bartering.htm: How to haggle, how to bargain

Bartering, bargaining & haggling

Bargaining & haggling techniques

by José Carioca

(Heavily edited by Fravia+)

First published at http://www.searclores.org in September 2005
(and this is version 1.9 already)

Bargaining techniques
Learn how to haggle
The 12 golden rules of driving a bargain
More haggling advices
How it really works

This is an interesting addition to the 'reality cracking' section. Haggling is indeed important, especially if, as you should, you try to live in a more frugal and less consumistic manner. Let's hope some further bargaining and haggling additions will follow. I tried this very approach with my doctor and he laughed, but then -not laughing any more- made a discount when he saw I was dead serious (and I pointed out how short his "visit" had been)...

Bargaining techniques

Caveat emptor!

Bartering? At times. Bargaining? At times. Actually it's more haggling, isn't it?
To Haggle v. i.: To be difficult in bargaining; to stick at small matters; to chaffer; to higgle

Most of us do not live in Istanbul. But bargaining and haggling are possible nevertheless.
Did you know you could save hundreds of euro when you book an hotel room or rent a car?

If you're going to reverse the Grand Bazaar of Life you have got to learn how to haggle, and if you're going to chase elusive bargains, remember that the counterpart will always set a first price outrageously high and will often nowadays NOT expect you to haggle it down. But haggling it down is still possible. And great fun. With your lawjer, with your doctor and at the flea market.

General bargaining tips:

Enjoy and love the process. It's great fun and you may/will spare A LOT of money.
Get to know the person first ("have a mint tea with your plumber")
Never show much interest in what you want, in what the trader offers, be it a concrete object or some services: that is your target. Always play the value of your target low. Always exaggerate the value of your offer.
Let the trader tell you the price first. Never propose a price first.
Keep it delicate. Remember that if you go too low, your trader will be offended and never sell to you, no matter how high you may want to go afterwards.

Most people DO NOT bargain. In to-days culture, haggling on prices gives -they wrongly believe- a "scrooge" impression.
Actually it's the other way round. If you DO NOT haggle you give -rightly- the impression of being an idiot.
You may be too ashamed to haggle, but in that case you are wrong. On a car sale, for instance, you can easily save up to 20% that you may ADD to an already discounted price.
You just have to know what to do, what to say, and how to act.
The first thing you have to understand, is that bargaining/haggling (and sometime even bartering) is present everywhere, from kids-parents relations to Kyoto protocol, from priest absolution to conglomerate mergers, from tribal meetings of the oldest warriors to on-line flirting.
Human social life is based on haggling and bartering.

Your local supermarket "barters" with you: it will use as few cashiers as possible in order to have its clients queuing patiently until they 'almost' grow desperate to the point to throw away their filled chariots in exasperation and leave. In that case, if clients just begin to leave, new cashiers will appear auto-magically. It's a bargaining procedure.
Your bank "barters" with you as well all the time: it will tax your account expenditures and its own poor services more and more, until you 'almost' begin to search another bank.
Here too, if clients just begin to leave, all account costs will auto-magically be reduced.
Your insurance, your car dealer, your kids and your doctor do the same all the time, duh.

Remember that everytime consumers make major purchases, the most common mistake they make is to assume that negotiating is not an option. This is DEAD WRONG: there is room for negotiation in virtually every purchase.

Learn how to haggle

Not everyone can haggle, but anyone can learn it.
To begin with, find a "haggle friendly" environment, such as a flea market, garage sale or craft fair. Major retailers and online commerce sites aren't the best places to try to negotiate prices when you'r still a newbye.

For instance practice your haggling skills by yourself, on a flea market: a typical beginning could look like this:

