In 2005, a Canadian blogger turned a single red paper clip into a two-story house. You may remember the viral story of Kyle MacDonald. When I first heard it, I couldn’t believe it was real. It was a legendary display of haggling and bartering.
Here in the U.S., you don’t see much bartering anymore. Unfortunately, I can’t go to Raising Cane’s and haggle my way to cheaper chicken.
However, there are still places like a car dealership or yard sale where haggling is still the norm. Haggling is also more common in other countries, so it’s a useful skill to know if you like to travel.
I will use a garage or yard sale as the scenario of our haggling. I think this is the most common situation where you will have to barter. The basics will be the same as at the used car lot.
So, let’s start from the beginning. If you are going to a garage sale, I suggest showing up a couple hours before it ends. At this point, the seller is more willing to sell at a lower price so they can get rid of everything.
When you go, dress down. Wear an old T-shirt and a hoodie. If you come dressed in nice clothes, then you look like someone who can afford to pay more.
Only carry around $20 in your wallet, and keep the rest of your cash back in the car. This serves two purposes: First, when you want to buy something that’s more than $20, a walk back to the car gives you plenty of time to make sure you really want to buy it.
Second, it’s a clever technique for getting a lower price. If you are trying to buy something for $10 but the seller won’t budge, just open your wallet and say, “$10 is all I have.”
Once you find something you want to buy, the haggling starts.
Come up with a maximum price you are willing to pay. This is your hard limit and you will not go over this price, but don’t tell anyone.
Now, find out what price the seller is asking. They will expect you to offer a low price, but if you make an offer that is less than half of their asking price, they won’t take you seriously.
You should offer them a price that is a 20 to 50 percent discount. You are aiming to get the final price between a 10 and 20 percent discount.
When they make their counter-offer, you should hesitate for a moment. If you can show that the price makes you less willing to buy, you have gained more bargaining power.
Keep repeating these steps until you are either satisfied with a price or the seller gives in.
You have just successfully haggled.
It may seem daunting to try to haggle with someone, so let’s talk about some mistakes to avoid and some tricks to give you the upper hand.
First off, if a seller doesn’t want to haggle, then don’t push it. A store clerk at a large national chain is not allowed to give you discounts, so they will not haggle with you.
Remember, haggling is a “game” for most people. It can be a fun challenge. The “game” makes up half of haggling, which is human psychology.
Here are some ways to psychologically get the upper hand.
Don’t be rude or condescending to a seller — they will not waste their time with you.
On the other hand, don’t appear too enthusiastic. If the seller knows you are excited about a product, then they know you will pay a higher price.
Make the seller feel like they have to make the sell right then. Appear in a rush, say you have to leave in 10 minutes and need to do more shopping. Act like you will leave if they’re wasting your time with high offers.
My best piece of advice is to not be too serious. Have a sense a humor and have a good time with the seller. Laughter goes a long way.
Don’t be too invested in haggling either. While it may be a “game,” it’s also the means to an end, and the seller is trying to make money. They don’t want to spend 10 minutes arguing over a $15 difference in price.
I want to leave you with some advice on how to actually start the conversation.
One of the best ways to start a conversation with a seller is to say, “I am a college student, can you negotiate on the price?” Hopefully, they will feel sympathetic to you and give you a good deal.
Try to be confident when starting the conversation. Act like you know what doing. If you don’t know what you are doing, fake it ‘til you make it.
Now go out and haggle your way to some great deals.
Jay Cranford is a 20-year-old finance junior from St. Simons Island, Georgia. You can reach him on Twitter @hjcranford.