The Shopping Bags - Shopping Tips & Articles

Negotiating

The art of negotiating is just that. An art. Whether shopping for a set of wheels or a new couch, there are those of us who effortlessly seem to always get a better price or free delivery while others sadly pay full retail. After years of tough haggling with the best, The Shopping Bags are happy to share their top ten rules to effective negotiating.

Do Your Research.
Knowledge is power. The more you know about the market and the product you're shopping for, the more power you'll have. Make sure you know the competitors' prices. Is there a better season to shop for that suit or that car? And what about supply. Is this a product you can buy anywhere or is it hard to find? And don't necessarily accept the first offer, even if it's an excellent one. If the car salesman offers a lower price than you expected to pay, you might want to do a little more research on the car you're considering. Go away and think about it.
Bid Low.
It might seem obvious, but it needs to be said: Never offer the highest price you'll pay right off the bat. Even if you'll pay $500, offer $400. You never know! But don't make an offer that's so low it's insulting to the seller. And Real Estate Agent Tom Gradecak points out that how you negotiate should depend on the current market. When buying a house, he says "if it's a seller's market, your negotiating power is weakened because there will always be someone behind you willing to pay full price.
Understand How the Merchant/Salesperson Gets Paid.
Some salespeople get kickbacks for selling certain brands so that might be why they're pushing Panasonic over Sony. And if a salesperson is commission based, they might be willing to forgo part of their cut to make the sale, to prevent you from going to another dealer.
Understand the Motivation of Your Seller.
Are they overstocked? Understocked? Maybe that car has been sitting on the lot for months and they really want to get rid of it. That could mean a better price for you. Understanding why a person is selling something will give you a clue as to how much leeway there is on the price. For example, a homeowner in Vancouver who's starting a job in Ottawa next month might be anxious to sell. An anxious seller often means a better price for the buyer.
Compromise.
Don't be set on getting everything you want in a deal. Chances are you'll be disappointed. Prioritize. With the car example, maybe air-conditioning is more important than colour. You need to have this figured out before you begin the negotiating process. Giving up some features to win others is the name of the game. And there are more ways to get a discount than from slashing the price tag. Maybe you can't get $50 taken off the price of that tennis racket, but will the salesperson throw in a few cans of balls? If the car salesman isn't budging on the sticker price, will he throw in a CD player and give you a free tank of gas? Those little things add up.
Negotiate a Price, Then Offer Cash.
Ah, the cash card. This is Anna's favourite negotiating tool. That new laptop is $2,300 and you've negotiated the price down to a cool $2,000. Now ask what kind of an extra discount you can have if you pay cash. Chances are you'll get another few bucks off. The reason? Merchants pay a fee for every credit card transaction. If you eliminate that fee, they should -- and many will -- pass along some of the savings to you. Many merchants will deduct the price of tax in this scenario.
Be Cagey.
Keep your cards close to your chest. If you're going to pay cash, don't reveal that too early in the negotiating process - do it after you've negotiated a better deal. Or if you're selling your house, don't let potential buyers know you've got to have the thing sold within a month because you're moving. Or if you're planning to buy the car as opposed to leasing it, save that detail (because leasing costs dealers money) until the end to see if it can help get you an even better price.
Do it in Person.
You're much more likely to have a salesperson stay true to his word if you deal with them face to face. It will feel more personal and you'll have a better feeling about his honesty when you deal in person and can see the surroundings. And don't forget to shake on it before you sign the contract or hand over your cash!
Be Prepared to Walk Away.
This one is Kristina's forte. She really sticks to her guns! When you're negotiating over price you've got to know your bottom line before you start haggling. And remember that chances are you'll either find what you're looking for somewhere else or that the salesperson will call you in two days accepting your offer. But if you say, "that's my final offer", you've got to be ready to make it so!
Be Nice.
While we're listing this as tip number ten, being nice is vital to the successful negotiation. Many people believe that to be a good negotiator you've got to be tough and aggressive. Wrong! "If a listing agent comes in with guns blazing and being super aggressive, egos can get in the way", according to Gradecak. Make friends with that sales rep. Be interested in who he is. Even ask for his advice. The more they like you and feel comfortable with you the more they'll want to do business with you. The key here is to never let the salesman know you're negotiating!

« Back to Tips & Articles