What A Reality Show Taught Me About Negotiating

Hank at Own the Dollar doesn’t need Toastmasters or debate club to teach him how to work the negotiation table. He says he gets all the know-how he needs from the History Channel show American Pickers, in which hosts travel the country looking for pieces of American history.

He is advice on how to haggle — or in It’s Always Sunny in Philadelphia terminology (the linked video has a little off-color language), “barter” — like an American Picker:

Don’t name a price first. Whoever throws out a number first puts themselves at a disadvantage by showing their cards.

Be prepared to walk away. You have no room to negotiate if bailing isn’t an option.

Specialize and be knowledgeable. Know the ins and outs of the product so you won’t get swept up by emotion.

Lump things together. Bulk deals become a possibility when you go multiple.

Keep the end goal in mind. Set out a plan of attack, then execute that plan.

What negotiation tactics have you learned from TV?

What You Can Learn About Negotiating From The American Pickers TV Show [Own The Dollar]

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  1. vastrightwing says:

    Don’t name a price first. Yea, I was shammed by that one in Kuala Lumpur. Wanted to buy a fancy watch and the guy gave me a price of $50. I came back with $35 and he said sold. My friend then bought the same watch for $15! Boy did I get ripped! The watch lasted about 2 months.

    • davere says:

      When I traveled to Thailand and China I always asked the vendors how much they wanted for an item, then I would offer half or slightly less than half of what they asked for. They would act like I was crazy and I would walk away. They would then call me back and offer me the item at the price I had offered.

      They still made a profit and I still got what I wanted without any heavy duty haggling. It worked every single time.

      • AnthonyC says:

        Depending on where you were shopping, you may still have gotten “ripped off” by local standards. In more touristy areas, asking 10x the normal price or more is not unusual. When I was in beijing a few years ago, a woman tried to sell be a silk shirt for the equivalent of $110 US. I walked away with it for $15, and one of my chinese friends told me I paid too much. Another person in my group was looking at a jacket the merchant said was 3000 yuan. He got it for 100.

    • Ben says:

      But… but you didn’t name a price first, he did! So how does your example demonstrate the usefulness of this rule?!

      • partofme says:

        http://en.wikipedia.org/wiki/Anchoring

        Really, what we learn here is that the first rule (Don’t name a price first) is worthless if you don’t have the third rule (Specialize and be knowledgeable). If you have no idea what something is worth, what you should be willing to pay for it, and what a seller should be willing to give it up for, you’re at a disadvantage no matter who throws out a price first.

      • CoachTabe says:

        He’s saying the rule ISN’T useful. By letting the other guy name the first price, he started out higher than he would have had he lowballed the guy first himself.

    • nbs2 says:

      The name your price nailed us in India. The missus was looking for a scarf, saw one she liked and was told to name her price. She opened with what she thought was an absurdly low $5 (pretty, silk). Sold without hesitation.

      • pecan 3.14159265 says:

        But if both you and your wife felt that $5 was a fair price, why lament the fact that you opened with a price first? The people in India really don’t make any money at all – $5 can go a long way for them. For me and you, $5 is an absurdly low price – for them, it’s a few meals. I don’t think it was such a bad thing that you didn’t negotiate lower considering you’re in a poverty-ridden country and people are just trying to make enough money for food.

        • zrecs says:

          +1

        • Nigerian prince looking for business partner says:

          I completely agree. I used to travel abroad for work and whenever I found myself getting bent out of shape haggling, I’d convert the local currency back to dollars in my head and realize just how much effort I was putting into saving 50 cents or a dollar.

        • slopirate says:

          You’re getting trade mixed up with charity.

        • jurupa says:

          FYI $5 US is 232.8000 rubees.

    • Smashville says:

      This is why you go the Price is Right method.

      When in doubt…$1.

  2. MDSasquatch says:

    I too have watched American Pickers; I have learned that it is easy to fleece the elderly and turn huge profits.

    • chaesar says:

      they don’t need money where they’re going

      • seeker1321 says:

        I don’t see it as fleecing the elderly. If you look at the locations they find stuff, most of those items would never see the light of day. The reason a lot of older people sell to them, is that their children show no interest in the stuff. So if they don’t sell it, it may just end up in a landfill somewhere.

        • chaesar says:

          as someone who spent four days in a row last week helping his mother-in-law sell junk to strangers, I concur

          • Not Given says:

            My aunt goes to garage sales and when she sees a box of costume jewelry marked with so much for each piece she asks how much they want for the whole box and it’s usually just a few dollars. Then she digs through it all looking for real stuff and sells it on eBay or at flea markets.

