Everything Is Negotiable

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"I can’t stress the importance of obtaining as much information as possible on the item for sale and the atmosphere surrounding the sale."
The word negotiation scares many people for some reason. I believe it is the thought of face-to-face confrontation that frightens many. For others it may be personal insecurity or, possibly, the fear of insulting someone. I know I’ve personally experienced all of these feelings when involved in negotiation, and I don’t think I am unusual. If you are making a conscious effort to avoid situations where you are required to negotiate, or if you simply do not negotiate at all, even if you have the chance, one thing is clear: Failure to negotiate as much as possible is costing you money. Regardless of what you may think, you negotiate every day; you may not realize that you are doing it, but you negotiate all of the time. We tend to think of big-ticket items like cars and houses when we think of negotiation, but anyone who has ever traveled outside the United States knows buying something as simple as a Mexican leather belt, for example, can lead to negotiation that would make some international treaty talks look like child’s play.
In many countries around the world, negotiation between buyers and sellers over every purchase—even for seemingly insignificant things like fruits and vegetables—is part of the culture. Negotiation over price is expected. Recognizing that most interaction between humans includes some form of negotiation will help you become more successful in life.

If you understand that negotiation, just like using coupons, can generate wealth for you and your family, you will find yourself actually looking for chances to negotiate.
With negotiation, in a matter of minutes, you can earn thousands of dollars. Most of us work hours at our jobs in return for dollars. With proper negotiation, you can create dollars in a very short time period. This is called time leverage and it is how people get rich. For example, suppose you are paid $10 an hour at your job. You work one hour and are paid $10 minus taxes. Now, let’s say you have just saved $50 in five minutes using negotiation to get a lower price on something. Your salary for that hour would be technically $600 or, $50 earned in five minutes, times twelve. I think you are worth that kind of money. Don’t you? Benjamin Franklin said, "A penny saved is a penny earned." Actually, a penny saved is better than a penny earned because you do not pay tax on that earned income. I can guarantee you this: As long as you are only paid in direct proportion to your physical time investment, you can never become wealthy. Hourly workers have no way to leverage their time. They work one hour, they get a set wage for that hour. No more, no less. Using all of the principles in this post will allow you to leverage your time as well as generate lots of extra cash flow. This often-used quote in the tax preparation business works just as well in the business of paying less for everything. "In the end, it is not how much you earn, but how much you keep." There are plenty of millionaires who have spent themselves into bankruptcy. Poor spending techniques are what did them in, not lack of income.

Obviously, to become good negotiators, we have to understand what good and bad negotiation is. Negotiation, or compromise, happens between people every day. It occurs whether they know it or not. Negotiation occurs when you get up in the morning, on your way to work, at work, at lunch, at home—everywhere. You probably negotiate with yourself more than anyone. For example, when you tell yourself it is all right to eat the bowl of ice cream for dessert because tomorrow you will jog an extra mile, that is negotiation. A win-win situation if I have ever heard of one, as well. Children are natural negotiators. Have your children ever ignored you when you told them to get ready for bed? That is a form of negotiation. It is a primitive form, but a form nonetheless. They are trying to communicate to you what their position is at the moment, which is, I don’t want to do what you want me to do right now. Perhaps you have a teenager who wants to borrow the car. Have you ever noticed how all the chores get done, and even some extras, on the day your child plans to ask you for something? Again, this behavior is a form of negotiation. The children will do something for you in return for something they would like you to do for them. Most people, whether children or adults, have underdeveloped negotiating instincts. Because of this, emotional cues such as tears, pouts, smiles, hugs, an extra "I love you," are often genuine emotions, but also can be used to negotiate a position. And, these unrefined techniques work fairly well. Ask any parent. Negotiation is communication between two interested parties, which can occur without any verbal communication, as you will soon learn. Some people may think they are good negotiators because they can browbeat anyone into submission.
Yelling louder than the other guy does not make you a good negotiator.

Tricking someone into doing what you want him or her to do does not make you a good negotiator, either. Good negotiation allows both sides to win. Yes, you are adversaries in a sense, but there is no rule that says you have to be enemies out to do each other harm. Unfortunately, many people enter negotiations with this attitude and it can lead to frustration. An, "all-or-nothing" attitude in negotiation rarely will allow you to achieve the results you want. Good negotiators are people who realize that a spirit of "give and take" is necessary to ensure success. Remember, your goal in "purchase negotiation" is to find out exactly how little you can pay for something. You know what the asking price is in most cases; that number simply represents the most you could pay for an item. A good negotiator is like a detective.

