“You saved $36 today!” exclaimed the clerk at JC Penny’s. “Gee, that’s great!” I replied. “I spent $31 and saved $36! What a deal!”
These days, corporate retailers love to tell me how much I saved while shopping at their store: They tell me when I buy groceries, and when I buy hardware. I was even reminded of how much I “saved” the last time I got my car serviced. Sometimes, they even print the savings amount on my receipt so that I’ll be reminded of what great folks they are when I reconcile my checkbook.
The crux of the matter for me is that I don’t really care how much I saved; I care how much I spent.
Who believes anymore that retail prices actually reflect what the seller expects to get for his merchandise? It’s been known for decades that the asking price for homes and automobiles is fiction. For the past five years, retailers in almost every category have been training us that their asking price is fiction as well.
Of course, we in the antiques and second-hand trade have always known that the asking price is not the “real” price. We haggle over price when we buy and we haggle over price when we sell. Haggling is “business as usual” for antiques dealers. But, is haggling good business? In my opinion, it’s not. I prefer to negotiate, and there’s a big difference between haggling and negotiating. Haggling is all about price; negotiating is about an exchange of value.
Antique Trader 2012I found it enlightening to learn that the Latin roots of the word “haggle” literally mean “to hack” or “to cut unevenly.” Doesn’t that describe the typical haggling scenario: The buyer hacking away at the seller’s price, while the seller tries to defend his price position? The Latin roots of the word “negotiation,” however, are less objectionable: “neg,” which is to say “not,” and “otium,” meaning leisure. In other words, a negotiation is not leisure, it’s business. I guess the Romans really didn’t mix business with pleasure.
What advantage does negotiating have over haggling? As a dealer, negotiating puts you back in the game. In a haggle, the customer knows that you have overhead to pay and that you want his money. But, what do you know about your customer? Unless you know why your customer is interested in buying an item, you have no negotiating position. All you can do is dig in and defend your price.
Arthur Murray taught me how to negotiate from a seller’s perspective. Not the actual Arthur Murray, but the manager of one of his franchised dance studios. Back in the late 1970s my wife and I signed up for a “six ballroom dancing lessons for $10” introductory package at Arthur Murray. At the end of each half-hour private lesson, the teacher had us fill out a questionnaire and give feedback about the class: Would we like to have dancing be part of our lives; did we have the time for lessons; could we afford it, and so on. In short, the questionnaire covered every possible objection we might later offer as to why we didn’t want to sign a contract for a more expensive dance class. When the time came for the sales pitch, I was dead meat.
The lesson in negotiating was worth the price of the dance class. Plus, I can now do a respectable Fox Trot when called upon to do so at weddings and such.
In order to turn a haggle into a negotiation, you have to find out what value the customer finds in your offering. That’s exactly what the manager at Arthur Murray did: They asked a lot of questions and engaged me in conversation.
You can determine how much your customer values your item by engaging them in conversation and walking them through what I call the “Value Funnel.” The Value Funnel is a series of questions that allows you to uncover how much the customer wants your item. You can adapt these questions to your particular circumstance, but I prefer to use them in this order:
1. What types of things do you collect?
2. What are your favorite items in your collection?
3. How long have you been collecting (item)?
4. Where do you find your (items)?
5. Why would you want to add (your inventory item)
to your collection?
6. Would you like me to wrap that one up for you?
Of course, the last question is just an opening to begin the negotiation; if he’s interested, he will move to haggling over the price. You, however, have armed yourself with what you need to transform the haggling into a negotiation: You know what he collects, what his favorites are, and why he wants to add your item to his collection.
The above questions will help you to determine how much the customer values your offering, and that knowledge increases your negotiating position. If you’re selling a Victorian occasional table, your customer may have indicated that she has “just the perfect spot” for the table. If your customer collects antique metal toys, your item may be what he needs to complete a set. Either way, you can now talk about something other than price – and that’s the difference between a haggle and a negotiation.
Once you are negotiating, there are a few other things you can do to move the discussion away from price:
Change the quantity; if your markup will allow, throw in another similar item, or another item at half price.
Change the terms; for example, on a large piece of furniture offer 30, 60, or 90 days same as cash
Offer to deliver the item
Offer a bonus that has nothing to do with the item, like tickets to a movie or event or a gift certificate to a restaurant.
The important point to remember in any negotiation is that whoever wants to make the deal the most has the upper hand. Price is not the only point under consideration. In your store, you should be the one to set the terms of any negotiation. When you negotiate rather than haggle, both you and your customer benefit. And then you don’t have to remind him how much money he saved in order to turn him into a regular customer.
Previously published by Antique Trader Magazine