    • YOXIM says:

      Hahaha that’s awesome. Did you ever notice how they don’t actually turn any profits on that show though? All the “profits” are potential. Like they’ll buy an item for $100 and say “I think I can sell this for $200″. All of a sudden, they made a $100 profit even though the item has not been sold and no one even knows what it’s really worth at that point.

    • Jerem43 says:

      A lot of the crap they are buying is from hoarders who would normally not get anything from it any way. This stuff would end up in the trash eventually after they die, so why not get some cash that way.

    • madanthony says:

      Keep in mind that you are looking at revenue, not profit. They need to pay expenses – gas up their sprinter, pay their tatted hipster secretary, heat their big cinderblock warehouse, ect.

      The other thing to remember is that resellers have to dig through a lot of crap to find stuff, are taking a risk if the item turns out not to be worth what they thought it was (which has happened a few times – the “booby trap” and the Dodge).

      I watch that show and wonder how they make enough to pay their expenses and still eat.

      • wickedpixel says:

        “I watch that show and wonder how they make enough to pay their expenses and still eat. “

        They have a tv show.

  3. dwb says:

    On the History Channel’s Pawn Stars I learned when the seller starts playing hardball, the buyer can offer an amount lower than his previous offer. I can’t believe how well it works – it stops the seller in his tracks.

    • crashman2600 says:

      I also learned on Pawn Stars that an item worth 16k at auction is worth like 4k to the pawn shop. That show makes me so mad some times with the stupidity of the people that are selling their stuff.

      • eviljamison says:

        So are you saying you learned that if you have something valuable you should try to sell it to a collector yourself rather than a pawn shop that exists to make their own profit? Sounds like a great idea! No one forces people to settle, some folks are just desperate or too lazy to sell it for the most $…

      • Remmy75 says:

        I know the feeling watching pawn stars. The stuff that people come in and sell just boggles my mind. My wife says I have an Indiana Jones complex. Whenever I see someone selling a piece of american history for $2000, i get all pissy and start screaming. How can they sell that, it belongs in a museum!

        • Im Just Saying says:

          You, me, my girlfriend, everyone else I know that watches the show. If one more S.O.B. goes in there with an original copy of the Declaration of Independence….I don’t know what, but I give up.

        • pecan 3.14159265 says:

          Yeah but those people wouldn’t get anything from a museum except for a shiny plaque nothing their contribution (if the item went on display at all – most the Smithsonian’s possessions are in its archives for preservation). People who are in it for the money don’t want anything else but cold, hard cash. If I were sitting on something of significant historical value and I genuinely needed the money (or if it was an outrageous amount of money that I could never expect to make in my lifetime), I would take it to an auction house before I would sell it to a pawn shop. That way, at least the collector who bought it might bequeath it to a museum someday.

      • JulesNoctambule says:

        Sometimes the reduced profit is worth saving the hassle of getting the item to a venue where it would make top dollar. Besides, most auction houses that deal in rare items take a serious cut of the sale price.

      • saerra says:

        I love that show, but agree with you. But – I also wonder how much an auction house takes (the guy usually tells people an auction house will take 40-60% or something like that?) – if that’s true, then the sellers might actually be doing ok (because at auction, it COULD sell for much less, and they’d still lose 1/2 of whatever it brings in.)

        I feel bad though for the people who just don’t know where else to go to sell something,and could potentially get more money by choosing a better buyer.

        What I learned:
        – Don’t sell to pawn shops, you won’t get anything near what an items worth.
        – Do your research on what you have, what it’s worth, and who buys those items.
        – Negotiate! I hate negotiating (and am female) – but watching this, I can see that the pawn guys negotiate ALL DAY LONG, they’re used to it, and it’s not a big deal to them (versus the person off the street who is only doing it every once in awhile).

        Fun show though, wacky what some people find around the house. Makes me want to go hit up antique stores and thrift stores looking for hidden treasures ;-) !!!

      • pecan 3.14159265 says:

        Even if an item is worth $16,000 at auction doesn’t mean that it will sell for that much or that the seller will even see that much. Reputable auction houses also require several forms of authentication, a service most likely provided by the auction house and perhaps some of their preferred experts, and might cost some money. Then auction houses charge anywhere from 10% to 20% to market the auction, facilitate the purchase, and ship the product to the winner.

      • Weighted Companion Cube says:

        NOTHING is forcing them to accept the price they are given by the pawn shop.

        • Wburg says:

          No, but a lot of them are in tough places and sell because they need the money quick. The probably don’t shop around much in hopes of getting on TV, but still. Obviously in the end it’s all a business deal.

