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Haggling and Shame: Why you shouldn’t be afraid to start with low offers

June 9th, 2010 No comments

Remember my article on basic haggling theory? In it, I explained that a seller has a minimum price in mind below which they will not sell an item. The idea is to get an offer on the table that does not overshoot that minimum by too much. Since you don’t really have any idea what a seller’s minimum price is, if the seller asks you to make an offer and you make an offer that they like, they will accept it on the spot and that’s the end of the transaction… and you missed out on some extra cash you could have kept in your pocket.

But why isn’t making low offers just as easy as understanding the above logic? The constraint is social – e.g., the risk of insulting someone, of looking like a sleazebag, and more importantly jeopardizing your ability to make a purchase at a price you would have otherwise achieved had you not looked like a sleazebag. While you should obviously modify your offers to fit these social considerations, I believe that people vastly overvalue shame, especially in financial issues. If there were one point I wanted to communicate in this article, it would be something simple: start making low offers and to hell with the shame.

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“Should I buy this?”: Understanding your costs as a Garage/Yard Sale Reseller

April 21st, 2010 3 comments

Our natural instinct when assessing a potential resale item is to simply compare the price we get it for at the garage sale to the sale price we expect to get on eBay, based on doing a search of eBay completed listings or using Terapeak. Generally, using this rough schematic won’t get you into too much trouble, but it could lead to you being less efficient than you could be. So, you often find yourself asking, “should I buy this?”

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Basic Haggling Theory: Negotiating Lower Prices (a.k.a. making more money)

April 19th, 2010 2 comments

You’re at a garage sale. What happens differently when you make an offer of $30 on an item the seller would have otherwise sold to you for $20? Well, nothing, except you’ve given up $10 you would have otherwise had. The money went into the seller’s pocket instead of yours. Haggling is making sure that money ends up in your pocket instead of someone else’s. Simply put, people have beliefs and perceptions that affect their offers in a haggling situation. When they are known to you, you can adjust your haggling strategy such that you to capture a bigger share of the trade surplus, and in turn make greater profits off of your items.

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