Negotiating with retailers

Published: Dec 09 , 2015
Author: Simon Kelland

 

Most "negotiations" with retailers are simple haggles; you don't need to deal with them and they don't need to sell to you so it's simply a case of trying to get the maximum discount in a one off sale.  Not a lot of skill needed to do haggle other than doing a bit of homework on the market so you know what a good price looks like, having the courage to propose the price you're prepared to pay and the fortitude to walk away if you can't get a deal (assuming you have the time and energy to go down the street to another retailer to do it all over again).

If you really want to negotiate this Christmas though, bear in mind a few simple guidelines:

- The salesperson is probably very busy at this time of year so don't drag out the process - a quick, efficient sale will get more movement than asking to see every variation of the product you're interested in.

- Owner operated and franchise stores are likely to give their staff more pricing discretion than the big department stores. Avoid the "I don't have any authority to offer discounts" if possible.

- Volume is very attractive for a salesperson so try to bundle as many of your purchases together as possible from one store, remembering of course not to reveal all your "carrots" in one go - get the salesperson interested in dealing with you on one item then introduce the next item in return for your proposed discount, then the next item and so on.

- The wishlist is a very important negotiation tool in retail transactions and will probably get you a better deal than the pursuit of a simple discount, especially on low margin items like electronics. Accessories typically have much higher margins than the main product so rather than pushing the salesperson for a potentially unrealistic discount, add a couple of Wishlist items towards the end of the deal. For example if you're buying a laptop, rather than trying to get a large discount, propose a small but realistic discount but generate value by adding in Wishlist items like a spare aftermarket power supply, an HDMI cable, carry bag, mouse and so on.

- Remember that the market is real - supply and demand will largely determine how much leverage you have in any deal. "Hot" products will not yield discounts (no good trying to get cut price Star Wars merchandise this Christmas for example) so as long as you can live with the just superseded model, you'll find salespeople very flexible when faced with a customer who can help them move some old stock.

Summary:

  • Do your research so you know what a good deal looks like;
  • Have the courage to propose the discount you want;
  • Use incremental volume to generate greater discounts;
  • Use the wishlist to add value towards the close; 
  • Look for just superseded models rather than the newest "hot" product; and 
  • Be efficient, don't waste the salesperson's time - they'll reward you with more flexibility if they can close the deal quickly and move on to the next customer.


Good luck and have a Merry Christmas.


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About the author:

Simon Kelland
Simon is a Chartered Accountant, a Member of the Australian Institute of Company Directors and a Trustee of the Committee for Economic Development of Australia. He holds a Bachelor of Commerce degree from the University of Tasmania and has completed executive programs at IMD in Switzerland and Stanford University Graduate School of Business in the USA.

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