Sunday, July 4, 2010

Let's Make A Deal

Let's Make A Deal: The Art of Haggling
When hunting for lower prices for goods and services for the home, there may be room for negotiation.

Here's a look at how to haggle and what products and services to consider.

It never hurts to ask.

A department store might have $100 leeway on a chair that hasn't been selling well.

Your favorite home contractor might reduce his fee.

A store manager trying to sell a pricey appliance could drop the price, waive delivery or throw in accessories.

When hunting for lower prices for goods and services for the home, "There's more room for negotiation than we normally think," said David Bell, a business professor at the Wharton School of the University of Pennsylvania. "If you're bold enough to offer something lower, it's usually worthwhile to enter into negotiation."

Consumer Reports' polling indicates that more people are starting to haggle — and more are succeeding, according to executive editor Greg Daugherty.

"You have every reason to try to haggle," said Daugherty, who cites the economic downturn as the reason for the increase. "If you're polite and say you don't have that much in your budget, the people you ask won't be surprised or upset. Give it a shot."


"We tend to think of big-ticket items — houses, cars — when we think of negotiation," said Richard Reuben, a professor of law at the University of Missouri-Columbia. "But truly, almost anything is fair game."

If the expiration date on a gallon of milk is close and you don't have a lot of money, a manager might be convinced to lower the price, Reuben said. But Reuben noted that the margin on lower-priced goods is so small that negotiating over them usually isn't worthwhile.

"If you start looking around the house at higher-priced items, you'll see where you can haggle," said Devavrat Purohit, a business professor at Duke University.

"Interior decorating, installation of blinds, carpets, furniture, mattresses — are all negotiable. Things purchased infrequently have leeway."

Experts agree that boldness is key. "Many get embarrassed, but there's no harm in asking for a better price," Purohit said. "Some people will fold quickly, don't have patience or will get uncomfortable. You'll get the best deal if you don't mind engaging in haggling."

Many Americans don't like negotiating, Purohit added, but often if you pay the stated price, essentially you're paying a convenience fee not to haggle.


Electronics and appliances are some of the priciest home goods with some of the highest markups, making them ripe for haggling, said Bell, who negotiated roughly $2,000 off a high-end television.

According to a May 2009 Consumer Reports survey, 71 percent of those who tried to haggle on electronics and furniture got a better deal.

"Managers do have some wiggle room on pricing," said Jill Nezworski of Best Buy. "But customers should expect to pay the price on the tag."

While Best Buy did not elaborate, experts suggest consumers are in the best position to negotiate for electronics and appliances at the end of a quarter or month (when a store might need to meet a quota). Haggling may be more effective on higher-priced goods, products that received negative reviews, floor models and when bundling together.

"Try to buy in bulk," Purohit said. If you need a vacuum cleaner when your dryer goes out, buy them at the same time.

Price matching is another form of negotiation, Purohit said, so watch competitors' listed prices and advertisements.

Whether at an estate sale or a large store, furniture is often ripe for negotiation, too.

Interior designer Susan Prestia says that most furniture can be discounted roughly 40 percent from the manufacturer's suggested retail price.

New shipments of furniture usually arrive in January and June at large furniture stores, Prestia said, so look for the best deals at sales around Memorial Day and Christmas.

But if you don't want to wait for a sale, it doesn't hurt to ask for a discount now.

That's particularly true with mattresses, which have among the highest markups, Daugherty said.

"Half-price sales are frequent, and it's a good area to bargain." Even on top of a sale, he said, ask for more off and free delivery.


Akin to buying in bulk, teaming up with one or more neighbors is a great way to cut costs on landscape and snow-removal services, said Sean Baxter, owner of Lawn and Landscape Solutions in Overland Park, Kan. "With maintenance, volume brings discounts."

Baxter says in several instances he has lowered a customer's cost when a neighbor has hired his services.
Servicing a homeowner's association is the best example, Baxter said, because it's viewed as one big piece of property. An individual mow might amount to just a few dollars if there are enough homes in the mix.

But even servicing just two neighbors' lawns instead of one reduces customer costs.

"One big expense that's eliminated for us is drive time," Baxter said.

"There is always leeway in prices," said Rick Bradford, who owns Complete Home Management, a home care services business in Liberty, Mo., that offers cleaning, pest control, lawn care and more. "If I have a set price for something and someone asks me to do it for less, I'll probably says yes."

Bradford says his company has the most leeway with maid service and the least with lawn care because of the cost of chemicals and other products.

"In this economy, I'm not going to turn away much business."      Source: Seattle Times

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