The more information you find out in advance (for example, how motivated the seller is), the better your ability to intelligently negotiate a purchase.
This is the kind of information you want to find out: How did the seller come up with the asking price? How long has the item been for sale? Why is it for sale? How many are for sale? Is there a chance the asking price may be reduced soon? What have others paid for the same or similar item? Is there a similar item available for less money? Is there a competing store offering the same item? If you are dealing with an individual selling a house, a car, or another, similar large ticket item, important answers to find out are these: What does the seller intend to do with the cash? How much does he still owe on the item? What have similar items sold for recently? You should also ask yourself some important questions when entering into a negotiation, as well. For example, "What is the most I am willing to pay for the item? How badly do I want or need the item? Am I willing to walk away from the item if the seller won’t sell on my terms?" Often, what we think is a negotiating point is not material at all. For example, we all naturally assume that price is the primary consideration for both buyer and seller. This is not always the case.

If something has sentimental value to the seller, all the money in the world may not be enough to get him to part with it. Personal feelings can often get in the way of negotiations, creating roadblocks to a successful completion of business. Your personal feelings about the seller, or your first impression of them, can affect your negotiation "attitude." I have found it is always best to avoid judging people on appearance. Remember, the other person’s negotiating experience is most likely limited and they may think, like you possibly thought, that good negotiators are tough, hard, and unmovable from their position. So, they are trying to appear as though they will not be pushed around.
Your negotiating posture is very important as well and is dictated by your confidence, or lack thereof. Your confidence is dictated by your knowledge of the buying situation. I can’t stress the importance of obtaining as much information as possible on the item being sold and the "selling atmosphere" surrounding the sale. That way, you enter negotiations with some idea of the boundary lines in which you are working. There are many great books about the topic of negotiation that go much deeper into the subject than I can go here. I suggest you read the classic book by Herb Cohen, You Can Negotiate Anything, from Bantam Books. Reading about negotiating is important to begin to learn basic strategies. But the real way to become a master negotiator is to take the strategies you learn and practice them as much as possible.

TECHNIQUES OF THE TRADE
There are many simple techniques you can use immediately to improve your negotiation results even if you don’t have a great deal of experience. Many of these techniques will sound familiar to you; they have been used on you many times and you have probably used them yourself either on purpose or by accident. The Mythical Partner or, Third Party technique is the most commonly used tactic by amateurs who probably don’t realize they are negotiating. What they are doing is stalling a buying decision for any number of reasons. I am sure you have used this one, especially if you are married. Statements like, "I need to check with my wife," or "I will ask my husband what he thinks." Businesspeople often use this one with success, "I need to check with my partner [or business associate or boss]." Other variations on the stall are ones I’m sure you have used, such as, "We are just looking;" or, "We’re just browsing." Whether or not you really have a spouse or a partner in real life, it is usually a good idea to have one when you are in negotiations. Having a third party to refer to allows you to do several things. Stalling for time to think or to find out more information are but two of those things. The best use of this technique is to take it beyond the stall and see how anxious the salesperson is to sell. For example, say something like this, "I can’t make a purchase for that much without consulting my husband." This will prompt the salesperson to ask you at what price you could make a decision. You don’t want to give the salesperson a number. Your response should be, "Well, how much lower could you go on the price?" The more anxious the salesperson, the more quickly the answer and the lower the reduction. This also will allow you to ascertain if the person you are dealing with is in a position of authority when it comes to making a deal.
Always negotiate with decision makers. If your salesperson has to go check with someone else to find out if the price can be lowered, you know you need to be dealing with someone else: the individual the salesperson is talking to. This goes on all the time at car dealerships. The salespeople are actually using the third party technique on you. Does this sound familiar: "I have to run that by my manager?" This is usually the truth. Beyond certain strict parameters, lower-level sales representatives don’t have the authority to make many decisions, especially to lower price. But, stalling allows them time to plan their next attack on you. Don’t allow this to happen to you. You will be outnumbered and they will win. Besides, your time is very valuable and you don’t have time to play games. Insist on speaking to someone who has the authority to make decisions. This is especially true if you are making a major purchase—like a vehicle—for several thousand dollars.

