When haggling pays off
By Elif Armbruster • Bankrate.com

Pick your battles wisely
Does the thought of approaching a salesman and dickering over a price tag send chills down your back? Probably. But trust us, the art of the deal doesn't have to be scary or humiliating. It can actually be fun. Mostly what it takes is some gumption -- and a little bit of art.

To become a negotiating pro, follow the tips below, and, when in doubt, just remember that the worst that can happen is you get "No!" for an answer.

Rule No. 1: Don't sweat the small stuff.
The first and most basic rule is to know when negotiating is worth the effort and when it is not.

In general, stick to haggling over items that are important to you -- a salary raise, a costly ongoing doctor's bill, or your first full-fledged stereo system. These merit the time it takes to dicker, both from your end and the higher-ups.

"No one wants to get into a big discussion over a few pennies," says Stephen Pollan, a New York City attorney and co-author of The Total Negotiator. "So pick your battles wisely."

Rule No. 2: Know your price.
Determine what price you want before you get involved in negotiating -- and stick to it.

"The more resolve you demonstrate, the more likely you are to be taken seriously," says Herb Cohen, author of You Can Negotiate Anything.

To stay within reasonable bounds, it helps to know what markups exist in particular markets -- this tells you how low your opponent can go and still walk away with a decent profit. As a guideline: small appliances such as microwave ovens are usually marked up about 30 percent, while larger ones are only marked up 15 percent. Cars are marked up about 5 to 10 percent, while clothing can carry as much as a 100 percent mark up. If you don't know the markup, advises Cohen, aim for 10 to 15 percent off the price tag. If that fails, try to get delivery charges waived.

Rule No. 3: Keep it cool.
No matter how badly you want something, keep a negotiating session civilized. Sorry folks, but no yelling, spitting or hair-pulling allowed. A warm smile and gentle voice will get you a lot further than you think.

"Be someone with whom you would want to negotiate," says Marjorie Corman Aaron, executive director of the Center for Practice in Negotiation and Problem Solving at University of Cincinnati College of Law in Ohio. "And remember the impact of empathy. Express an understanding of the other side's needs."

A little flattery can help, too. Stephen Pollan suggests saying something like, "I love this store and I've been coming here for years. But I need your help because I can't afford that price."

Rule No. 4: Know the competition.
If the item you've got your eye on is sold next door for less, you can use that information to haggle for a price break. Tell the salesman you'd rather give him your business, but to do so, you need a favor -- say, a 10 percent reduction in cost. Chances are, you'll get it.

Also try to get a sense of how good (or bad) business has been lately.

"That gives you a sense of how hungry a store is for your business," says Aaron. "If someone really needs a sale, they are more apt to make a deal."

Rule No. 5: See the big cheese.
If a salesperson has said no to you, and you are still in the haggling mode, ask to see the boss, or, in a small shop, the owner. These are the folks who really have the power to bargain. And owners, in general, know the importance of a sale, even if it means taking a small cut on a price. They have the success of the business riding on their shoulders.

Rule No. 6: Know when to walk away.
If you've tried everything and haven't gotten anywhere, take a hike. When a salesman sees that you are serious about the price you want, he may change his mind and make the sale anyway -- some business, after all, is better than no business.

"You keep the power when you walk away," says Pollan. You can always come back and try again, or, better yet, take your finely honed haggling skills elsewhere.

-- Updated: June 8, 2004