We have talked over the last few months about different ways to save money. Our discussions have ranged from budgeting to saving on groceries. In thinking about our discussion today, I wanted to talk about a different aspect that many overlook. As consumers we naturally want a deal, but sometimes we believe the price printed on the tag is the price that we must pay.
However you should consider whether or not that is a truly accurate statement. You can negotiate pricing anywhere. So let’s begin talking about the five tips on how negotiating can save you money.
The first tip is to know Where Negotiating Works. As we briefly discussed, negotiating won’t work everywhere. It will work at establishments that have sales people that work on commission and driven by quotas. Negotiating works best at these types of businesses:
- Construction/ maintenance – This covers your yard maintenance and construction projects in and around your house. They are hungry for work and you should get a deal that you are comfortable with.
- Car Dealerships – It is amazing how much you can save if you are persistent enough.
- Appliance/ Furniture Dealers – The larger purchases typically have more wiggle room as you buy more.
- Flea markets/ Farmers Markets – If you haven’t been to these, you need to go.
The second tip is to Know Your Price Point. Once you have an idea of what you want to buy, you need to be prepared for how much their asking price is going to be and how close that is to what you want to spend. The best resources to do your research before you begin negotiating are:
- The internet – this is the obvious one. It is also the most powerful. Depending on what you are trying to buy, you will be able to find out how much your product or service should cost if you bought it from somebody else. What you find however isn’t necessarily the lowest you can get.
- Quotes – Getting competing quotes from multiple vendors/ companies is a great way to make them feel they are competing for your business. The gamification of winning your business can be to your advantage.
- Advertisements/sales – Most companies are keeping up with their competition’s pricing. You will find that time to time you can use a sale price to get the other company to do better.
- Referrals/ word of mouth – If you know someone who has purchased a similar product or service recently, discover what their process and research discovered. This shouldn’t replace your own research though!
The third tip is to Be Prepared for Hidden Costs. Car dealerships are the worst at this. If you aren’t careful, you may be negotiating down one price while they are in turn increasing another cost that you will have to pay anyways. Hidden costs need to be research just as thoroughly as the price of the product or service. Hidden costs that typically go unnoticed until it is too late area:
- Free trials – The trick here is that you have committed to the service, but the first 30 or 90 days are free. What they don’t explain is that after the trial period, your credit card is charged for the reoccurring monthly fee. You have to go through a process to stop this. It doesn’t stop on its own.
- Warranties – I am not saying that warranties or extended warranties are bad. However you need to be prepared for the question and the associated cost prior to them asking. Do you really need to spend $30 for a two-year warranty on a DVD player that you paid $50 for? No! However, they will ask you.
- OnStar/ Sirius – When you purchase a car now, they have made deals with some companies to preload your vehicle with their product. You typically get it free to try it out, but make sure you will actually use it before you start paying for it.
- Delivery charges – I have found that occasionally the discrepancy of delivery charges between two companies could change by decision.
The fourth tip is to Let Them Set the Price First. This is the stare down at OK Corral. They want you to name the price because you may be higher which would give them more of a profit. Don’t get trapped into that. If you have done your research, you will know where they should be starting from. This is important because:
- Anchor price – Their first price becomes the anchor by which you can go down from.
- Negotiating parameters – By doing this you have given them notice that you are here to negotiate the deal that you want.
- Confirms your research – You can devise your negotiating based on where their pricing is to what you found in your research.
The fifth and final tip is to Be Ready to Walk Away. To all you potential buyers out there, the number one key to any purchase is to not get emotionally attached to a purchase. Doing so will set you down a path of an impulse buy. You must always be willing to walk away from any deal. Consider the following:
- The deal has to be right for you – They will always make money on a deal or they won’t make it! So don’t worry about them. Instead make sure the deal works for you.
- Emotional attachment puts money in their pocket – If you fall in love with that car and openly express how much you want it, they will pounce. This will trigger them to be tougher on their negotiating, knowing that you won’t leave without your dream car.
- Time – The backyard makeover is going to be costly, but you need the right deal. Making a fast decision may leave tons of potential savings in the contractor’s pocket. Take your time to consider it. Most times, they need your project more than you need it and they will come down to your price.
Be sure to support our podcast by sharing it with others and rating our podcast on iTunes. Ratings helps us keep our podcast visible, giving other a chance to check our podcast out. A special thanks to those that have already provided a rating.
If you’d like to comment in this episode, please go to the bottom of this podcast. We look forward to reading your comments.
Don’t forget to check out the resources page to get access to some of the tools we have made available to our audience.
We are glad you joined us. Now go live one badass life!