The best time-leverage in negotiating can be gained by getting as close as possible to the actual owner or a direct representative of the owner. Again, attitude is crucial. It is best to explain that you are a serious buyer and you want to work with the owner or sales manager directly. Just be careful not to belittle the sales representatives and they will usually be happy to get someone in charge to help you. As long as their job is not in jeopardy, it is no problem. But the minute you upset the low-level guy, he is going to get the manager and at the same time prepare the manager to talk to you by telling him that you are a problem customer. Now the person in charge is defensive from the start and less willing to give in to any of your demands. I can tell you from firsthand experience, having worked as the head of sales operations for many years myself, when a customer has a bad attitude, it is often seen as a challenge for the person in charge. All the salespeople are watching how the manager handles this customer. Giving in to a shopper, even on minor points, may appear to be backing down and most sales managers’ egos won’t allow that.
Some people avoid the real decision makers because it is easy to push low-level sales clerks around. Personally, there is nothing more frustrating than having a clerk bounce between the sales manager and me. If you want to be right to the point, and you are a serious buyer, ask who is in a position to sell you the item for your price (you pick the amount). For example, if you want to purchase a couch and the asking price is $1,500, you could ask this, "Who is in a position to sell me this couch for $1,000?" This is a sure way to find out who the decision maker is. Be ready to explain why you are only willing to pay $1,000 and you may get a great deal. Once you identify the decision maker, there are a number of questions you can ask to begin finding out what leeway there is in price and other considerations: What if I buy today? Have you ever noticed how complacent salespeople get, especially in retail establishments? They are so used to hearing people say, "We’re just looking," all day long, that when someone actually says, "I’m ready to buy now," they hardly know how to react, if they react at all. I’ve actually had clerks say to me, "OK, let me know if I can help you," right after I’ve said to them, "I’m ready to buy these items." What if I buy two? If there is a discount for buying two, now you have established that the store is willing to take a lower price on each item.

For example, suppose you are looking at a $700 treadmill for your home to help you keep in shape. By asking, you find that the price for buying two of them is $1,300, or, $650 each. You now know that the store is willing to take $650 per treadmill. You have established a lower price parameter. What if I pay cash? Merchants pay fees of anywhere from 1 to 5 percent of every credit-card purchase to their credit-card processor. By paying cash, you are allowing the merchant to make a bigger profit, not to mention that they get the money today rather than a couple of days later. Your approach and questioning tactics are controlled somewhat by the nature of what you are attempting to buy. You obviously are in a different situation on a new car lot versus a garage sale, but, the basic premise of negotiation remains. Don’t let the fact that you are dealing with an individual selling a personal item change your thinking about your negotiation posture. In fact, you almost always pay a lot less than the original asking price by using these techniques on an individual. They are less experienced in negotiating than businesspeople who do it all day for a living. So, you actually have a better chance of getting more of what you want when dealing with inexperienced individuals. You don’t see a lot of price negotiation taking place in retail stores. People assume that because the price is posted, that must be the final price. However, there are a number of strategies you can use to ensure you don’t pay more for something than you have to. Ask yourself and the sales clerk these questions: "If and when is this item going on sale?" "Are there any manufacturer’s rebate programs or coupons available?" "Is the store offering any special savings on the item for sale or similar items?" "When is the store’s next big sale or inventory clearance, and will this item be included?" "Is there a comparable item available for less?" "Are there any bonuses available if I buy this item?" Bonuses could be things such as free film or batteries when you buy a camera, free CD’s when you buy a stereo, a free cell phone when you buy a car. Have you noticed what it is you are doing when you negotiate? Yes, asking questions. Asking for discounts. Asking for a lower price. Asking for bonus items. The secret to getting everything you want in life is simple. Ask. Ask and you shall receive. One thing is clear. If you do not ask, you will not get what you want, so never stop asking.