"How much would it be?"
"50 euro" usually he wont even seem to look at you. In fact he's already looked at your clothes to judge your wallet and is just waiting to see if you'll haggle or if you happen to be a complete sucker (there are a-plenty).
"No, no, I mean, how much would it be if I really would buy it, with real money? -smile while saying this, builds confidence and is part of the game.
"Still 50 euro... but ok, since you are the first client this morning, I'll let you have it for only 30 euro".
Typical trick: the idea behind it is that once the trader is (apparently) so much under the "first" price, it isn't correct to ask for further reductions.
You must have a correct answer to this: "Unfortunately I don't have that much with me"
The trader will now play his part: "Listen, this is a very nice thing you want to buy. It would cost you up to 600 euro if you would have it made here. It is so cheap because it comes from my homecountry: Iran".
The trick here is that going "personal" (a typical trader technique) the phantasmagorical sum of 600 euro will sound less surreal. A good counter-technique is to go immediately personal as well.
"My grandpa had such a nice object as well".
"Grandpa" if the trader is a man, "grandma" if the trader is a woman, of course.
If the trader at this point stands up and moves in your direction, it means that the "real" bartering now begins.
Of course you must be ready: you have your money subdivided in your pockets: 5 euro in left jacket, left trousers front and left trousers behind, 10 euro in right jacket, right trousers front and right trousers behind, real money in your wallet that you never show to noone. In this case you may chose to go either for 15 or for 20 euro. To show your disponibility you can pull some coins (say twice 50 cents and one 20 cents) from your last pocket and say: "Here, that's all I have".

Now "since you are the first client this morning" was a problem from the beginning: you should always try, on a flea market, to go bargaining at the end of the day, when stores or booths are about to close. Especially traveling merchants may want to get rid of their merchandise so that they won't have to ship it or have extra stock to move.

A last advice, for flea markets: don't dress well! It may embarrass your friebnds when you go antiquing, but you will ALWAYS get the best deal. Flea markets have often no prices posted. They look at what you are wearing, jewelry, etc. and then price the target based on what they think you'll pay.

The 12 golden rules of driving a bargain

Here the 12 golden rules of driving a bargain:

Have clear objectives: What do you want to have? How much are you ready to pay? It is not sufficient to say "as less as possible", choose instead a concrete target price that corresponds to the value of the target. There are two possible approaches: you decide by yourself on the fly or you decide, as a rule, to buy only if you manage to go -say- 20% underneath the amount of the first proposal by the trader.
Determine clearly the "ultimate reserve" price. The maximum you'r ready to pay for the target. You may decide to start by offering 40 percent to 50 percent less than your maximum price.
Learn your traders, how they act, which interests they have. Always haggle directly with the Chief, he is the ONLY one that may give you interesting discounts.
Build some confidence. First talk about something other than the price of the item you want to buy. If necessary buy first something else, small or cheap, don't begin immediately to haggle for something important or expensive that you really want.
Always be discrete: don't bargain or haggle so that everyone around you knows how much you are pulling down the price. Remember that sellers hate "going public" with their concessions. When -after haggling- a item still seems to be too expensive, QUIETLY offer the trader the price you are willing to pay. If he says: "I couldn't possibly accept that. I will be losing too much money," he probably will haggle further rather than let you walk away. Each time you walk away, they simply get crazier about closing the sale. You can come back later, eventually.
Try to find out which is the "ultimate reserve price" of the trader during the haggling. On the contrary -of course- never let him understand what your "ultimate reserve" price will be. Use your web-searching powers to find out. For automobiles, for instance, find how much the dealer paid for the vehicle, then negotiate a price that includes a fair profit for him (and a huge discount for you). Remember that a "fair" profit is just around 1 euro for every 50 euro on sale (so 100 euro for 5000 euro and so on tipically 200-300 euro MAX when you buy a car).
Flinch! The most common tactical mistake that consumers make is to remain calm in the face of their counterpart's proposals. It's better to flinch Always appear shocked and surprised by any "outrageous" offer. You might think a stoic demeanor looks professional, but in the haggling business it will cost you.
Ask your enemy for guidance - a good tactic: "I can't afford this price. Could you offer a discount, please?"
Use wisely the time. Time is your ally. Traders are often, after a long haggling, pretty happy that they can come to a bargain, and are ready to leave a litle more. A long haggling WITHOUT a conclusive sale is just lost time for them (but also for you, unless you'r doing it in order to learn :-)
When buying a car, you'r not supposed to have the trader making more than 200-300 euro profit on the price... if your haggling has the sellers losing just one hour, that's quite a good profit for him if he sells, that's quite annoying for him if he doesn't. Take advantage of this :)
Try to find some defects in your target, but do not exaggerate or heavily underline them: just point them out discretely, as if speaking to yourself.
Always exaggerate the value of your offer and always deny the value of the traders' offers. Use humor for this, it often pays out.
Run around the end-price. When the difference between offer and counter-offer begins to be very small, it means that the deal is near. Here you have a chance to add something more: "just give me the batteries as well and I'll take it". However never offer to split the difference in price. Always wait for the other side to split the difference; it gives your counterpart a feeling of winning and then, if you manage to split the difference again, it'll be in your favor.
If you encounter big difficulties for your target, and if you notice that the deal is drifting away, just wide the offer: "And what's the price if I buy THAT object as well?"

