Australians traditionally shy away from the art of negotiating when buying goods and services. But with the potential savings, plus the feel-good factor of bargaining your way to a better deal, it might be worth adding haggling to your list of shopping skills.
CHOICE Tip: COVID-19 is affecting stock levels on many products as well as increasing import and shipping fees, which means discounts simply may not be feasible for many retailers at this time.
Many small businesses are being hit hard so it may be worth asking yourself if you really need a discount or if you'd feel better supporting a business that needs your help by paying the asked price.
Tips to help you negotiate a better price
We asked Professor Harmen Oppewal, a professor of marketing at Monash University, and Dr Robin Canniford, a senior lecturer in marketing at the University of Melbourne, to share their suggestions for successful bargaining. Here are their top tips:
Do your research
Before you start bargaining, research the market and see what competitors are offering so you have an idea about what you want, what a reasonable price would be and any reasons that might persuade a seller to offer you a special deal.
Have a good opening line
Initiate bargaining by asking something like, "Is that your best price?"
During the bargaining process, take a polite, positive approach where possible, offering a sound rationale for the seller to meet you at a happy medium.
Be aware of your body language
Body language and your facial expressions play a big part in communicating. Look interested enough for the seller to feel hopeful of making a sale so that it's worth putting in the effort to haggle, but not so eager they'll feel confident you'll buy regardless of any concessions on their part. Smile and be friendly, but be prepared to walk away if necessary.
Look for opportune times to buy
The end of the day, or the month, or the financial year are times when a salesperson might have an eye on their sales targets and be keen to strike a last-minute deal to up their tally.
Think about the situation from the seller's perspective
What reasons might they have for wanting to offload the item you wish to buy? Perhaps that model is being discontinued, or has had bad press recently, or they're releasing a new version soon, making the older one harder to sell.
Draw attention to unique features
Especially features that might make it unappealing to other buyers, but aren't a deal-breaker for you, such as an unpopular colour or a less attractive style.
Ask for add-ons
What sort of extras would be relatively painless for the seller to offer instead of a discount? They might not be willing to budge on price, but might be willing to throw in free installation, delivery, carry cases or optional upgrades.
Boost your bargaining power with multiple items
If it's in your budget, bundling several items into your purchase boosts your bargaining power. "What about if I buy two of them?" can be a persuasive argument when bargaining, but bear in mind that a seller might seek to claw back profit on the pricing of the other items.
Mention a competitor's lower price
This is a strong bargaining move; a little research online beforehand will tell you whether the retailer you're talking to is offering you a good enough deal. But be aware that competing offers may not necessarily be the lowest actual price; there may be hidden costs such as delivery or other surcharges that mean the supposedly 'cheaper' price you've found is not in fact cheaper at all.
What is bargaining?
According to Canniford, the bargaining process is more than just a back-and-forth over price, but a negotiation over the whole package.
Buyers can ask for added features and customisations to the product, or services like installation and delivery. When talking about price, you could point out to the seller factors such as it being a good time to sell before the goods expire, or the colour of the item potentially being less appealing to other buyers.
Aggressive vs positive
Canniford says bargaining can be either aggressive or positive.
Aggressive tactics involve pointing out reasons you may have for going elsewhere if you're not offered a discount or a better deal. Being aggressive might help you reach a good deal now, but could backfire by getting your bargaining companion offside and destroying any ongoing relationship.
They might not be willing to budge on price, but might be willing to throw in free installation, delivery, carry cases or optional upgrades
Positive tactics on the other hand, help preserve a business relationship by focusing on reasons why you like the seller and would be an ideal buyer for this particular item.
"Saying, 'I can go down the road' [is] a more aggressive tactic, but there are also tactics whereby you can build relationships," Canniford says.
"'You know, I keep coming back here. Give me a deal. I want to keep working with you. I really like the fact that you're a small business and you employ local people.' There are positive and negative ways of building the relationship to get the sale."
Bargaining might be about getting a better deal, but do it right and it could be a fun experience as well.
"Be friendly, smile, know the market, be an expert, be prepared to walk away, take your time, build relationships and enjoy yourself," says Canniford. "It's about a process of agreement, at the end of the day. It's cordial."
Bargaining in Australia
The practice of negotiating a lower price for what you're buying, or getting some added benefits thrown in for free, has been less accepted here than in Europe, Britain and many Asian countries.
The Aussie market has traditionally been on the end of a long supply chain, with a smaller population and a correspondingly small selection of goods. With little competition among sellers, there are fewer opportunities to haggle successfully, as it's often not possible to walk away from a negotiation and buy the same product elsewhere.
However, COVID-19 restrictions and ongoing port strikes have made haggling even harder, as many products coming in from overseas are in short supply, so the retailer you're trying to buy from may be your only option.
Online research can give you an edge
The fact that all of us can now compare prices and other sales conditions on the spot by simply pulling out our smartphone in-store or researching their intended purchase online before they shop, means that we're all empowered to at least try to negotiate a better deal.
The online world has also provided a platform for unhappy shoppers to let others know about poor customer service experiences in the form of reviews and social media comments – even more reason for retailers to accommodate reasonable requests to negotiate on a deal.
But Professor Oppewal warns that this connectivity may also be exactly what stops a retailer striking a deal with you; if word gets out that one person got a good deal then every customer may expect the same thing.
When to haggle
Oppewal suggests that bigger ticket items such as white goods and cars offer the best chance to negotiate on price and customisable features, as do second-hand goods where the value of the item is up for debate.
You can also try negotiating on services such as insurance and mortgages when entering into a contract or renewing. There wouldn't usually be a sign in a shop inviting customers to haggle, so it's up to you to politely and confidently initiate the conversation about whether a special deal can be done.
How to haggle online
There's no reason that haggling can't be done online, particularly if a retailer has an easy-to-access customer service interface such as social media direct messages or a pop-up live 'help' box on their website.
Simply ask for a deal in the same way that you would in-store, and if successful the retailer should be able to offer you a discount code to complete your purchase.
"But buyers should be aware that trace of documents and discussions may make it more difficult to justify any price deviation by the seller," Professor Harmon says.
In other words it's much harder to fast talk your way into something when the person on the other computer has time to consider your written request and come up with ways to turn it down, rather than being caught on the spot, face-to-face.
When not to haggle
You wouldn't usually be able to haggle over the price of small, inexpensive items in supermarkets and similar stores unless the item is damaged.
"It would probably not be taken seriously if you start bargaining about a product in a supermarket or in a bookstore, because many of these prices are unbeaten," says Oppewal.
Ask yourself what's really important to you – saving a few dollars or paying full price to someone who really needs it?
Other items you should hold off bargaining over include things such as a $10 T-shirt at Kmart or Target or a meal in a restaurant or cafe.
And while a small, local business may agree to lower their prices to secure a much-needed sale, it's worth considering that many have been hit hard by COVID-19, the 2019–2020 bushfires and port strikes.
Before you try to grind a small business down, ask yourself what's really important to you – saving a few dollars or paying full price to someone who really needs it?
Bargaining in real life – case studies
So now you know the theory, does bargaining work in practice? According to these bargaining practitioners it certainly does.