Anyone who has travelled or shopped in markets knows that there is real value in bartering – many vendors are prepared to deal to make a sale. We are less inclined to do it in our own back yard. In terms of saving money, it is far more efficient than spending money driving out of your way to save a few cents – we’ve all met people who will drive great distances to save 50c on a packet of sugar.
Maybe it’s time to try haggling to save money?
Although haggling is not part of the kiwi shopping culture, the truth is most shopkeepers don’t mind having a bit of a haggle if it means they will get your business. Most things are negotiable, so you should not feel shy about asking some one for “their best price,” or asking if they “can sharpen their pencil.”
We think of it a bit like this – it’s a free country, and as a famous economist once said (paraphrased into our own wording), “If they don’t wanna do it, they won’t.” In other words, in a free market someone will only accept your offer if it’s in their interests to do so.
The thing about negotiation is that because most people don’t like it, they don’t bother doing it – or if they do, they try to get it over and done with as quickly as possible.
The trick is to go into the chat about price armed with a little bit of knowledge, like how much you can buy something for elsewhere. The other trick is to always be polite.
If you get to a point where you can’t agree on a price, start working on some other issues – like negotiating the payment terms, or including some extras that you would otherwise have to pay for in cash.
For example let’s assume you want to buy a second-hand stove from a used appliance store. The asking price is $400. You offer $350, but the lowest the dealer will go is $375. You say that this is more than you would like to pay, but you will agree to it – if the dealer will offer a 12 month guarantee on the appliance instead of the usual six months.
If you are dealing with someone who does not have any authority to negotiate on the price, ask if the manager is available to chat about the price.
Haggling is well worth doing and the savings will put significant money into your pocket. Let’s assume that over the next 40 years you spend $400,000 buying things – that’s $10,000 a year buying big-ticket items. Now let’s assume you are able to haggle 10% of the price from everything you buy. At the end of the 40 years you will be $40,000 better off simply because you haggled – and that’s ignoring the compounding interest you would earn on that money if you used it to make additional mortgage repayments!
Most sellers will give you a 10% discount without a second thought. And if haggling is approached with a cheeky smile, it can be a lot of fun. That’s what living off the smell of an oily rag is all about!
Now to haggling of a different sort. In these days of cheap travel, the challenge is to save money on accommodation.
If you are planning to stay at a hotel or motel then see what you can do to get the price down. Hotels and motels do have flexible pricing and there are lots of ways to get a better deal.
You could simply ask if the hotel is currently running any “promotions or packages.” (That’s a nice way of asking for a discount!).
If you have a business card you could ask for their “corporate rate.” Sometimes they will fob you off, but more often than not, they are only too happy to sharpen their pencil and give you a good deal. If you are a regular customer then you certainly should receive a discount.
Shop around online. Check the web sites of your favourite hotel chains. They may have some online promotions. Have a look at www.lastminute.co.nz – it does not even need to be a last minute booking to get a deal; you can book weeks in advance. Another site to look at is www.trivago.co.nz.
By Frank and Dr Muriel Newman. Read more here.
Please send in your questions and tips to share with others by visiting the oily rag website (www.oilyrag.co.nz) or by writing to Living off the Smell of an Oily Rag, PO Box 984, Whangarei.