More haggling advices

Here some more advices:

Imply that you're going to "shop around." This frequently has dramatic results.

The fair market value for any item at a flea market or garage sale that is not collectible is usually about 1/4 the retail price - less if it's damaged, more if it looks or is new or still originally packed.

Special hotel discounts
Always call hotels directly. Don't call the 800 or similar reservation lines, when booking a hotel. ALWAYS ask about special discounts when booking a hotel. If they have some, and they almost always have, they wont tell unless you ask. Check everything on their web-site PAST DISCOUNTS may be very useful when haggling.
Once they tell you there is some kind of discount, ask if they can do better than that, if not tell them you'll call them back after having shopped around in other hotels. Chances are you'll really get the absolute minimum price they can do for you.

Wangle free upgrades!
Thousands of holidaymakers every year get five-star service at three-star prices simply by wangling an upgrade. And - more important - this is quite easy to achieve: just try it out by yourself: ring several travel companies posing as an ordinary punter. First, ask for rates for standard accommodation and then request the next grade (or two) up for nothing. Many will go for it: you will be amazed at the results.
If you can hold your nerves, the best deals are available late afternoon of the day required, when hoteliers are itching to fill empty rooms. Generally, the further ahead you're booking, the less likely you are to manage an upgrade.

Before agreeing to a price, pause, tilt your head and look like you're doing massive calculations with your budget. Wait about 30 seconds to see if he'll give a lower price. Either accept or slightly raise your offer. In that case keep smiling and make up stories like: "It’s for my sister who’s about to get married"

Watch out for the "guilt" trick.
In case you haven't noticed, every desk in the dealer's sales department is covered with photographs. And if he's selling cars, not photographs of cars, as you might expect, but photographs of children and teenagers. Midway through negotiations, a good salesperson will bring the matter up. "Little Johnny's going to need some braces next month" or "I've got three beautiful daughters, all of them in college." The commission the miserly dealer pays them ("their only source of income") comes up next. A smooth operator will soon have you feeling guilty for trying to hack away at the commission they desperately need for little Johnny's braces. You don't fall for this because you are aware that they make a reasonable profit and you know this is a manipulative attempt to send you on a guilt trip. Ignore this tactic, or reverse it with gusto and irony: "I need a car like this to have enough space for the mechanical lung of my youngest son" or somefink on these lines.

How it really works (by Old haggler)

Imagine you go to Jaipur (Rajastan), in order to buy some cheapo pakistani Emeralds.
Of course you have to know the real market value of the stones you want to buy, and you have to know your stones cold (4 Cs: Cut, Carat, Colour and Clarity), la va sans dire.

In case of pakistani 'swat valley' emeralds (be careful to avoid those of the "smudged" clarity coming from the Afghan Panjshir Valley, and -my advice- only buy pakistani emeralds in India -that means Japur- IN ORDER to avoid the Afghan crap), chances are that you'll be able to cover your plane ticket and your expenses and also be able to roam all of beautiful Rajastan for free, maybe even into wondrous Jasailmer. How? Just re-sell a small amount of the emeralds you have bought once you come back (note how precious stones have the advantage that don't take much space and you can hide them wherever and whenever, even during wars, hurricanes or sudden devaluations :-).

Yet, amazingly enough, even when everyone and his dog knows the following bartering game, similar transactions will often enough run always around the following well-trodded paths...

A typical "emeralds" transaction
You will be offered a seat and something to drink. Point out that you have been in their store, in this very store, many many years ago (be vague about the exact date) and already once upon that time you really did admire their wonderful selection back then, and add with sincerity that you are now really impressed with the variety of items that they have in offer nowadays. This 'My gosh, you really did develop a lot over time' trick often works.

Comment that you purchased -say- "a necklace and some rings" the last time you were there (depending on what you see around you). Be vague, duh.

