Tuesday, June 9th, 2009
Retail prices are a lot more negotiable than you might think. But before you go out and try to play hardball to get a discount, learn the rules of the game.
This is a very long read but well worth it By Katherine Reynolds Lewis at MSN
You see an item you want in your local big-box store. The price seems too high. You ask for a discount — and you get it!
This scenario may seem far-fetched, but expert negotiators say it occurs every day in retail outlets across the U.S. With consumers restricting their spending, store owners need every sale they can close, even if it means accepting a smaller profit.
“Retailers, particularly a number of the high-end retailers, are in real trouble given the current recession, and they’re willing to bargain,” said Joel C. Huber, a marketing professor at Duke University’s Fuqua School of Business.
That’s not to say it’s easy to win unadvertised discounts. The art of the haggle is an intricate dance, and you must know the steps before you venture onto the dance floor.
And you have to be willing to ask.
“The thing people don’t understand about the retail industry, especially brick-and-mortar stores, is that prices aren’t fixed,” said Albert Ko, a co-founder of bargain-hunting site CheapCheapCheap.com. “With the economy, it’s all about the numbers and getting goods sold. . . . They’re willing to listen and work with you.”
Really, you have to ask
Americans are notoriously uncomfortable negotiating bargains, said Julie Parrish, the chief executive of Hot Coupon World.
“My dad’s from the Middle East, and they haggle for everything. You grow up knowing how to ask,” Parrish said. “People are scared. They view it as a confrontation, and it’s not. You’re simply asking. There is so much leverage in pricing other than the price of a gallon of gas.”
You may think you can’t negotiate with a mainstream retailer with fixed prices. But even discounters such as Kmart give their stores the leeway to cut a deal if you give them a good reason. That can be as simple as pointing out a scratch or flaw, or bringing in a flier advertising a lower price at a competitor.
Lila Delilah, the founder of Madison Avenue Spy, has found that boutiques offer discounts upon a hint. She was looking at a children’s coat that was 30% off and remarked that she saw it for 50% off the previous season. The owner immediately offered an additional break.
“I have a friend that’s been walking into every boutique she goes into and asking for the ‘recession price.’ Amazingly, she’s getting 25% to 30% off just by asking for it,” Delilah said.
When should you ask?
When you’re buying a lot. At Costco, Parrish saw a man taking dozens of packages of baby back ribs out of the display to put in his cart. The manager stopped him and asked how many he wanted. The man ended up buying six cases of ribs at a 10% discount.
Indeed, volume discounts are a key way to save in this economy. If a department manager can move a lot of inventory, he’ll be flexible on price.
“They’re happy to do it because they get bonuses tied to volume by department,” Parrish said.
When the product is on its way out. Stores also like to get rid of all units of a clearance item so the display can be used for another product. Using this knowledge at Walgreen’s, Parrish’s business partner got about 50 Burt’s Bees lip gloss tubes for 50 cents each, down from the clearance price of $1.59 and regular price of $3.99.
Consider the meat department of your local grocery store just before closing time. The manager might prefer to sell the entire display of ground beef and go home, rather than spend 45 minutes wrapping and storing the meat. If you can freeze the beef, either as patties or cooked taco meat, you can end up saving more than $1 per pound.
When you’re dropping a small fortune. At high-end department stores, if you spend more than $15,000 or $20,000 in a single visit, you can usually get 20% off the entire purchase, Delilah said.
“Stores that sell Christian Louboutin shoes, you can say, ‘These are very expensive. Is there any way you could give me something off?’” Delilah said. “In this economy, everybody’s looking to crack a deal. If you’re ’spending bank,’ there’s going to be more flexibility.”
When you pay cash. Because merchants can’t legally charge extra for credit card payments, the cost of the associated fees is built into every transaction. But they can offer a discount for cash. Ask.
First, do your homework
The seller is unlikely to accept a deal that leaves no profit. So before you enter the store, check out comparable items online or in the store’s competitors. That will give you the range of prices.
Make sure you understand which items have a larger profit margin and which have a shorter shelf life, such as perishables, seasonal clothes and consumer electronics that become outdated. You’ll have better luck negotiating if the manager wants to clear the inventory out of the store, said Jim Crawford, the executive director of the Global Retail Executive Council.
At a Best Buy recently, Ko’s father wanted to buy a 42-inch LCD television. When they first spoke to the manager, he said he couldn’t give a discount. Ko then said he had seen the TV for less on the Internet but wanted to buy it in person and suggested a package deal.
