Does their online world keep them from knowing how to get lower prices?
Can Millennials Learn to Haggle?
by Gary Foreman
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It's an online world. This is especially true for millennials. They communicate, play, transact business, and shop online. But in moving to an online existence have they lost the ability to haggle or hustle for lower prices? We wanted to help millennials learn the art of haggling.
To help us explore the topic, we turned to Bobby Hoyt (@genYmoneyman). He's the founder of MillennialMoneyMan.com and a former band director who paid off $40,000 in student loans in 1 1/2 years on a teacher's salary.
Q: How can you know what items are subject to haggling?
Bobby Hoyt: You have to recognize the difference between a worker and a salesperson. For example, if you walk in to Apple, you are dealing with workers that have no control over the price of the products in the store. Salespeople are often a little more outgoing and hungry for business because they want the commission. The items in a store with salespeople are usually subject to haggling. Small stores where the owner is the person on the other side of the counter are good bets for potential haggling as well.
Q: You've mentioned that most millennials are more used to shopping online than dealing with salespeople. Does this make it harder for them to haggle? Or could they be better off since they don't have to unlearn bad habits?
Bobby Hoyt: Millennials are growing up in a time where it is much more common to send an email or tweet than pick up the phone and speak with a human. The shopping process is the same; there is almost no human element left in the majority of our day to day financial decisions. This DOES put young people at a disadvantage, because the successful haggle is all about reading the person you are talking to. The only reason I've had any success with negotiating prices is because I forced myself to go out and put myself in the uncomfortable situation of asking for a lower price.
Q: Since the goal is to reduce the seller's profit margin, how important is it to know their price before you begin negotiating?
Bobby Hoyt: Knowing the price is essential, but it doesn't have to be complicated. I usually pull out my phone and find the item I want from the store online (if it's a big box store) right before I go in to talk to a salesperson. Internet prices are generally a little lower than in-store prices, and it gives you a good starting point for haggling the price down. If you want to get really fancy, pull up some of the competitors' prices and show it to the salesperson if the negotiation stalls out. The store wants your money, but they REALLY don't want the competition taking your money.
Q: Many people are embarrassed to have other people think they're cheap. Is there a way to get over that before you start shopping?
Bobby Hoyt: Absolutely. The salesperson doesn't go home with you, they don't pay your bills, and they don't look at your bank accounts. Honestly, there is a 99% chance that you will never see that person again (or recognize them if you do see them). Their opinion of you or your financial discipline literally doesn't matter at all. When it comes to being cheap, you also need to remember that most of the people you see with nice stuff don't have any money in the bank. I see being cheap as a badge of honor!
Q: Why is it so important to try to get the salesperson on your side? And how do you do it?
Bobby Hoyt: You want the salesperson to empathize with you, and you do it by treating them like a human being. When you walk in to the store you need to ask how they are doing and mean it. Try to strike up a conversation about something completely different than what you are actually there for and be genuinely interested. It will put them off-guard a little bit and might even make them uncomfortable. Remember that most people don't really try to talk to them about anything with substance throughout the day. If you want someone to budge on a price, taking them out of their comfort zone is a really effective way to make it happen.
Another great trick is asking the salesperson something like: "Can you do me a favor?" or "Can you help me out with this price?" When you put the salesperson in the position of helping you, they are more likely to lower the price. Humans love to "help" people because it makes them feel good afterwards. Emotions are a big part of haggling.
Q: How do you know when you're really getting a good deal and it's time to say 'yes' to their offer?
Bobby Hoyt: At some point, all the negotiating and tricks that you know will stop working. The salesperson WILL hold firm on their lowest number when you reach it. That is when you have to make the decision to either accept their price or walk away for good and try elsewhere.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
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