They will welcome you back to Jaipur and to their store. Have another tea, sip it slowly and keep your naïv eyes simply hovering around. Don't say nothing for as long as it will be necessary. When the silence will be unbearable, the trader will speak to you.
Show some (tired | bored) interest on something he'll shows you. Move him slowly, and without him noticing it, towards your real target (say a set of cut and unmounted stones).

Have now the sales person pull out your targets from the glass case, or from the safe, or from wherever they might be.
Look at them warily, but show just a very vague interest. Have a good deep look nevertheless, by all means. It's still a game. The better they understand that you know what you are looking at (supposed you do know what you are looking at) the less outrageous their first haggling price will be. At the same time you should not show that you are interested in a given target. Ask them if they have good Afghan Lapislazuli, just to play ball. Then pick again one of the good emeralds (but not the best one) and look at it thoroughly. Now is the moment to bring out your eyeglass jewel lens, but still act very casual.
He/she will remark that you really have a great taste
Inquire about the price: "special price for my foreign friend: 6000 euro". Now in the case of this set, this is waaay off the mark, but you of course have to know it. Let's imagine, so that you can understand the following, that you value the set at around 2000 euro value once you are back in Europe, and around 600/800 euro value in Jaipur itself.

Look a little shocked and dazzled, then calmly reply: "It is truly a beautiful set, but I just can’t afford it for this price" . Never ever say "you'r a thief!".
The sales person will reply something like "How much do you want to pay?"
Answer: "What is your really best price?" They will come back with something like "3000 euro" or something similar, between one half and one quarter less than the initial price (depending "how suckerly" you did look like).
Thank a lot for showing the target to you, begin making your preparations to leave, and again state that you "simply cannot afford it for that price". Add something like: "It is just out of the price range for a poor teacher" or something on these lines. Continue with some 'matter of fact' teaching info: "Not all foreigners are wealthy, as I am sure you realize... I saved and saved for years to be able to afford this trip to India... and while worth every cent, I just cannot afford this beautiful emeralds set for that price".
Often you'll hear the seller say: "Let me phone up my boss".
The seller will disappear for a while (boss is actually in another room). Five minutes later, he/she'll come back and state: "My boss said that we could sell it at 2000 since business has been rather bad due to (the weather | the war | the unrest | the terrorists | the moon)"
Immediately reply, but be kind and gentle: "That is so very generous of yours, and really worth every cent of it, but my teacher’s salary just doesn’t accommodate making such a major purchase right now".
Now lower your head and say "to yourself": "These emeralds are indeed very beautiful, but I can’t afford them this time..." -and now to the salesperson: "maybe I will be back in a few years and maybe I will have more money to spend on such beautiful luxury items!".
The trader (may | will) say: "Let me see what I can do".
He/she will go back to some closed office and disappear. Out of it will now pop the "big boss" smiling and very well dressed.
He (may | will) say: "I really want you to have this beautiful set, let me see what we can do. I hope you'll come back again and send your friends" (and he'll smile all the time).
He will consult his books, his PDA, shuffle around, and then write down a number -say- 1000 or 1200 on a piece of paper.
He will hand to you the paper snippet, in great secrecy and confidence.
He will state: "That is the lowest I can go".
Now is the moment you really have to decide.
Either that IS the lowest price that you will be able to get him down to, or it is not. It's up to you to judge.
If you know what you'r buying, and if you know that he's still making a decent profit, BUT you are positive that you'll make a decent profit as well, just go for it and move to the next shop.
Else give him your hotel-address and tell him you'll have to think about it, you want to look around a little and you will be back tomorrow (and move to the next shop anyway :-).
Chances are he'll not call - if you exaggerated - or he will call if you didn't.
Anyway you'll learn something about haggling :-)

That's it, more or less.
Feedback: josecar and then the ALT+64 character and then yahoo and then dot com

Lately, many of our more industrious and investigative readers have taken it upon themselves to supply our searchlores offices with documents which purport to complete and/or further illuminate this section. We send our thanks to the readers who provided hints and material; like-minded souls are encouraged to send further discoveries and suggestions to the address of the responsible of this site, that you'll find listed elsewhere.

You are deep inside fravia's www.searchlores.org

back to the reality cracking section