    • Nigerian prince looking for business partner says:

      I can’t believe how well it works – it stops the seller in his tracks.

      My wife and I just bought a car on Wednesday using this strategy. The dealer was asking $11,500 and I offered $8,750. The salesman countered with $9,000 on the condition that I buy it before 4:00 on June 30th so he could pad his June sales numbers.

      I said that I don’t like to play games, offered $8,500 and we got up and headed for the doors. By the time we got to our car, he went outside and agreed to $8,500.

      • Thyme for an edit button says:

        Wow, that’s awesome.

      • Nigerian prince looking for business partner says:

        It was a doubly good day. We already had financing arranged with our bank but we had the finance dept. run our info through their computer just for the hell of it. We’re now members of a local credit union who financed a used car at 2.8%. I had no idea how good of a deal CUs can be.

    • GuyGuidoEyesSteveDaveâ„¢ says:

      Also, act like you know what you are talking about even when your expert comes in later and says you are wrong. Also, say how much you really want it, and if it’s authentic, you HAVE to have it for your shop. Am I missing any more of Rick’s cliche sayings?

  4. chaesar says:

    definitely don’t let your emotions get in the way. your feelings for an object (or its novelty) may be strong at first but will eventually fade, maybe sooner than you want to admit, whether or not you buy it

    or maybe i’m just a hardass

    • Nigerian prince looking for business partner says:

      This is definitely the case when buying a car or a house. It’s so easy to get wrapped up emotionally with the big purchase that you become irrational. It’s always good to sleep on it before making an offer.

      • Dutchess says:

        I have a rule about car shopping…You never go alone.

        You must have a disinterested third party there to help you negotiate.

        I went with a friend and they had a dealer mark-up of $3000 on a Jeep and when we quoted the MSRP and asked how much they were willing to take off the salesman said “That’s not the full price, you need to add the Dealer Premium to the price”

        My response was, “Yeah, that’s the full price…because only a FOOL would pay it”

        It pretty much stopped that salesman in his tracks.

  5. joe says:

    the british show around the world in 80 trades has a guy haggling several times in every episode with his own money. he always seems to do the same thing:

    pick out a goal, start at half (buying) or double (selling) and see what the other guy says, then work incrementally towards your goal.

    e.g. to buy a watch i want to spend $50 so i’ll start with $25, or if i’m selling the watch i’ll start at $100

  6. nbs2 says:

    Part of the be knowledgeable, I’ve seen buyers on some show or another get too greedy and undercut the actual value. There is a point where the price is too low for the seller, and if you can’t get back above that line, they’ll walk away.

  7. FatLynn says:

    Think about what you can negotiate besides money. Free delivery? Cash payment? Warranty?

  8. thesadtomato says:

    You can also basically follow these rules to negotiate for salary and benefits when offered a job.

  9. Elcheecho says:

    it’s easier for pickers cause they don’t want any of the stuff they’re buying. it’s a place holder for money.

  10. AllanG54 says:

    A “fancy” watch does not cost $35. Or even $50. No matter what country you buy it in. Hell, a Timex is $50.

    • El_Red says:

      Girl’s watches tend to be more expensive. A beautiful watch is like a piece of jewellery. Not very practical but pretty. Often ”pretty” starts at 100$… And no particular brand in mind.

  11. Dutchess says:

    This was SOOO true in Morocco. I walked into a shop to buy a inlayed wooden box (sold them everywhere). I asked how much and the guy said $100. I said it was too expensive and put it down.
    I started to walk away and he stopped me…”$50″ ….sorry still too expensive…”It’s Ramadan…for you…$40″….sorry, I really was just looking…..”Okay, okay…$20….my family needs to eat”…..I walk away…. yelling after me…”$10…you wont find better price”

  12. GuyGuidoEyesSteveDaveâ„¢ says:

    As most people here know, I am a hoarder and a frequent flea market shopper, as can be seen here: http://s165.photobucket.com/albums/u45/gitemstevedave/flea market finds/

    That said, I think that you should say a price first. Just lowball.

    I also have a rule that if the price they throw out is WAY out of my set price limit, I just walk away. Even if as I’m walking away, they shout out a price that is at my threshold or below.

