A lot of Americans are uncomfortable with the idea of haggling over the price of an item they're purchasing. But in many other countries and cultures, haggling is not only widely practiced; it’s expected. Enter the foreign souvenir vendor: he quotes a ridiculously high price. You go really low. He comes down a little, and you eventually meet in the middle somewhere between his desired price and what you agree to pay. In foreign cultures, in particular, you'll end up paying too much for anything you don't haggle for since prices are set for this process.
Yet many tourists buy things at full price all the time. While you may feel uncomfortable haggling over prices, the reality is that the tactic works and it's just another way to save money. Think of it this way. The vendor will only agree to the price because he/she can still make money off of the sale. Otherwise, they will just say no.
Surveys reveal that 89% of people who haggled for a lower price received at least a partial discount. You may not always get as much of a discount as you'd like, but you may get other perks such as free services, shipping, or bonus items. Whether you are new to the concept of negotiating prices or are a seasoned haggler, these tips can show you a new trick or two for becoming better at haggling.
Haggling Tip #1: Know the Value and Comparison Shop
Your greatest asset when haggling is a knowledge of the product's value as well as other sellers' prices. Simply quoting another retailer or vendor's price may be enough to get you a deal because the seller knows you are informed and willing to go elsewhere if necessary. Comparison pricing is especially useful when haggling with major retailers, who tend not to be as flexible. If you know what you're willing to pay for an item going into a transaction, you won't end up paying too much for something you could have gotten elsewhere much cheaper.
Haggling Tip #2: Start Small To Build Confidence
If you've never haggled much before, going right for the jackpot can be a bit intimidating. Start small: try getting a discount on your dented cans of soup at the supermarket, some not-so-fresh produce, or a hand-crafted item at a flea market. Success, even if you only save $1, can encourage you to haggle for larger items and bigger discounts. Flea markets and yard sales can be less intimidating environments in which to try out your new haggling skills. You are also less likely to miss out on something if you are unsuccessful and couldn’t bring yourself to buy the item at the original price.
Haggling Tip #3: Start off at 40-50% Less than You're Willing to Pay
Haggling wouldn't be haggling without the process. If you immediately tell the seller what you're willing to pay, you're not as likely to get your desired price. You have to create the illusion that you're continuing to offer more for the product. At the same time, the seller will create the illusion that he's giving you a deal by coming down when he's probably only knocking off a small percentage of his profit.
Haggling Tip #4: Be Willing to Walk Away
Keep the value of the item in mind, what you've already decided to pay, and let everyone understand that you are willing to walk away. You have to negotiate from a position of strength if you want to be successful and your biggest leverage as a consumer is that you don’t have to buy the item that you are interested in. If the other side thinks you have to have whatever it is you are trying to buy, then you will never get a good discount. Just remember that someone else may be more willing to take your offer for a similar product. In the very worst case, you can always come back to the same store and get the price that was offered, so don’t feel like you have to buy it right then and there.
Haggling Tip #5: Use Techniques Without Being Fake
Some people who make a living by haggling are willing to put on a show in order to get a rock-bottom price. Lying or using pressure tactics to coerce a salesman into giving you a discount can call ethics into question and isn't necessary in order to save money. The key to effective yet above-board haggling is to remain friendly, conversational, and engaging. Here are a few honest techniques you can use with a clear conscience:
Point out small flaws or defects in items to draw attention to their loss in value and negotiate a lower price.
Play up your customer loyalty. If sellers know you'll come back or purchase other items, they're usually more willing to give you a deal.
Ask questions that can't be answered with yes or no; this draws the seller into a conversation and hopefully negotiation. Ask questions such as "what kind of deal can you give me on this?"
Use cash. Using cash saves sellers from paying credit card fees, so why shouldn't the savings pass down to you? Politely ask if you can get a cash discount.
Give them a good reason to give you a discount. When we remodeled our kitchen, our contractor got a tremendous discount for us just by asking. We were really happy because we shopped around ourselves and the price he got it for was about 25% lower than every other place we looked. He told us that he walked into the store and told the owner that his clients wanted a specific type of material and he’s never paid even half for countertops of what the owner has them selling for. He was nervous about why the material would cost so much and whether he would have to cover some of the high costs if his crew were to make a mistake and ruin some of it. When I went to pick the material up from the owner, he shared with me that he ended up giving our contractor such a big discount that he literally cut his normal profit market by 80% because he wanted to help everybody out.
Haggling isn't just a way to save money on your purchases. It's also a great way to gain confidence in your knowledge of the marketplace, your ability to interact with retailers on their own level, and a new sense of accomplishment. By far one of the greatest things about haggling is that it's fun. If you're not careful, you just might get addicted.