You're in the market for a new television, and you spot a great flat-screen model. It's the right size and the latest technology―but the price is too steep. Do you splurge or walk away? The answer: neither. Instead, find a salesperson and start negotiating. In today's buyer's market, virtually everything, everywhere, is negotiable, and landing a bargain is not as difficult as you might think. Whether you're a novice, nervous or simply unsure how to strike a deal, this guide tells you what you need to know.
LEARN THE GROUND RULES
Use smart strategies to land a deal on practically anything.
1. Identify your limit. Come up with three reasonable figures: your wish price (what you'd consider an amazing deal), your goal (what you're willing to pay) and your price ceiling (you won't pay a penny more). Name your wish price to begin, and don't go past your limit.
2. Research prices. Before you set foot in a store or on a car lot, or meet with a contractor, do your homework. Search the Internet for the price range of the item or service you're looking for. Print out related ads and note competitors' prices. Bring the figures with you. The knowledge can help you be a smarter haggler.
3. Be friendly and remain polite. A nice attitude and a smile can go a long way. Think of it as a game. You're more likely to have fun and to reach a good deal if you engage in a little give-and-take. However, you don't want to make a big show of it, so find a quiet place to chat.
4. Negotiate with the right employee. The salesperson says she can't lower the price? Ask to speak to the manager. Higher-ups tend to be more concerned with customer retention than their own commission, so they're easier to talk to.
5. When in doubt, just say no. Don't get too attached to an item, or feel that you owe the seller. If you're not getting the price you want, leave.
6. Use silence. Listen 70 percent of the time and talk only 30 percent. If you don't quickly respond to an offer, the seller might sweeten the deal or blurt out something you can use to your advantage, such as, "Actually, we're having a sale next week."
7. Play it cool. Your heart might be set on a certain home-theater system, but don't let on. Look over several models before gesturing to your favorite and saying, "This one's all right. I might be interested if you come down a bit on the price." If you seem uncommitted, the salesperson is more likely to give you a deal on the model you want.
MASTER THE ART OF NEGOTIATING
Put your new skills to work in any situation with these tailor-made tactics.
CAR, HOME, FURNITURE AND ELECTRONIC DEVICES
If you want a big-ticket item...
- Start low. Always offer less than what you're willing to pay so you have wiggle room (exactly how much less depends on the market―do your research!). From the seller's standpoint, a low offer is better than no offer.
- Take your time. Don't let aggressive salespeople rush you or convince you that you've got only one chance to get a deal. For a big purchase, it's a good idea to walk away from your negotiation, if only to remind yourself that there are other televisions, cars and homes out there. To avoid jumping the gun, decide beforehand that, no matter what the offer, you're going to sleep on it.
- Use your imagination. If the seller won't meet your price, ask about other ways she can sweeten the deal. For example: "If I buy the couch and chair at your price, would you throw in this rug and free delivery?" or "I'll pay what you're asking for the house if you close escrow within 30 days and share the closing costs."
HEALTH CLUB, INSURANCE, PHONE AND INTERNET SERVICE
If you're signing up for monthly services...
- Use "the squeeze." Find out competitors' prices, then ask your first choice to go lower. Say, "You charge $70 a month, but the gym down the street charges $50. I'll sign up with you today for $45." Businesses often drop their prices to beat the competition.
- Consider bundling services. Many companies that provide multiple services give a big discount if you sign up for several (such as phone, Internet and cable) at once.
- Make a commitment. Monthly providers often offer a discount to retain customers. Ask if you can get a better rate if, say, you sign a two-year contract rather than a one-year deal.
HOTEL STAYS, CAR RENTALS AND SOUVENIRS
If you're traveling...
- Keep negotiating. When booking a hotel room or rental car, ask about special rates (corporate or student, perhaps). Then, at the rental office or hotel, ask for an upgrade (a nicer car or bigger room) or a free extra such as breakfast.
- Mock shock. It might sound dramatic, but if you visibly flinch or even laugh at a first offer, then return a similarly outrageous lowball offer, it shows the seller you're not willing to pay the "clueless tourist" price.
- Buy more than one. Sellers often lower prices if you buy in bulk, so load up on souvenirs at one shop. If shirts are $15 each, offer $35 for four. If not, hit the next store.
LANDSCAPER, HOUSE PAINTER AND BABYSITTER
If you're hiring someone...
- Collect bids. Get quotes from three people. If your favorite doesn't come in lowest, say, "I want to hire you, but you're too pricey. Can you come down a bit?"
- Be flexible. Ask the person to pinpoint his busiest time, then ask to hire him during an off-peak period―for a discount.
- Offer a guaranteed gig. Negotiating with an in-demand landscaper? Promise to use her a set amount of times per month or year if she meets your price.
TIME IT RIGHT
Try to enter a store near closing time to entice the seller to make one last sale―or during a lull when you know you'll have her undivided attention.
CLOSE THE DEAL: Try these nimble moves to bring the bargain home.
- Give up something small. Before you shop, decide what's important to you and what isn't. If you're buying a car, maybe a top-of-the-line stereo system is a must, but the color isn't as critical. While negotiating, "reluctantly" agree to take the car in silver if the seller can upgrade the stereo for free.
WHY IT'S EFFECTIVE: If you appear to compromise, the salesperson is more likely to bend as well.
- Offer fast money. If you're nearing a deal, pull out cash and say, "I'll buy this from you right now, in cash, for $X."
WHY IT'S EFFECTIVE: Credit-card companies charge fees to sellers. The promise of a quick, simple cash sale is a great motivator to lower the price. Plus the sight of you taking out money indicates that you've reached your top limit, and if the seller doesn't meet your price, the transaction might dissolve.
- Play good cop/bad cop. Whip out your cell phone and call your husband or a friend―or fake the call for effect. Then hang up and tell the seller that you can make the deal only if the store comes down a certain amount on the price. Suddenly, you're not the tough guy.
WHY IT'S EFFECTIVE :This tactic puts the ball in the seller's court, and the salesperson won't take it personally since your hands appear to be tied.
- Walk away. This is a gamble, but if you're not getting the price you want, restate the amount you're willing to pay, give the salesperson your number and tell her to call you if she can meet your price.
WHY IT'S EFFECTIVE: You're proving that you don't need the product, at least not that day. But a salesperson does want your money. After some consideration (or a consultation with a manager), she might call you back with a deal.
Sources: Ed Brodow, author of Negotiation Boot Camp; Herb Cohen, author of You Can Negotiate Anything; Peter B. Stark, coauthor of The Only Negotiating Guide You'll Ever Need