'Is that the best you can do?'
A sluggish economy gives consumers more reason to haggle over prices.
Savvy shopper Lyndsay Heitmann knows exactly how to get the best deal from a typical street vendor. When she stumbles across something hot, the California resident plays it cool.
"First you show some interest, and then you put it back and start to walk away. Trust me, they'll come after you," explains Ms. Heitmann, who stopped in Washington's busy Georgetown commercial district recently to peruse a sidewalk stand filled with handbags.
"Usually I try to go at least $10 below what they're asking. But sometimes they laugh at me if I go too low and they say, 'Are you kidding, I'm not going to make any money off of this sale.' "
Haggling a few dollars off the price of an imitation designer purse can reward the novice with a small twinge of satisfaction.
But when it comes to big-ticket items with flexible pricing - like cars, antiques, and oriental rugs - a consumer armed with knowledge and a bit of skill can knock hundreds if not thousands of dollars off the original asking price. And an economic slowdown in the US has only helped make bargains easier to find.
The common perception is that Americans do not like to haggle and simply lack the moxie for it. But they do, in fact, know how to bargain in their own quiet manner, says Fernando Cruz-Conde, sales manager at the J&J Oriental Rug Gallery in one of Washington's Virginia suburbs.
"They say things like, 'Well, I don't want to spend a lot of money right now. I don't have the budget. Let me think about it,' " notes Mr. Cruz-Conde, an expert in interpreting such signals. "They're not as aggressive as foreigners, but they have their ways."
If a rug buyer fails to transmit such a message, he or she could end up paying a royal ransom. Many shops mark up rugs anywhere from 10 to 2,000 percent, Cruz-Conde says. Rug buyers should always bargain for at least 20 to 30 percent off, he stresses. "But if they really work hard, they could even get up to 50 percent most times."
Women generally have a more natural ability for this process, notes Joshua Nabatkhorian, co-owner of J&J Oriental Rug Gallery. "Men are not as patient," he says. "Women are more patient and love shopping, and are willing to go back and forth. Men are much easier to sell to."
Others concur. A sales associate at a large electronics chain in northern Virginia said women frequently ask him for discounts on items, while men pay the asking price, and "just want to get out of the store."
For men and women alike, there is little wiggle room when negotiating for a new automobile, despite perceptions to the contrary, says David Hyatt, spokesman for the National Automobile Dealers Association. The new car business has a very low profit margin of about 2 to 3 percent, he says.
Although some car dealerships, like Saturn, offer "no haggle" pricing, most still rely on time-honored negotiating methods. These days, however, buyers of both new and used cars are increasingly driving the bargain, primed with reams of information gleaned from the Internet, right down to the vehicle's invoice price.
"There is a tremendous advantage for the consumer to negotiate," Mr. Hyatt notes. "When you go in to buy a car, you don't know ahead of time how long the car has been on the lot, how much pressure the dealer feels to move the car."
"From the dealer's perspective, it's an advantage to have an informed consumer because it actually saves time in the sales process," he says. "Each party knows they've reached a good deal because it's based on solid information."
Information, of course, is the juice in any negotiation. And it is vital for buyers trying to secure the best price on goods that require a high degree of specialized knowledge, including cars, homes, art and antiques, says Emily Chamlee-Wright, a professor of economics at Beloit College in Wisconsin.
In fact, such specialized items are among the few things in our retail economy subject to negotiation and "price discrimination," she explains, noting this is not a pejorative term. Rather, "it suggests that if you know the market, you will get a better deal."
Otherwise, haggling seldom takes place at the retail level, Ms. Chamlee-Wright says. In most cases, this is to our advantage. "Bargaining takes time, and time is a resource we value highly," she notes. The practice, however, goes on full-bore at the wholesale level.
"We depend on agents to do the haggling on our behalf," says the professor, who specializes in sub-Saharan Africa market dynamics. Americans won't haggle over a bunch of carrots in the grocery store, she adds. "But we are going to patronize the grocery store that seeks out the best prices," which they will in turn pass on to the consumer.
Such competition keeps prices down. And as the economy continues its slump, prices in some stores are being slashed to haggle levels as managers try to unload back inventory.
While national retailers selling electronics and other big-ticket items generally won't engage in haggling, smart shoppers can sometimes get an additional 15 to 20 percent off by asking for the shelf model, if the item is no longer in stock, according to a sales manager at an office-supply store in Northern Virginia.
Many people also are hashing out deals in cyberspace, through online auctions and online brokers for flights, cruises, and hotels. Stories abound of people who might never have considered haggling for an everyday item in real life buying a $20 necktie for two bucks through an Internet auction, notes Chamlee-Wright.
On the human-to-human level, subtle haggling techniques, such as asking at a hotel: "Is that the best rate you can give me?" may sometimes result in unexpected discounts, says Patti Rivera, who works in a consumer affairs organization outside of Washington.
"It's not rude or aggressive," Ms. Rivera says, especially when done with an attitude that doesn't come across as if the person "owes me a discount."
Still, some may never warm up to the practice of haggling. Phyllis Ackerly of Washington worked for a long time as a real estate broker and a sales person. "I like to negotiate, but haggling goes against my grain somehow," she said after paying full price for a purse sold by a street-vendor in Georgetown.
Nevertheless, rug dealer Cruz-Conde advises that people should never be afraid to ask for a better price: "It's not an insult, it's just business."
Where to negotiate, and what to expect
You don't have to travel to a Moroccan bazaar to test your skills in the age-old art of haggling.
While negotiating over the price of a T-shirt at the Gap won't get you too far, there are certain family-owned businesses and goods in the United States where a simple "what's your best offer?" may lead to a sizable discount. Here are some typical goods sold by these retailers, and what experts in their respective businesses say you might expect to gain:
Used Cars: Dealers usually mark-up vehicles between $1,500 to $3,000. A dealer has to make a profit and cover the cost of reconditioning a vehicle for resale, so consumer experts suggest not to bargain below $500 over the trade-in value of the car. In fact, they say if you can split the difference between the retail and trade-in figures, you've done a good job. Still, if a car has sat on the lot for more than 90 days, dealers may take a loss just to move the vehicle.
Arts and Antiques: Negotiating will usually result in a 10 percent discount.
Oriental Rugs: A moderate haggling effort should result in a 20 to 30 percent discount. Persistence could pay off with a 50 percent price slash.
Used Books: While many used bookstores won't engage in haggling, one major shop in Washington will entertain negotiations for books valued over $100. A marred or ripped copy may also bring down the price. Look for a 10 to 20 percent discount.
Homes: Considering it's still generally a seller's market, the wiggle room for haggling is minimal. But if a home's sale price, for example, includes a $3,500 item for a fresh paint job, a handy buyer might bargain away the additional cost.
Flea Markets/Garage Sales: Haggling opportunities are ripe, but success varies widely depending on the vendor and demand for the item. Aim anywhere from a few dollars to 30 percent off.
Jewelry/Diamonds: As with rug shops, many jewelry stores will entertain haggling that can result in deep discounts. But at least one major mall-based jewelry chain store offers no such flexible pricing.
Pawn Shops: Most everything is negotiable, with discounts ranging from 10 to 15 percent. If something has been sitting around for a while, or is scuffed up, aim for a 25 percent discount.
(c) Copyright 2001. The Christian Science Monitor