Be cheap and haggle

Be cheap and haggle (hustle).

Haggle

Master the art of cheapness and haggle (aka hustle). 

 

The past few weeks have been a pretty interesting and exciting time in my life. I resigned from my teaching job to start a financial education company and grow Millennialmoneyman.com, and much more importantly got married this past weekend! Because of those two life changing events I have had several large purchases come up that I normally don’t have to deal with, which I realized I could turn into a teaching moment for other young people like me.

When you get married, you have to buy a bunch of stuff. Really…when you get into your mid-20’s you have to buy a bunch of stuff, and it wouldn’t hurt to be good at it. People my age don’t realize that you can get better prices on big ticket items, and it is hurting their pocketbooks in a HUGE way.

Haggling is a skill that all Millennials need to master.

 

Before I tell you the essential steps of haggling below, please understand this: You can’t just roll up into the grocery store and try to get a better price on a bag of chips. It only works on certain things. (However, if you try it at the grocery store and it works please let me know…supposedly you can haggle the price of meat, bread and lobster. Who knew?)

Millennials are pretty good at buying junk from online retailers that are totally free from human interaction. The only thing you need to waste a bunch of money in this day and age is an internet connection and a credit card! My professional guess is that we suck at negotiating in real life, because most of us have the real world people skills of a beta fish.

Learning how to get a better price on items is a bit of a lost art for Millennials, and can feel pretty embarrassing if you aren’t comfortable with what you are doing. Feeling uncomfortable in a purchasing situation leads to getting a horrible deal for you, and a freaking awesome deal for the salesperson. Fortunately,  haggling is easy and you can apply your hustled savings towards your student loans, credit card debt, or investment capital to begin building wealth!

You just have to know a few simple tricks.

One of the things that my wife and I had to purchase recently was my wedding band. I originally wanted a tungsten carbide ring (which is honestly pretty cheap compared to other metals), but she wanted me to get something a bit nicer since it would be on my finger for the next 50 plus years.

“Happy wife, happy life” is a real and serious thing people…so I immediately went with white gold instead to keep the peace. I wasn’t comfortable trying to buy something as important as my wedding band online, so we went to the mall – which I hate. Malls are awkward social hangouts for teenagers disguised as a marketplace. Regardless, I knew that I would have to deal with a salesperson for this purchase.

I used to be intimidated by salespeople until I started learning how to haggle. Now it feels like a fun mind-battle with the person on the other side of the counter. 🙂

Below is my quick how-to guide for haggling. I used it to get almost 40% off of the sticker price for my wedding band in about 10-15 minutes of negotiation. You can use this guide in a ton of situations where you want to save some cash that you can use to pay down debt or build up wealth. Even though I was buying jewelry, you can apply the following haggle steps to negotiate anything from car tires (which I did recently as well) to appliances or even rent:

1) Realize the main goal – cut into their markup.

No matter what the item is that you want to purchase for a lower price, you need to get a feel for how much of a markup that there is on the item. That is how retail companies make money. They buy goods at a low price, and sell at a (usually) much higher price. Your ultimate goal is to see how much they are willing to dip into the margin to make a sale.

Before you get started you need to understand that there IS a limit to how low you can get the salesperson to drop the price on whatever you are buying – and they will stop negotiating with you once you hit the target price. Your goal is to get as close to that as you can.

2) Embrace the feeling of being a cheap person.

This one is tough because you will feel like a complete cheapskate when you are trying to get the salesperson to give you a lower price. In this country we get a sense of pride from being able to “afford” something and pay well for it. In reality, most of us are just trying to pretend that we aren’t as poor as we really are by showing that we are willing to pay high prices. Forget about all of that nonsense. Rich people are rich because they don’t spend all of their money. Period.

When it comes to the successful haggle, you should be as cheap as humanly possible. The salesperson or the people within ears reach can judge all they want, but they don’t have to pay your bills when you leave the store.

3) Keep it simple at first. Start by asking for a better price.

The haggling process can start out unbelievably easy. Ask for a better price, nothing fancy. If the salesperson bites, then it’s game on. This means that they have a decent markup, and they just tipped their hand that the price can be negotiated.

At the big box jewelry store I was shopping in, they cut $150 off of the price tag just because I asked them to. The scary part is that many people pay the first price without even asking! There are several ways to achieve this step, but I usually go with “What’s the best price you can give me for this?”. They will probably give you a lower quote, but the game isn’t done there. Their “best” price is usually pretty far off from YOUR “best” price. Just trust me and keep reading for my secret haggle weapon…

4) Tell them that you like what they are selling.

Haggling is a game of psychology. If you mention a few times throughout the conversation that you really like whatever it is that you are looking to purchase, you’ll see something pretty interesting: The salesperson will get noticeably excited and their body language will change a lot (more smiles, a little more animated, etc.)

