The art of haggling Posted by: McQ
on Tuesday, May 13, 2008
Will Wilkinson has just returned from Turkey and discovered he hates haggling.
I am terrible at it. As a consequence, I bought nothing in Turkey other than tickets to various things, room, food, and a poster of Ataturk. And I overpaid for all of these things, I’m sure, which has left me a bit bitter about the place. Surely this is inefficient overall, no?
No. Not if you've done your homework. And, it is both sport and entertainment all rolled into one. But, as Wilkerson discovered it's a cultural thing and for the most part Americans suck when it comes to haggling. Well with some exceptions. I happen to be married to one.
We once walked into a oriental rug emporium run by a group of Egyptian men. My wife wanted a rug, had done her homework and knew what she wanted and how much she was willing to pay. As we walked in the door an Egyptian man met up with us and walked along as we looked at the piles of rugs on the floor. He concentrated on chatting me up, basically ignoring my wife. Big mistake. Finally, she asked about a particular rug and he offhandedly threw a price at her. She stopped stock still, looked at him and said "that's ridiculous." She looks at me and says, "if that's the best he can do, we need to go somewhere else." She grabbed my arm and we headed out the door.
Suddenly all attention shifted to her and the nice Egyptian fellow threw a more reasonable price at her. The haggling had begun. For more than an hour it went back and forth with my wife headed out of the store on two more occasions.
I, as I usually do, stood there as a bemused spectator. At one point during the process, the weary salesman looked at me and asked "what is she, Israeli"? A none too subtle way of saying something pretty stereotypical and unacceptable but still pretty funny. I just smiled. When, later, they finally agreed on a price, he paused and looked at me and said "she's not Israeli, she's Egyptian" - the ultimate compliment. She'd gotten the rug for 40% of the initial price.
Haggling is in some people's blood, and my dear wife is one of them. I watched her buy a car once by asking one dealer to fax her a price and then sending that, by fax, to another dealer. That went back and forth for about 5 rounds until one dealer said "uncle". Tele-haggling. We bought the car from the other dealer.
Last week, she called our satellite TV provider and bluntly asked why she should stay with them when other providers were offering such incentives to change. The person on the other end of the line said there were no incentives available presently for current customers. "Well," she said, "I guess I'm going to be a former customer then". 10 minutes later I had free Showtime and 10 bucks monthly off my TV bill.
So next time Will heads to Turkey, I recommend some basic haggling lessons. And I know just the teacher. One note to Will though - if he doesn't haggle a bit over the price of the lessons, he's going to end up paying out the ...
But he'll make up for it with all the money saved in Turkey - I promise.
The key to haggling is the commitment to walk out the door, as your wife so well knows. In 1986, I wound up with a Toyota 4x4 because both the local Ford and Chevy dealerships were sure I’d come walking back. Sure, cultures differ, but in any society, proprietors prefer to continue in their business. Using inflated prices, and all business do this with those they view as gullible or indifferent, is the norm. As is falling back upon a price to make bottom-line profit when forced to.
This is not to say that folks such as Will Wickerson made a poor choice. He made the choice that suited him, his time, and his pocketbook. Plainly stated, he did not want the haggle.
When I lived in Indonesia, I learned how to haggle. Even better than some "locals" from Jakarta, who had not learned the key trick is to "walk away." One idiot even whipped out a large bill to pay a pedicab driver, who of course didn’t have change. I also had to help a Taiwanese woman haggle too. My Taiwanese wife, of course, is the world’s worst bargainer and is always getting duped at the market.
Also, if you do walk out the door, don’t be afraid to come back if you change your mind! Its merely a tactic! If you really, really want the item, just come back and buy it at the last price. No biggie.
Another tactic is to sometimes do the reverse...promise in advance NOT to walk out and shop around as long as the price is reasonable. I used this buying furniture a few times. The owners hates people who ask prices and then leave to go to another shop, inevitably buying from the last guy they see.
Also, if you do walk out the door, don’t be afraid to come back if you change your mind! Its merely a tactic! If you really, really want the item, just come back and buy it at the last price. No biggie.
An addendum, and this only works in plastic-dominated societies; when you walk back in, have in hand the currency that you are willing to pay.
When I bought our new front-load washer and dryer, my wife wanted good ones that would last 20 years. I walked to the door three times, told the salesman that if he mentioned the words "extended warranty" a second time I’d leave (and I meant it), got two years (instead of one) coupons for detergent (two years out we’ve still got about half of the coupons, they’re still good), then got free delivery and setup instead of the ’half-price’ offer in the store. We paid 70% of the listed sale price. Not bad for the US. In Jamaica I generally came in at 40% or less of first price.
Part of the fun is dealing with a really good salesman. Trust me, the good ones know how to haggle right.
