Bargaining Tactics for Big Ticket Items
Often frugal living requires the use of bargaining tactics. Used properly, you can save considerable expense on large items like furniture and appliances.
Here's a story that you might find of interest.
A new piano is something I always wanted as an investment for recreation and entertainment, but the high price always looked like it was a bit too rich for my blood. I looked at competing brands, their quality of construction, styling and sound.
After settling on the piano that I wanted, I went to find the best price. How did I do it? By using all the bargaining tactics that I could muster.
I focused on two piano retailers in my area. I visited one nearby, a piano store, and I had a friend visit another in a distant city where she worked. The distant store was what I would call a professional keyboard shop, a place where Lionel Richie had recently purchased an unusual clear acrylic grand piano.
Invest Time First - then invest your money
I let some time go by and called to ask questions of both dealers. I spoke with the owner/managers, never salespeople. The owners are decision-makers, so they are the ones to stay focused on. One of my bargaining tactics was to have the sellers invest time with the buyer, it's something they won’t want to let go to waste when it comes time for the sale.
Knowing the price of the piano and the prices of similar pianos from another manufacturer helped me when it came time to make an offer – an offer that was focused on finding out just how "soft" the pricing might be on these items. Remember, I was out to get the best value – a low price on a high quality instrument.
During a visit to the distant shop, I looked at used pianos to get a feel for what I could get in that market and for how much. The $4,000 new piano I wanted was advertised at $2,800 as a used instrument. It would have been a great savings, but I wanted a new piano since this was going to be the only piano I would ever buy, and I wanted my baby to be new.
As I was looking, I never made a commitment to buy, just an expression of interest. I expressed a need to think carefully before making such big spending decisions. This bought me more time to negotiate and it’s one of the important bargaining tactics – never be rushed into a purchase.
Information is Key - get it, don't give it
Since both dealers had met me, I continued to ask questions over the phone and seek information about availability, delivery and purchase options.
Negotiating price over the phone can be one of the great bargaining tactics, especially if you don’t have much of a poker face. Just don’t let them hear your knees knocking.
In an effort to get me to buy, the shop in the distant city said that they would get a 5% discount if they “move” a piano within 7 days of arrival. That was good to know. When you are negotiating, information is key and supports all of your bargaining tactics.
Finally the day came for me to make an offer. I started with the nearby shop. For the piano advertised at $4,000 I made a $2,500 offer over the phone. It was a low offer, but I was using it as one of my bargaining tactics to determine just how "soft" the pricing might be. To my amazement, the dealer called back shortly with a counter offer of $2,610.
Wow. I had to ask for time to consider the counter offer.
After this first counter-offer, I then asked the professional keyboard shop to beat the price offered by the piano store, but they wouldn’t. They tried to call my “bluff” by saying "buyers are liars", but that didn’t faze me. I said to him, "I didn’t just pull that $2,610 number out of the air – you know that is a legitimate offer from a dealer".
He knew I wasn’t making it up.
After allowing him a moment to think about losing the sale, I reminded him of his 5% discount for moving the piano within 7 days of receipt, and it was the 7th day. Remember, being armed with information is key. One of many good bargaining tactics is to pitch seller originated information right back at them to help close the sale.
I also encouraged him by saying (quite truthfully) that I wanted to buy my piano from him, a professional keyboard man, and he would have my check in his hands that evening. He put me on hold to do some calculations.
He probably also spent some of that time trying to convince himself that he could let this sale slip through his fingers without concern – but he couldn’t allow that to happen. He had spent too much time with me in person and on the phone. He had to make his investment pay off in a sale, even if it was not nearly as lucrative as he had planned.
Finally he came back and agreed to sell the piano for $2,610. That was a new piano for about $200 less than he wanted for the used one. I most certainly did not say anything to him about the inconsistency between the asking price of used pianos and the selling price of new ones. This might have soured the deal on the spot.
In the back of his mind, he thought that his other store in another city had been negotiating with me and had violated his store policy of not discussing pricing over the phone. After all, he had initially refused to discuss price over the phone as a matter of policy. Since he was the owner, it wasn’t too difficult for him to alter his own policy to make a sale.
Summing Up the Tactics
So, here are the bargaining tactics demonstrated in this piano sale negotiation:
- Invest time when making a large purchase. It took me 6 months from initial inquiries to final purchase, but the time and effort saved me about $1,400. That was a large chunk of change for a 22 year old.
- Don’t be in a hurry, and don’t be rushed by artificial timelines. They are the only ones in a hurry to make a sale, so you don’t have to be. Make it clear that you are in no hurry. If an artificial timeline is established for the sale, just consider it to be the gimmick that it is, and ignore it.
- Get to know the person so they have a legitimate interest in talking with you on the phone. You want to be able to play one seller off the other quickly when it comes down to negotiating the final price. You can’t do that driving around town, you have to be on the phone. Besides, being on the phone puts you on your turf, not theirs.
- Don’t panic or get riled when they turn you down or say “buyers are liars”. If you stay calm, you stay in control and are less susceptible to persuasion from those that persuade for a living. If I had slammed down the phone after his insulting comment about me being a liar, I would have shot myself in the foot.
- Have your own purchasing policies to match up with their selling policies. You operate your own business just like them, except your business is spending your money wisely, being a smart shopper engaged in frugal living.
- Deal with decision-makers like owners. You are the decision-maker for your money, so when feasible, work with the decision-maker at your seller’s location. When the deal is struck, be prepared to stay with it. If you back out of a commitment to buy, you won’t be welcome to start up negotiations again.
- Don’t say anything to rock the boat or cause remorse on the part of the seller once a deal is struck. Let the seller save face if you have beat him at his own game.
This story is a serious example of bargaining tactics employed in the interest of frugal living. When it comes to saving 35% on something that costs thousands of dollars, employing such bargaining tactics seems well worth it.
And, here I am 30 years later, and I still have "my baby" sitting in the living room, looking like the day it was delivered.
Done with Bargaining Tactics, take me back to Frugal Shopping