When a salesperson smells blood in the water, they will try a little harder to make a deal. They are hard wired that way…they want the commission and think that they may have you hooked. You WANT your salesperson to feel that way, because they may dip lower into the markup to make the deal with you.

5) Mention their competitors and walk away.

Sales people want your business, but they REALLY don’t want their competitors to have your business. After I was quoted a lower price by the salesperson for my ring, I told them I was going to go check out some other jewelry stores and look for a better price for a similar item.  The salesperson will either say something like “Oh you’ll be back”, or drop the price down a little bit more. Keep their new number in the back of your mind but don’t take the deal…you aren’t done yet.

Walk away and go check out the competition. If there isn’t really a competitor nearby, go somewhere and hide out for about 5 minutes. You don’t want to take too long though – they need to remember who you are when you come back.

6) Hit them with my secret weapon – Awkward Silence.

People that work in sales are humans too, but it’s really easy to forget that when you are in a high-pressure sales situation. They generally hold all the cards and have the advantage over you (the buyer) when you are in their store. They know the markup, have sales training, and know lots of little tricks to get you to cave at a higher price than you want (i.e. bringing another salesperson over so they can double-team you and pressure you into a decision).

Luckily for you I’ve found something that neutralizes most of their advantages. If you have already completed steps 1-5 and come back in to the store for the final round, do this:

Be really quiet and make it weird.

Yep. Have you ever been in a conversation that turns into awkward silence, and wanted so badly for someone to end it and say something? It works the same way in haggle land, but the salesperson will end it with dollar signs. Here is how I do it:

1) Tell the salesperson you really want the item, but you just don’t think it’s at the price you can afford. (They will try to hold their ground because they think they have you right where they want you).

2) Stare at the item, and literally don’t say anything for about 2-3 minutes. Make it as uncomfortable as possible, and DO NOT BREAK THE SILENCE FIRST. If they try to talk or ask a question, ignore them and stay quiet.

3) Sigh a few times and look sad. Seriously.

4) They will crack and make their last offer in an attempt to end the horrific silence. $$$$$$

5) Celebrate (internally).

If you are wondering what that looks like in real life – two completely different jewelry stores magically found a $100 off coupon in the back of the store after I hit them with the awkward silence trick. It was pretty hilarious really – my wife couldn’t believe that both stores did the exact same thing. After that, I chose the ring that I wanted at the new haggled price, and we left. They got a commission, I got a ring and supported capitalism. Win-Win.

P.S. – A lot of places will try to push their special credit card on you in an attempt to “help” you purchase the item that you want for low monthly payments. They tried it on me at one jewelry store, and it was hard for me to not laugh at them. For the love of everything good in this world – don’t do it. Also, if you have ever haggled for something awesome, let me know in the comment section – I want to create a haggle list for my readers!

 Live differently. Your bank accounts will thank me later. ~M$M

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15 comments… add one
  • Alyssa @ Generation YRA May 18, 2015, 11:14 am

    Yes, what a great guide! It is so incredibly true. Most people don’t even attempt to negotiate/haggle, which leaves plenty of opportunities for those of us who take the chance to!

    My most recent negotiating experience was with our cable service provider. My fiancé and I decided to cut the cord, and use internet & streaming only with a Roku (this experience is probably one a lot of people go through)! I knew the phone call was going to be lengthy because these particular reps from said company always try to talk you in circles. Prior to the phone call, I armed myself with all the figures & rates from local competitors (as mentioned above) to reference in negotiation. Preparation is key!

    When I told the rep we had been loyal customers that wanted to downsize our bundle to internet only, they came back with alternatives that equated to the same (insanely high) cost. I hit them with the idea that we wanted to leave because competitors in our area offered X, Y, and Z prices – but would prefer to stay with them because we appreciate their customer service (always great to be positive)! They continued to talk in circles, put me on hold to “speak with their manager,” and inevitably I determined this rep was not going to allow the downgrade to happen without getting something else from us in return. I ended the phone conversation stating I was disappointed and would need to evaluate whether we would stay with their company or not.

    I wasn’t going to stop there though, perserverence! I called the very next day and spoke with a new rep. I barely had to negotiate (maybe they had something on my file stating I was about to leave as a customer). He downgraded our bundle to internet only with no hassles, and took great care of me. Now we are happily using our Roku without a ridiculous excess of cable channels.

    So there’s my negotiation! Preparation, implement emotion and/or positivity, and perserverence.

    Thanks for the great post, and congratulations to you & your wife!

    • Millennial Money Man May 18, 2015, 10:07 pm

      Wow, isn’t crazy how you can get what you want by asking a bunch? I’m assuming most people just give in pretty easily. Luckily I haven’t had cable for years now…seems like a hassle.