I even bought my last truck by investigating everything carefully then emailing 6 local dealers, detailing what I wanted and what I would pay ’out the door’ and said the first one to take the deal got it. Thirty minutes later, I bought the truck over the phone and the dealer delivered it to my home and we signed the papers there.
My wife absolutely *hates* the process. She loves the results, but she’s too embarrassed to go with me, usually.
Oh, and you never know if you don’t ask/try. About 4 years ago I wanted a new office chair. I went to the local Office Max (cause I get a lot of stuff there) and started looking at their sale-priced chairs. I found one I liked, then asked how much more they’d take off. I bought a chair listed at $350, sale-priced at $239, for $200.
"A none too subtle way of saying something pretty stereotypical and unacceptable but still pretty funny."
I wouldn’t be so sure. They probably think that Americans can’t haggle, so what country has non-Arab, American/European looking citizens that can haggle like Egyptians? As you said, it’s a cultural thing, and Israel is part of the middle East.
I’m terrible at it, but my husband is so bad that he wouldn’t go off base at Clark if he could possibly not. Neither of us could haggle, but at least I could say no to street vendors. He had a standard of politeness so ingrained in him (I blame his parents!) that even after telling him how it worked he couldn’t adjust his "cues". He’d say "no" and not break eye contact. Turning away from a person is RUDE. Even when I told him that "no" meant "give me a better price" or "find a color I like better" if he didn’t turn away, he still couldn’t do it.
Me? I just hate hate hate shopping. Even here at home I won’t go compare prices. I just want it over with.
Had a psyc 110 teacher tell us about his father’s method for buying a car...
If the car was listed at 20k, he’d offer 10k. Salesman would respond with teh 20k, and the guy would say "No, I’m sorry... I only want one car." Salesman would just a couple of grand off that 20k, and his dad would cut that same amount off the 10k. "What? You just admitted it was worth that much less..."
He would almost never raise his price to meet the salesman. Got the price chopped down really fast.
My dad’s trick is to threaten to put the car on his credit card (He’s built houses, so he had one of those "no limit" cards contractors sometimes get). The percentage the dealer would have been charged by the card company would have been huge.
You never saw a guy run for a manager so quick in your life...
From 1976 to 1978, My wife and I lived in a Barn right behind the library. She and her friend Alice spent a year shopping in Angeles City and our last year picking things up. We took about 4,000 pounds over and brought 10,000 home.
She learned to haggle when she came to meet me in Bangkok in 1972.
Our squadron at DaNang had a practice of having people who went to Thailand TDY or on leave, shop for jewelry. There were two rules: (1) pay in advance, (2) Accept what is bought.
We would go to a jewelry store, point out all the items we wanted and pile them up on the counter. Ask for a price and put down 30% in greenbacks. When the seller wailed, we picked up the money and walked out and keep walking. One look back and you were done. Of course, the store sent out a salesman to accept our offer.
The effect of this success later sent a tremor through the economies of South East Asia. Great fun.
One question about Clark. Were cans of fruit cocktail still as popular with the locals when you were there?
I’ve got the Brazilian master haggler living with me. We went shopping for a new Lexus a few years back. The sales guy was a middle age Turk who wanted nothing to do with a woman. Poor bastard ;-) 45 minutes later she said ’if you even LOOK at my husband again for a response, we walk out the door’. He rolled hi eyes and looked at me. *Sigh - come on dude!* Out the door we went and ended up buying a Cadillac after an hour or so of ’negotiations’ between the Mrs. and the salesman. The only time he looked at me was to say ’you’re the smart one here’. He said it with a smile that indicated he new what he was up against.
As for me... I don’t like haggling. I always feel that if they are willing to come off the price, I’ll always feel like like I got worked. I prefer knowing a store is making an average 10% and leave it at that.
McQ, No offense but how do you have the moral authority to criticise Will when you yourself do not need to do the haggling? Yes, us non-hagglers are aware that it can be done and that there are techniques to do it. Where it falls down for us is we are uncomfortable with the techniques (and other things). Come back when YOU have become the master haggler or for that matter when you master a skill that is contrary to your personality.
McQ, No offense but how do you have the moral authority to criticise Will when you yourself do not need to do the haggling? Yes, us non-hagglers are aware that it can be done and that there are techniques to do it. Where it falls down for us is we are uncomfortable with the techniques (and other things). Come back when YOU have become the master haggler or for that matter when you master a skill that is contrary to your personality.
Don’t forget something I’m sure Will would mention (and probably did in his post, which I read on his blog and am now too lazy to look at again): Transaction costs.
I put a lot of value into not having to deal with a damn salesman for an hour. Now, someone who for some perverse, diabolic reason, enjoys the process will of course value it in the other direction, but...
My time and consternation (especially the latter) aren’t free, and haggling costs both. (Plus at the non-personal level, as Will says, not having to haggle gets everyone but the best hagglers a better purchase price, and the transparency of price information has to be valuable, though calculating the benefit would be hard.)