They ended up getting $200 off the television, bringing it under the Internet price, by purchasing a warranty and accessories, both big-margin items.
Jewelry has one of the highest markups of any product category, said Kit Yarrow, a psychology and marketing professor at Golden Gate University.
“Even at mall jewelry stores you can negotiate,” Yarrow said. “I don’t think I’ve ever in my life purchased jewelry without getting a discount.”
Stick to your guns, but be flexible when you can
Before you get carried away with the power of haggling, an important note: You must keep your key criteria in mind when you’re negotiating and be willing to walk away if they’re not met.
The most important parameter is your top price. If you are bargaining and it becomes clear the seller can’t do better than your top price, thank him for his time and leave.
Also, be willing to give on features or criteria that don’t really matter to you.
For instance, Parrish wanted a new minivan that had sliding doors but didn’t care about the color or model. She walked into the dealer saying, “These are the must-have features, and this is the price I want to pay.”
Even if a retailer won’t cut the price, it might throw in some extras for free. If you’re making a major purchase, ask for complimentary delivery or installation. For clothes, suggest free alterations or cleaning and pressing.
Parrish recently walked into a Lowe’s store looking for a front-loading washer-dryer set. She didn’t care about the brand and noticed a Maytag floor model with a scratch on the dryer and only one display pedestal, for the washer. She asked to speak to the manager and negotiated a discount based on the scratch and it being a display model. Then she asked what they were going to do with the pedestal.
“Is somebody going to buy that sitting by itself?” she asked, mentioning that she’s a mom with three kids and couldn’t bring the set home in her vehicle. The manager threw in the pedestal and delivery as well. The entire transaction could’ve cost $2,100 but ended up being $1,100.
Haggling rules to live by
Make it personal. Try walking into a store with the best attitude possible. Be friendly, respectful and interested in developing a relationship with the sales staff. (See “Know thy enemy: Understanding the salesperson’s tactics.”)
“Introduce yourself with your name and a handshake so you take away the anonymity,” Parrish said. “Now I’m working with Bob the sales guy, and he’s working with Julie customer. You make it personal.”
Talk to the manager. As sugary sweet as you can be to the frontline sales clerk, you’ll never get a worthwhile discount. He simply doesn’t have the authority to offer one.
You have to speak with the manager, the person who has the power to negotiate. But when you ask, be nice, and offer to help that clerk who’s now your first-name buddy.
“You say, ‘John, I’m looking at this television,’ and I have a question about the pricing,” Ko said. After a friendly conversation, say: “You’ve been very good to me. I’d like to help you. Where’s your manager? Let me throw in a good word for you.”
Keep your word. Your career as a negotiator will be short-lived unless you follow the haggling protocols. If you tell a frontline clerk you’re going to put a good word in with her manager, do so.
“Always follow through; don’t say it and not do it. Execute on it and respectfully do what you say,” Ko said.
Don’t make them regret it. The last thing the retailer wants is to have 50 of your friends walk in and ask for the same deal. Stores don’t want it known that they will cut special deals. Few were even willing to talk for this story.
In an e-mail, Lowe’s spokeswoman Abby Buford said, “Managers do have the discretion to adjust prices if necessary to be competitive in the market.”
Costco generally offers volume discounts only when customers buy a product by the truckload, Chief Financial Officer Richard Galanti said in an interview.
“We sell at incredibly low prices every day,” Galanti said. “When someone wants a discount beyond that, it’s going to be at the discretion of the department manager. We don’t encourage or discourage it.”
8 phrases that win discounts
* Use “if . . . then” statements. For instance: “If I buy two of these Tiffany necklaces, then can you give me 25% off?” Or: “If I buy the entire rack of ground beef, then what’s the best price you can give me?”
* Begin by saying what you do like about the store, service or product. It establishes you as a loyal customer and a decent human being.
* To begin negotiations, say, “I’d like to pay X” or “My budget is Y.”
* Give them a reason to say yes, whether it’s a scratch on an appliance or a model from last year.
* When the seller turns down your offer, ask, “Is there a price you’d accept?”
* “I want to stay a loyal customer. But I’ll tell you the truth — it is tough to pay the bills.”
* “I’m not happy with the price I’m paying for this service.”
* “What’s the ‘recession price’ for this coat?”
Posted in Informational, Inspirational, purchases | 3 Comments »
Monday, May 18th, 2009
Found this gem by Rachel Zupek on cnn.com
With an abundance of job losses, salary cuts, eliminated bonuses and diminished 401(K) matching contributions, your income is shrinking — but the bills aren’t.
