struck up a conversation with the seller, and mentioned that I too was interested in the table, and would have been willing to pay cash, although not quite as much. The seller then told me that he had another table similar and asked if I would be interested in looking at it for the price I had mentioned. I said yes, and was able to purchase a better table for far less. No one was offended and everyone got what they wanted.

#8. Appearances. It has been said that appearance is everything, and the same is true when negotiating. First, don’t wear your best clothes when yard or estate sailing. If you look like you have money to spend, the seller will be less inclined to haggle. Second, appear as if you are somewhat disinterested. If you appear too eager to purchase an item, the seller knows he’s got you. He knows you are going to buy the item and that you are going to buy at his price. Any attempts at haggling or negotiating are merely a formality, and will be pointless. If you find an item you want, pick it up and keep it with you, but do not keep looking at it, do not show off to your friends, do not act like it is the find of a lifetime even if it is. Act as if it is just another item. When ready to pay for your item or items, then you can either negotiate for the item individually, or as part of a bundle of items.

#9. Stay in control. You can expect to be pressured by the seller to purchase the item he or she thinks you may be interested in, as well as other items you may not be interested in. I went to one sale where the seller knew I was interested in depression glass. She began telling me the history of all the glassware she had for sale, about how it had all been her mother’s and it was all old. I saw nothing that really excited me (and all the glassware was way overpriced), so I went to look at some other items. The seller kept after me, and kept after me to purchase her depression glass. I was heading toward the door, and still she kept it up. I thanked her, and left. So, it can and does happen. Nothing says you have to buy anything, but if you do, staying in control will help you when you are ready to negotiate. There is nn unwritten rule which says that whoever makes the first offer looses. And quite often that is true, so stay in control, and don’t be in a hurry to throw out your final amount.

#10. Point out problems. When negotiating, it can often be helpful to point out any imperfections in the item you are interested in. Stains, discolorations, ships, cracks, repairs, anything that makes the item less than perfect. Don’t do this in a negative manner (which can be difficult to manage), but point these “problem” areas out as things you are concerned about. You might say something like, “I see that this piece has a crack running through it, is it still safe to use?” Or, “I see that there is a stain on this. Do you think it will come out?” Something along these lines. What this does, is, indicate to the seller that although the item is less than perfect, you may be persuaded to purchase it if the price is knocked down enough. This tactic works especially well if other customers over hear your concerns, and if the seller is aware that other customers now know about the items problems. If the seller thinks that you may now be the only one even remotely interested in that item, he or she may be ready to negotiate with you just to get rid of the item. This tactic worked for me when I was negotiating on a set of scrapbooks. I was also holding a vintage Frankoma ashtray from the early 1950’s. When it appeared that I was not going to purchase the scrapbooks, the seller offered to throw in the ashtray for free, if I would buy the scrapbooks. This is what I was hoping for, and I purchased the scrapbooks for $35 (they were initially asking $100) and the ashtray was free. I was happy, the seller was happy, and the individuals I later sold the scrapbooks and the ashtray to were also happy. And that is always the desired result of haggling.

Well, I think we’ve about covered the essentials of haggling here. When and where to haggle and when and where not to. Some of the essentials to actual negotiating (remember, only the unscrupulous are out to take advantage of others, and it is always best to steer clear of them); and that haggling or negotiating is a legitimate practice and is in no way derogatory to anyone’s character if done correctly.

Haggling is an art, and one that can be mastered only through experience. So get out there and start making some deals! And if you need a little practice, (remember what I said about a little self advertising…) then come on over to the Trading Post, because I am always ready to do a little haggling!

Take care and I’ll see ya around!

1 comment:

Brenda aka granny7x said...

Hi Jack..its me brenda Di Domenico Moultrie..aka granny7x on bonanza.anyway read your haggling blog and how interesting I found it to be...very informative..sounds like you've been doing this for awhile..thanks for all the tips..