Bargaining technique for items you're not familiar with.

[mrsamsonite]

I usually have a hard time bargaining with items that I dont know much about. I feel like I am at the mercy of the buyer.

The other day I was selling some used tires to a tire shop and the owner of the place asked me how much I wanted for my 4 tires. I have sold them before at other places and I usually get $5 a piece. Instead of saying I want $5 each I said "I want a fair price for them." He said he usually pays $5 but, since I had 4 he paid me $30. They were different tires but all the same size.

It was a small transaction but, it works to ask for a fair price on things you are selling that you dont know much about, instead of just making up a price. Sometimes the buyer will up the price for you if you just ask for a fair price.

[ggariepy]

The opening position in any negotiation is the weaker position. The person who opens lays their cards on the table first, and it gives the other person a chance to react to, rather than predict, the first person's position.

Buyers have the power in a down economy on commodity items, but if they open the negotiations they cede some of that power to the seller.

What you're describing is a way to get the buyer to open. What ended up happening was that he left $10 on the table he wouldn't have if you had opened with the price you usually get.

If he had said to you instead, "Well, I need to get a fair price too, because I have to make a few bucks off this deal, how much are you thinking?" then he puts it back in your court and you're pretty much forced to open. You might have caught an inexperienced buyer, or caught an experienced one off guard...or you might have left money on the table by not countering a little higher. It's really hard to say.

You might have said to him, "You know, $30 is a pretty fair offer, but being that these have a value of $20 each retail, I'd like to get $40 for the set." Never know, he might have gone for it.

In the end, it's knowing what the real market is for what you have to sell, being confident without being confrontational, and trying to achieve a win-win situation where everyone feels like they got what they needed. If you go in unprepared, you don't really know how well you did. And if you end up working with someone regularly, sometimes they will throw you a bone, sometimes you should throw them a bone, and it all comes out even over time.

--Geoff

[mrsamsonite]

The opening position in any negotiation is the weaker position. The person who opens lays their cards on the table first, and it gives the other person a chance to react to, rather than predict, the first person's position.

Buyers have the power in a down economy on commodity items, but if they open the negotiations they cede some of that power to the seller.

What you're describing is a way to get the buyer to open. What ended up happening was that he left $10 on the table he wouldn't have if you had opened with the price you usually get.

If he had said to you instead, "Well, I need to get a fair price too, because I have to make a few bucks off this deal, how much are you thinking?" then he puts it back in your court and you're pretty much forced to open. You might have caught an inexperienced buyer, or caught an experienced one off guard...or you might have left money on the table by not countering a little higher. It's really hard to say.

You might have said to him, "You know, $30 is a pretty fair offer, but being that these have a value of $20 each retail, I'd like to get $40 for the set." Never know, he might have gone for it.

In the end, it's knowing what the real market is for what you have to sell, being confident without being confrontational, and trying to achieve a win-win situation where everyone feels like they got what they needed. If you go in unprepared, you don't really know how well you did. And if you end up working with someone regularly, sometimes they will throw you a bone, sometimes you should throw them a bone, and it all comes out even over time.

--Geoff

thanks for the advice and I agree with some of the stuff you mentioned. That is a good idea for me to maybe ask for $40 after he offers $30.

I guess I was just referring to the situation where one person knows a lot about the item being sold and the other person knows little. The buyer in my situation knew the fair value and added some more to make it a more reasonable deal. If I had like 100 tires I would definitely shop around and do more research but, I only had 4. I find I learn the most through trial and error, interacting with buyers and talking with them anyway.

There have been times where I actually bargained too much and was a little too worried about getting ripped off that it was a disadvantage and I got paid less. So, my approach now is to ask for a fair price and let them know that you are interested in working with them regularly, like you said sometime they will throw you a bone when they know you. The better business relationship that you build with the person the better the price. Ive been trying to stick with the same buyers for different items, instead of constantly looking for better prices, and it has paid off. Of course, I will keep my eyes open for better prices but, the best way is to be friendly and if the person likes you they will reward you for being a good business contact.

I studied economics in college which I believe involves more critical thinking than studying business but, I think business teaches you more how to interact with people with such things as bargaining etc. Am learning those business skills now as my business is growing.