Tag: DIY

Why is negotiation so scary?

I think that there are a few reasons why it can seem so scary.

  1. As a buyer or seller, we just don’t want to be cheated.
  2. We’ve all encountered slimy sales people.
  3. Late night infomercials about learning the tips and tricks to sales
  4. Insecurity.

If you follow my SnapChat daily then you’ve seen that i’m selling.  Generally it is cash in hand from local deals.  What you don’t get to see yet is the actual interaction between the buyer and myself.  I haven’t started posting the conversations we have though text that happen before the meet up.  There hasn’t been much emphasis on the how but rather just the finish.

So you’ve posted up something for sell.  Priced it well, or so you thought.  You’ve done a little research as to what similar items are listed for in your market and priced yours accordingly.

You meet with a buyer.  It’s a guy that has texted you back and forth about the item.  He pulls up in his truck.  Introductions. Then you show the item.  He pops off a number.

Now it is your turn.

Don’t get scared.  Don’t isolate yourself in your head, and don’t worry.

It’s time for the negotiation.  Remember, you know this guy wants what you’re selling.  He showed up, didn’t he?

Negotiation is process where the seller and buyer work to agree to a value that is agreeable to both parties.

Let the his offer soak in.  You’d be surprised how many people add to their first offer if you just contemplate for a few seconds.  He may want this item a lot more than you think his offer initially seemed.

Remember a successful negotiation is when both buyer and seller felt the amount of money transferred for an item was beneficial to both parties.  Meaning, everyone felt like they got a deal.

Reinforce the reasons why your item is priced accordingly.  Hold steady on your number.  Your buyer will throw another offer.  Now go back and forth until there is an agreeable figure.  Shake hands, trade cash for your item and thank your buyer.

Congratulations, you just did your first negotiation.

That wasn’t that scary was it?  Did you get scammed?  Not if you felt good about the deal.  The right thing to do at this point is to move to the next sale, or purchase.  Remembering how this deal went down.  The thing you don’t want to do is to go home and now look at all the finalized sales of the same item you just sold.  This can weaken the comfort level you had about the deal you just made.

Decision 3 in the “The 7 Decisions, understanding the keys to personal success” says

“I Am a Person of Action.”

Successful people make their decisions quickly and change their mind slowly. Failures make their decisions slowly and change their mind quickly. My decisions come quickly, and they lead to victory.

Quote by Andy Andrews

 

Perceived Value

“Perceived value is the worth that a product or service has in the mind of the consumer. For the most part, consumers are unaware of the true cost of production for the products they buy; instead, they simply have an internal feeling for how much certain products are worth to them.” Quote by Investopedia

We recently sold a lawn mower.  I posted it up on Craigslist for a price that I thought was a good deal.  Took a few quick photos.  Listed it and waited for the phone calls and text.

Problem was, I hardly got any response.

My mistake was in the presentation.  It was simple and to the point.  There was no sales pitch in the listing.

Since I showed such little effort in the presentation, I believe the perceived value was lower.  I pulled the listing from the internet.  Detail washed the mower, took professional looking photographs and laid out all of the accessories that were included in the sale.

Now what I did next surprises people.

I raised the price.  By hundreds of dollars.

Next thing I know, countless calls and texts.  I had now created an environment that gave the item more perceived value.  While cleaning this mower I started to remember how good it really was.  How productive I was on it.  How remarkably different it was to anything that our local market was become accustomed to.  Once I felt the value go up to me, I was able to convey that through my newest listing ads.

A guy drove an hour an half to come pick it up.  He just had to have it.  Paid my new higher price with no questions asked.  No negotiations on cost.

I would bet the new owner takes better care of this machine than if a buyer would have bought from my lousy ad that I started with.

Plus I made more money.