With a few exceptions – like gravity, and death– everything is negotiable, even taxes. First, you need to believe it. Second you need to practice it.
VALUE AND PRICING
Is there such a thing as a “fixed price”? Probably not. According to economic theory the law of “supply and demand” governs pricing. And while this may be basically true, there are many other factors which enter into the equation. Furthermore, many of these factors are subjective. This means that there is room for negotiation.
The “fair market value” concept comes into play as well. Pricing is supposed to be the result of what a willing buyer will pay to a willing seller. In other words, subjective, emotional and psychological considerations may be in operation. Perhaps the best examples of the application of this principle are in real estate transactions. What you may be willing to pay for a house may be significantly discrepant from what I may be willing to sell it for, or vice versa. The same concept holds true for property appraisers. These experts determine a value based comparable properties, features of the property, and their experience and education. However, their value may be influenced by an “offer” price and perhaps even lender guidelines, neighborhood trends, etc.
Think about the last time you purchased a used vehicle, or a new automobile, for that matter. A friend of mine was a top salesman. He always said he liked to sell used cars because nobody knew the “true” value. Frequently the emotional component (i.e., “I love the car” or it “suits my image”), or the terms of the sale, override good judgment. This discussion demonstrates that value and pricing, like beauty, are in the eyes of the beholder. And, the beholder will certainly be influenced by his position (buyer or seller), and by psychological factors.
NEGOTIATION
Negotiation is the process of bargaining. Donald Trump fancies himself as an extraordinary negotiator, and wrote a best-selling book on the topic “The Art of the Deal.” However, it was his attorney and corporate V.P., George Ross (of “Apprentice” fame) who made the techniques more concrete. In Trump Style Negotiation ( Wiley & Sons, 2006) he offers “Winning Negotiation Strategies from Donald Trump’s Right-Hand Man.” Techniques such as “building trust, friendship, and satisfaction with the other side.” are discussed. Determining “what the other side wants,” then ascertaining their weaknesses are also covered. Weaknesses can be such things as pride, lack of cash, need, etc. Offering solutions to your “adversary’s” problems is important, and so is convincing people that they got “more than they ever expected.” Such mundane, but important issues such as controlling the place and pace of negotiations can also be used to one’s advantage.
IT’S A MINDSET
In the beginning of this article I say just about everything is negotiable, and that you need to believe it and practice it! Many people are afraid to negotiate or inept at the process. Just ask. You may find that the other party is willing to deal.
Next time you visit your supplier, mechanic, roofer, tailor, department store, barber, dentist, restaurant, etc., ask if they can cut their price, or make you a deal. Do they offer discounts? Do they offer low cost financing? Do they offer better terms? Do they stand behind their product? Will they offer extended service or replacement provisions? Just ask. Indicate that you are a serious and savvy buyer, cognizant of value, and that you are looking to build a “relationship” with them. You may be surprised at how often you will gain concessions. Remember, almost everything is negotiable.