Change Perceptions To Become A Better Negotiator

whats the point of buying from a place like craiglist if you're just going to offer a "fair" price. You can just go to the store and buy it for the store's "fair" price.

If you want to save money, you SHOULD lowball just for the sake of lowballing. You don't know what the seller is willing to let the item go for if you don't test them! If you know an item is worth $20, but the seller thinks it's worth $12, then why start at $18? The seller will accept without hesitation! You should offer $7 and work your way up to a happy medium.

Buyer's... start low and work up.!

atomicrabbit

My best negotiating on price tends to include my knowledge of how cheap I can find it new from an online retailer. I also point out to them how long they have had the item sitting around and how great it would be for them to finally get it sold.

Here are a few thoughts on negotiations, whether on craigslist or elsewhere. I'm sure I'll repeat a few thoughts from others' comments:



1. Know the going price of the item elsewhere, as well as the rarity of the item. This will help you to determine a reasonable set of expectations, as well as spot prices that are too good to be true.



2. Know the maximum you are willing to pay BEFORE you start negotiating. This is your "reservation price", the point at which are you indifferent between the item and the money. Anything above this, and you're better off keeping your money. Anything below this, and you've negotiated a good deal.



3. Figure out what you'll do if you don't make a deal. This is your "BATNA", the best alternative to a negotiated agreement. For example, if I want to buy a camera but it turns out to be too expensive, my BATNA might be to borrow a vacuum from a friend. Alternatively, suppose I need to get flowers for an anniversary, and I'm talking to the only person in town who has flowers. My BATNA might be to get some other kind of gift, which might be a poor substitute. This makes getting the deal done more important.



4. In a related point, think about walking away ahead of time. If you convince yourself that you HAVE to have the item in question, you're likely to adjust your reservation price on the fly, which is always a bad idea. This happens with frequency in timed auctions, where people tend to incorrectly perceive scarcity and feel urgency just because the auction is about to end. Just before the end of the auction, the adjust their reservation price upward and end up paying more than they really wanted to. This can lead to a "winner's curse" scenario. If you've already considered walking away, you're much less likely to get into this situation.



5. While we're on the topic of walking away, don't walk away in order to convince the other person to lower the price. This kind of "brinksmanship" is a hard-ball tactic that isn't usually a good idea. It makes people upset and less likely to be rational.



6. Understand who you're negotiating with. If this is someone with whom you might negotiate again, you need to take this into account. If you establish a positive, productive relationship with a seller, they often remember that going forward, and may be willing to give you a better deal or advise you of interesting items before putting them up for sale to the general public. Plus, you might build up some good karma by treating others well. If you are POSITIVE this will be a one-time deal, you might be willing to push a little harder. Think carefully about this.



7. Understand what you want to get out of the negotiation, and if possible, find out what the other person wants. Sometimes, it's just about the money, but often, there is more to the story. Let's say you're buying a puppy. Maybe the person selling the dog just wants to get rid of it or make a little cash, but maybe they are really attached to the puppy. In that case, they may want most of all to "find a good home" for it. Can you give them some assurance that your home is the one? Maybe talk about why you want a dog and what it will mean to you to have one.



8. Determine whether money is the only way to trade. If cash is an issue, you can ask the other person if they'd be willing to trade or accept something else in lieu of money. If you're buying a camera, for example, and are an avid photographer, you might be able to offer to take and print a family portrait for the seller in exchange for the equipment. The more you know the other person, the easier this is.



9. Know yourself. Negotiating in person isn't always better--it depends on your personality. Be honest with yourself: are you a people-pleaser who is likely to cave in on a negotiation in order to avoid conflict or make the other person happy? If so, an email negotiation might be better. On the other hand, if you want to use some of the other points above, it will be much simpler in person.