    To be knowledgeable about a product is a double edged sword. First, you sometimes hate to tell the person that they are wrong, and that will hurt negotiations. But also, they think you know the “true” value of the product and are trying to scam them. I collect Zippos and razors. I don’t resell them on Ebay, but because of my knowledge of them, they think I’m like the gold and silver people who try to make as much money as possible. That said, knowing a little something can help. A straight razor usually costs $30 to properly re-hone before you can use it, as over the years the edges oxidize and aren’t “shave ready”. I’m not going to pay $20 for a razor I will have to ship out to a honemiester and then might not be happy with for a total investment of $60. Knowing what exactly is wrong with the thing you are looking at also helps the seller, because if you do pass, they have some knowledge for the next person.

    Lumping things together is always a good idea. I usually don’t buy plain used Zippos anymore. Unless buying one allows me to get a ornamental Zippo for cheaper.

    • Outrun1986 says:

      I usually don’t say anything when I am buying something at a yard sale, I say “how much is this”, I don’t say the name of the item and I try to act disinterested. The trick is to have knowledge in your head but not show it. Sometimes things will be way overpriced for what they are, aka you can get it for a few bucks on ebay but the seller will want more for it than they can ever get on ebay (you might be better off buying it on ebay in that case if you really want it).

      If something is very overpriced I just walk away most of the times, if one thing is overpriced at a yard sale. We have found that most other people will do the same, because they don’t like to buy from an overpriced seller in general, its just a very big turn off.

      There are also sellers who will try to fleece you, oh you can get x amount on ebay for this item… and then try to sell it to you, most of the time when this happens you are really buying junk. Some sellers will tell you things that are collectible and rare, but are only worth a few bucks on ebay or worth nothing. You have to watch out for this.

      Another rule I have is to only pay the price you would pay if the item was broken, if you see items you want but unsure if they are going to work, never pay more than you would pay if the item was broken. You have to assume it is broken right from the start. This holds true especially with electronics.

    • GuyGuidoEyesSteveDaveâ„¢ says:
    • GuyGuidoEyesSteveDaveâ„¢ says:

      I should also advise that you learn the basic rates for a table at a flea market you are planning on going to. It’s sometimes very nice to mention while you are bartering that selling this one item will pay for the table they rented today, and even if they make no other sales, they broke even.

  13. BewareofZealots says:

    Do your homework and remember EBay.

    • GuyGuidoEyesSteveDaveâ„¢ says:

      FleaBay is a horrible way to price things. The prices things go for there aren’t usually applicable to the Real World.

      • Outrun1986 says:

        However if its your only avenue of selling things then you must consider it, in reality an item is only worth what people will pay for it. If there is a better way of selling things (other than craigslist and locally which there is no market here unless you either want to get robbed or sell things off for many dollars less than you can get on ebay) then I would appreciate knowing about it.

  14. megafly says:

    I learned from Pawn Stars that cash isn’t the only thing you can negotiate for. If you take $500 worth of product in trade, that only costs the store $250 so they’re more likely to give you the wiggle room.

  15. physics2010 says:

    I notice that more often than not, when Rick calls in an expert he tends to pay more for an item than he would of if he negotiated off the initial offer. A lot of times people just don’t know what they really have. On the other hand Rick doesn’t always know what they have either, whether its authentic or not, and we typically learn something from the expert. It makes Rick look better when he uses the expert because it makes it look like he isn’t trying to totally screw people. He’s willing to make a modest profit and be sure it real, than screw the people. Corey on the other hand, when seeing a coke product for example, will try to maximize profit and sometimes gets stuck with the fakes.

  16. WeirdJedi says:

    My mother has started watching these type of shows – American Pickers, Pawn Stars, and Antiques Roadshow. She is a collector and is interested in the value and history of the items that appear on the show. “See – we could sell something like that for thousands of dollars,” she always tells me. I just smile and say, “Then why don’t you?” She would literally hold onto something forever because it could be worth a lot of money. I want the opposite.

    If only we could find someone to come in and buy it for what its worth. Like any other ordinary person, I wouldn’t buy the item unless it was for street value – under $10.

  17. gman863 says:

    Based on the current state of the economy, two more:

    It’s only a bargain if you either need it or know you can sell it for a profit. You never cared about the pink spandex sweater at Macy’s when it was full price; would you be caught dead wearing it even at 75% off?

    Know your budget for an item and stick with it. If you have $600 for a TV, don’t get talked into a $1200 model just because its “12 months same as cash”. If you pay it off in a year you’ve still spent twice as much. If you f^ck up by making a late payment or letting it go past 12 months, the interest and late fees may turn it into a $2000 TV that also trashes your credit score.

    • One-Eyed Jack says:

      Good tips.

      Somewhere along the way I learned the word “spaving.” It applies in situations like when my sister blows $200 on the clearance racks at Gymboree: “But look how much I saved!”