Every ten years or so I am compelled to stroll on to the dangerous grounds of car dealerships. I’d rather never put my feet on that pavement because I know I will encounter people who try to separate me from the contents of my wallet. Then, I have all that trouble convincing them that my money is just that, MINE. IF they are going to get some of it, they’re going to have to work for it, just as I did.
Now, when your favorite Cash Flow Wizard strolls on to that pavement, I’m quite sure my demeanor sets the salespeople at ease. They’re thinking: middle-aged woman, arrives alone, very nice and friendly. Easy sale. We’ll appeal to her concern for safety; we’ll tell her she looks HOT in that car; we’ll get her a car in whatever pretty color she wants; we’ll make financing easy for her. Apply a little pressure. Presto! We have a sale.
That’s when the fun begins. For me, anyway. Don’t let my mild-mannered ways fool you. I’m a tough-minded negotiator. Before I ever set foot on the dealer’s pavement, I have already done my research. I know exactly what I want. I know exactly what I’m willing to finance. I know exactly what I’m willing to make as a downpayment. I don’t care what color the vehicle is as long as it’s not black or gray. I’m not swayed by emotion. I’m all business. The rest is up to the sales people. How much do they want my money?
The goal of a salesperson is to get the sale at the highest possible price the customer will allow. My goal is to get the purchase at the lowest possible price the seller will allow. If the item is scarce, the price is higher. If the item is plentiful and competition exists, the price is lower. In case you didn’t notice — it’s a buyer’s market. Lots of inventory, lots of competition. That’s fantastic for business owners in the market to buy, but not good for selling products and services.
Because of a tough selling market we have to really understand what our customers value and what our competitors are doing. If I, the customer, am standing on a car lot looking at a vehicle and I know I can drive an hour to stand on another lot where they have an identical vehicle, I, the customer, will be very aware that the seller should work hard to get my business. The old “I have another customer who is interested” kind of tactics no longer are effective.
The rough sales climate is good news for business owners who are purchasing goods or services. Because margins are tight on the sales side, we have to spend carefully and get the lowest prices possible on the purchasing side. In a buyer’s market, this is easier to do.
Here are some tips for negotiating a good deal:
- Do your research. Who sells what you want? Are there ten suppliers or one? What are your must-haves and your nice-to-haves? The more you know the more power you have.
- Set rock solid will-not parameters. For example, with my car purchase, I have a will-not-finance-more-than-$ parameter.
- Determine what constitutes a good deal or good price for your situation. If you’re buying materials for a job, what impact will spending 1% more on materials have on your profit picture?
- Hold firm to what you want.
- Walk away if you don’t get what you want.
- Wait. The salespeople will come to you with a counteroffer or meet your price.
My other favorite tactic when dealing with car salespeople is to turn their tactics around on them. I say, “Here’s where you are, here’s where I am. Are you going to let $x stand in the way of selling me a car and getting your commission?” If you’re going to spend money, spend it well. It’s the Cash Flow Wizard way.
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