Master the Art and Science of Haggling for More Productive Business Negotiations

By — on / Business Negotiations

Adapted from “Master the Art and Science of Haggling,” first published in Negotiation Briefings August 2009.

Imagine you’re celebrating a special occasion with friends at an upscale restaurant.

Soon after you take your seats, the wine director introduces himself and hands you a list of high-end bottles of wine.

You notice that the prices—all in the $200 to$600 range—have been slashed through with a red pen.

“The prices on our reserve list are negotiable tonight,” the wine director says. “Would you care to make an offer on a bottle?”

This sales ploy might sound like the daydream of an oenophile.

But believe it or not, a fine-dining restaurant in New York City, David Burke Townhouse, practiced this strategy in May 2009.

Chef and restaurateur David Burke had taken unusual steps to navigate the economic downturn, including printing the word sale on menus and holding this “wine auction” promotion, writes Katy McLaughlin in the New York Times.

Did the gimmick work?

The restaurant’s wine director reported negotiating the sale of about five bottles of wine per night at prices that met or improved on his reservation price—the minimum he would accept to reach a deal.

While most upscale Manhattan restaurants were experiencing sales declines of about 15% in 2009 as compared with 2008, Burke told the Times that Townhouse was down only about 8% during the recession, perhaps due in part this flexible pricing strategies.

The story illustrates a larger trend: Businesses that never would have considered negotiating with customers last year are now willing, even eager, to make deal.

Just like the prices of houses, cars, and other big-ticket items, the prices of furniture, electronics, wine, jewelry, another “medium-ticket” goods are now frequently up for discussion. The ancient art of haggling—the back-and-forth dance of offers and concessions between buyer and seller—is making a comeback, and you would do well to brush up on your skills.

Do I have to haggle?

In some cultures, a long tradition of haggling in markets and bazaars flows naturally into brick-and-mortar stores.

By contrast, in the United States and many other countries, haggling between buyers and sellers is an under-practiced art, typically employed only in negotiations for cars and real estate.

As a consequence, many Westerners have an aversion to haggling, especially in contexts where negotiation is not the norm. You might routinely pass up opportunities to haggle because you’re afraid of offending the seller or because you feel inexperienced or uncomfortable.

But you’re probably passing up chances to save money.

A May 2009 Consumer Reports poll found that 66% of Americans had tried to negotiate discounts in the previous six months.

Of these hagglers, 83% succeeded in getting lower hotel rates, 81% got better deals on clothing and cell phone service, 71% negotiated cheaper electronics and furniture, and 62% lowered their credit-card fees.

If the potential financial benefits aren’t enticing enough, look at haggling as a chance to improve your negotiation skills in a relatively low-risk context. The price cut you negotiate at a chain store for a washing machine could make you feel more confident in your next heavy-hitting workplace negotiation.

(And you can haggle on your company’s behalf, of course, whether for lower rent, travel expenses, or office supplies.)

In addition, many sellers are hurting these days.

When faced with a choice between haggling with you or losing you as a customer, many will gladly accept the challenge. Similarly, lenders and landlords may be willing to renegotiate existing contracts to keep good customers or tenants who are struggling financially due to layoffs and pay cuts.

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