MORE STRATEGIES
There are a few more strategies you should have in your negotiating arsenal. Re-ask the asking price. Even if the asking price is listed in the ad or on the item, ask what the asking price is. This is especially important if you are calling about a newspaper ad. The seller may have just decided ten minutes earlier to lower the asking price. Ask the seller, "How much are you asking?" When face to face with the seller, use a wince. You wince by making a sour-looking face. Try to repulse your face and your entire body in disbelief of the asking price. No words are necessary. You are trying to say, without actually saying it, "Are you out of your mind asking that much?" We have all used it subconsciously. Plan to use it consciously every time you ask for a price. For even more impact, you can add what I call "The Exclamation." For example, if the seller asks a price of $500, wince and then exclaim in a concerned but not necessarily loud voice, "Five hundred dollars?!?" Then, be totally silent and wait for a reaction. Wait as long as it takes for the seller to react. At this point, whoever speaks first loses ground in the negotiation. The Exclamation works very well over the telephone but complete silence often works better. When someone quotes you a price over the telephone, don’t say anything. The silence will signal your disbelief and, often, an individual will react with, "But you can make me an offer," or, "But if you think that is too much you can make me an offer." The door is now open for you to set your price since you now know the seller is willing to take less. Most individuals trying to sell something have no idea how to price the item. They do not use logic when they choose a price. They most often use sentimental reasoning or guesses to justify the price. "Well, I paid $30 for it three years ago," they may think, "So it has got to be worth at least $25 now." By asking the seller how he came up with the asking price you can often help him realize his asking price is out of line. This is also a good lesson for you if you are trying to sell something.

Ask a price that is consistent with what the market will bear and you will sell the item more quickly. What is very valuable to you may not have that much value to me.
I remember one time when my wife and I had a garage sale and someone offered me 10¢ for one of my favorite high school shirts. I was reluctantly parting with the shirt even though I had not worn it in five years because it didn’t fit me anymore. But, to me that ten-year-old T-shirt was worth a million dollars in sentimental money. "No way," I barked, at the ten-cent offer, and pulled the shirt out of the pile. I haven’t worn the shirt since that day, but I was not going to part with my favorite shirt for 10¢, regardless of whether I wear it or not. The buyer had made the mistake of not finding out enough about the item before throwing out a low-ball price. Had he known the shirt had sentimental value to me, he may have approached the negotiation differently. Even at the ten-cent level, it is important to be a good negotiator in order to get what you want. Be prepared to walk away. This is perhaps the most important thing you must bring to the negotiation table if you truly want to get the best possible price and terms. If you cannot walk away from the item in question without feeling badly for not getting the item, you have lost the negotiation before you have even started because you will never be willing to push the seller far enough for fear of putting your purchase in jeopardy. At least, don’t let the seller know you love the item and can’t live without it. For example, never walk into a house you are considering buying and say something in front of the sellers or their sales agent like, "I love it, it is exactly what we have been looking for." Negotiations are pretty much finished at that point and you will pay the asking price or very close to it. Anytime your opponent knows you cannot walk away, you are at a disadvantage. It is the same disadvantage the seller is at if you know they must sell for some reason. If you make concessions, get something in return. As I said earlier, good negotiation is a matter of give and take. If you give in on a point, you should ask the seller what he will do for you. You might pay a little more than you planned but get a couple of extras thrown into the deal. Many times, store personnel have more leeway in giving you free merchandise than they do to lower price.

Always negotiate with a smile on your face. Smiling and speaking in a conversational manner will always get you more of what you want. You should avoid showing emotion or reaction of any kind during negotiations, except when wincing. But a smile along with a friendly tone will keep your opponent at ease. The last thing you want to do is put your opponent into a defensive mind-set. An overbearing tone from you can have a negative effect on the person you are dealing with and force them not only to get defensive, but also to feel insulted or belittled, which will certainly put a win-win outcome in doubt.

NEGOTIATING FOR FUN AND PROFIT
In the end, the bottom line of negotiation comes down to supply and demand. The more appealing the item for sale, the less the merchant or individual will be willing to give in to your demands for a lower price. Understand this fact when going into negotiations, do your homework on the item for sale to the extent possible, and be as confident, yet courteous, as possible during the process, and you will get what you want most of the time. Yes, to some, the art of negotiation is a game. And, it is true that you can have a great deal of fun negotiating. But it is also a very serious wealth building tool. As the old saying goes, "Use it or lose it."

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