10. Practice, practice, practice. Opportunities to negotiate exist everywhere, not just in purchases. The more comfortable you get, the better you'll be.

sweetmonkey

Whenever I sell something on Craigslist, I always post it for more than I think it's worth, simply because I know people are going to try to negotiate the price down regardless of where it starts at. If I want $100 for something, I put it up for $120, and let them think they talked me down to $100.

ap0

@Ferguson1015: As I buyer, I often do the same thing. I set a price that I'm willing to pay for a given item, I won't buy it for more than that price. This applies whether the price is negotiable or not. If I enter a clothing store to buy a coat for $130 or less, and I don't find a coat I like for that price, I'll leave the store and look elsewhere. I fully agree that you shouldn't act like you're walking away unless you're willing to do it for real, but you should always willing to walk if you can't come to an agreement.

I guess you should also wear a "Billy Mays' Blue" shirt (see picture). No wonder he was such a good salesman.

@Skorpeyon: At the same time, I was walking through the restaurant strip near the local theatre district a few weeks ago, looking for an early dinner, at about 3pm on a Sunday. As our group of four looked at the exterior menu at each restaurant, a host came out to try to entice us inside. Realizing that they were in the slow part of the day, once we had a restaurant picked, I asked the host if he'd give us the dessert for free if we had dinner and drinks in his restaurant. He agreed without hesitation.



I think at the end of the day, it's often possible to negotiate to a win-win situation.

This means you shouldn't hesitate to haggle where appropriate.



(Emphasis mine) Yeah, that last little bit is what most people seem to forget. I've seen people hold up the line at places like Wal-Mart trying to haggle the price of an item, annoying everyone behind them in line.



I think someone needs to make a list of when it is appropriate for those kinds of people.

Skorpeyon

Also, Prepare before you have to haggle, look for what the products are going for at a couple of places, few things are as convincing as telling someone just how much cheaper they are getting the product than so-and-so place (people tend to want to be fair so they will settle on a number close to what it is normally sold for).



Set a line that you are not willing to cross and don't let anyone convince you to go lower than this. Don't hesitate to have no deal.



Finally, don't act like you are walking away from a deal just to get someone to raise their offer unless you are actually willing to walk away at that point. It may look good on TV but it's not necessarily that successful in real life (unless you're Donald Trump).

Ferguson1015

"A few guidelines: Don't lowball without providing a solid rationale. Negotiate in the most personal medium possible—in person, preferably, but on the phone can work too. And play to their reactions."



That's it?? That's the sum total of their advice?

sdn

I'm surprised this article would show up on a site with a large readership consisting of freelancers. I think we're all acutely aware of the "can't pay much because of the recession tactic".

Use care when defining your increment. Salesmen can suss out the price you're actually willing to pay by coaxing you to define the increment you're willing to deal in. If the salesman says, "That's a hundred bucks," and you say, "I'll give you 75," the salesman knows you're willing to pay somewhere in the middle, and that you're thinking in five dollar increments. Throw them off. Offer them $63.50. It will totally break their rhythm them and throw them off their game.

seiun

@sweetmonkey: Great advice (especially the bit about finding other means of arriving at an agreement than money), but I'd like to add a few things too.

A.) Always have a good reason for why you want to offer less than the asking price. This can be anything, from a lower price for a comparable item elsewhere to your budget constraints, but if you're not willing to discuss and negotiate with the seller it's unlikely you'll reach a deal. On the flipside, if you're selling something, you should definitely have good reasons for why you're asking what you're asking.

2.) When you drive a long distance to check something out and possibly buy it, you will nearly always be at a disadvantage. The seller knows you're less likely to turn around and drive home empty handed, so often the room for negotiation is trimmed down. Although this technically violates the fact that sunk costs are irrelevant and shouldn't be factored into decision making, it's hard for a lot of folks to keep this in mind and so it still applies. Best way around this is to negotiate before hand as much as possible. Also, use this to your advantage when selling.

D.) The more complex and unique a product is, the more opportunities there will be for negotiation. Don't miss out. I find the best way to make sure I cover all my bases when negotiating for a big thing is to make a list before hand of my "must-haves," "my wants," my "don't-cares," and my "must-avoids." Then I'm careful to search only for products that fall in those categories and fulfill my specific criteria. When negotiating, this list also comes in handy for helping come up with what something is worth to me, since I have a whole list of my priorities right in front of me.

JohnnySaber

@UnMicD: That is an excellent idea. I'm gonna try that...

JohnnySaber