  • Kim@YourFinanceProfessor May 18, 2015, 9:08 pm

    I honestly would not even think of doing this because generally speaking, the person you are talking to in the store has no authority whatsoever to change the price. I would guess that the exception to that might be small businesses. Have you noticed that difference?

    • Millennial Money Man May 18, 2015, 10:08 pm

      I used to think the same way, until I haggled at the tire shop and got a way better deal in about 2 minutes. Never hurts to ask, the worst thing that could happen is that the person in the store says no right?

  • Jim May 21, 2015, 2:55 pm

    I prefer to negotiate, haggling just sounds so crude. Negotiating is an art form that must be honed to a sharp skill.
    If you don’t ask, you don’t get.
    However, Negotiation is a two sided coin. suppose you are on the other side of the sales counter. How can you combat some one that is trying to negotiate with you? I guess that is for another blog….
    Anyway good job on the ring and what did you do with the savings?

    • Millennial Money Man May 25, 2015, 12:00 pm

      Haha, haggle is kind of a crude word. It is an art form, and I’m definitely still working on it. Haven’t done anything with the savings yet, I’ll probably invest them shortly.

      • Matt Sep 21, 2016, 9:32 am

        I used to work in sales at a retail store, and people were fond of trying to negotiate our prices. I guess this does work at many retailers and I know our competitors would do it, but our prices were already substantially better right from the start. I was always upfront on all purchasing packages available at the time, so when asked the, “whats your best price?” question, I need only to point at the signage. We did also offer the credit and usually with 0% interest or to knock off the transaction fee from the sale, which was sometimes a good push to get people on the fence to commit.

        • Millennial Money Man Sep 21, 2016, 11:06 am

          Interesting – thanks for sharing Matt! I’d love to pick your brain sometime about things you saw in the store from customers.

  • Tori May 21, 2015, 3:41 pm

    I needed two new tires and wanted a new full-size spare wheel. I came into the shop, not realizing that I had a second tire that could use a replacement, but didn’t have to be replaced immediately.

    So, I focused my discussion on how I really only planned on replacing the flat tire and that money was tight. When he tried to sell me the second tire because my tread was getting kind of low, I resisted, emphasizing money being tight. I asked him if he could give me a good price on a matching full-sized spare wheel to keep my tire…I didn’t want to be wasteful and was on a budget after all (if something happened to any if my tires, I would have a full, matching spare to prevent me from having to make an emergency purchase). I waivered on the additional tire until he made it clear that he no longer had a full set of matching wheels, so he could give me a good deal by piecing out the wheels he had. I kept
    quivering until he took both tire prices down significantly, too.

    It was a win-win. He sold an extra tire and discontinued spare wheel, I got three items for about the price of two.

    • Millennial Money Man May 25, 2015, 12:02 pm

      That is awesome!! I recently bought some tires for my wife and got a decent discount too…just by asking. Who knew that you could haggle on tires?? A few years ago I would have taken whatever price they quoted me from the beginning.

  • Nate from LendEDU Jun 7, 2015, 4:08 pm

    I laughed out loud when I read “be really quiet and make it weird”. I love that strategy. Awkward silence is the worst. Everyone will be sure to give in when I use that.

  • Vic @ Dad is Cheap Jun 24, 2015, 11:52 pm

    Great post! I need to make it a point to haggle a little more!

    One awesome thing I did recently is haggle a promo offer for my cell phone that I was ineligible because it was only for new customers. I’m on Cricket Wireless (super cheap – $35 plan) and they were doing a promo in which they were offering $100 credit to T-Mobile customers to transfer over. After a 20 min call in which I demanded the same credit, they offered me $50! Not too shabby.

    Another thing my wife does is speak a different language in front of the salesperson to me or her family. She’s Cambodian so she’ll have a tone where you can tell she doesn’t like the price. This usually makes the salesperson think they’re losing a sale so we can usually get a cheaper rate this way. Your mileage may vary using this tip if you don’t speak any other languages!

    • Millennial Money Man Jun 25, 2015, 7:36 am

      Hahahahahaha!! That is awesome (and sneaky). Unfortunately I don’t know any other languages.

  • Jen Jun 25, 2015, 1:37 am

    All great tips! My husband and I haggled like crazy for wedding things and also two cars. My husband’s favorite move, especially as a return customer, is to say “listen, you gave me a great deal last time and that’s why I’m back. I want to give you my business, so how about -insert lowest price-” Somehow the salesperson always wanders off to speak with their supervisor or manager and return with a better offer. There are also certain retail chains you can always count on to keep secret coupons at the cash register, usually those chains where associates make commission, sales bonuses, or have strict sales goals.

    • Millennial Money Man Jun 25, 2015, 7:34 am

      Thanks! That’s a great strategy too. The coupon thing is hilarious. At one of the stores I went to, they pulled out a coupon and it was expired when they tried to run it.

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