If your regular job isn’t earning you enough cash or you’ve lost your job altogether, these simple side gigs can help put some padding in your pockets until — maybe even after — you get back on your feet.
Here are 10 ways real people are creatively taking home some extra dough:
1. Do freelance work
Felice Premeau Devine left her lucrative, full-time job two years ago to raise her son. In the interim, she’s picked up writing and editing freelance work and started a blog, where she is able to earn a little cash from advertising.
Nowadays, almost any job can be done on a contract or freelance basis. Check out sites like Sologig, which lead job seekers to contract, consulting, freelance, temp-to-hire and part-time project opportunities in your field.
2. Sell your books
If you’re a college student or you hung on to your college textbooks thinking you might want to read them again somewhere down the line, select retailers like Barnes & Noble allow you to sell your textbooks for some quick cash. Or, take some classics from your personal library and sell them at a local second-hand bookstore.
3. Search circulating coinage
Susan Headley, the “guide to coins” on About.com, is a lifetime coin collector who has been boosting her income by searching through circulating coinage for the past six years. In 2008, she made about $2,500 and so far in 2009, she has earned approximately $500 from coins she’s found.
People who search circulating coinage successfully for a side income do so in very large numbers, she says. They buy rolls of coins from banks, typically in whole boxes, and sort through it to find stuff that just doesn’t belong, Headley says. Half dollars, for example, were no longer made from 90 percent silver after 1965, but they still had 40 percent silver in them until 1970; either of these turn a nice profit. Presidential dollar errors can be worth $50 to $5,000 each; uncirculated state quarters can sell from $10 to $50 per roll; and rare error coins can value up to $35,000.
4. Start a “business”
Turn your hobby, skills or expertise into a part-time business. Sites like Jobvana can help you do so by providing you with free tools to market your services and offer specialized skills to those looking for help.
Peter Olson says he built a profile in September 2008 offering to teach guitar lessons. He has since gained two students, earning about $240 extra dollars per month and grossing around $1,000 since he started teaching.
5. Enter local and online sweepstakes
Wendy Limauge has been entering sweepstakes since 1993 and teaching others to win through her Web site, Sweeties Sweeps, since 2002. Though winning sweepstakes rarely provides actual cash, her winnings have consistently provided her and her family with 200 to 300 prizes a year, many of them large items she and her husband couldn’t afford on their incomes alone.
Prizes she has won include three TVs, two of which are flat-screens; a home theatre system; three dishwashers, each won on separate occasions; at least $1,500 in grocery gift certificates; an $18,000 voucher for the vehicle of her choice; a trip to France valued at $25,000; and, in March 2009, she won $5,000 in an instant-win game.
“The Internet has so many options for saving money, getting something for free, winning a prize or earning money from home,” Limauge says. “You just need to find those resources that offer helpful information and point you in the right direction to get you started and keep you motivated.”
6. Give your opinion — and get paid
Linda Childers, a California-based freelance writer, says many of her friends participate in focus groups. Contributing an hour of your time can earn you up to $100, sometimes more. Online surveys, phone surveys and product trials can also earn you anywhere from $5 to $150. Check out Free Paid Surveys or FindFocusGroups.
7. Sell your junk
Terri Jay earns $2,000 - $3,000 per month just by selling junk. On eBay, Jay not only sells stuff she isn’t using; she hits up local thrift stores on 99-cent days, garage sales and tack sales, looking for things of which she knows the value. She says her best sale was for a drink tray from the 70s: She paid 25 cents for it and it sold for $87.
“The trick is to [sell] what you know,” she advises. “Therefore you can list them [at correct prices] so they will get picked up in searches [on eBay].”
8. Join a direct selling company
Direct selling is one of the easiest ways to earn some extra cash, especially if you sell products you love. Avon, for example, allows you start your own business for $10 — your take home depends on your efforts. Some full-time representatives earn six-figure salaries, others own licensed Avon Beauty Centers and many just sell Avon part time around their families schedules.
Haizel MacIntyre started her Avon business in June of 2008 to earn supplemental income to her full-time job when her husband was laid off. Since joining Avon, MacIntyre averages $1,800 a month in sales and her husband is helping her run the business. Her Avon earnings help pay the bills, provide extras for her three kids and she is hoping to earn enough to put towards her college tuition when she goes back to school to get her Masters in Social Work.
9. Be a secret shopper
Keen eyes for detail as well as a good memory are really all that it takes to succeed as a secret shopper, says Zippy Sandler, who has been mystery shopping for about 13 years. After registering with a secret shopping company, you are paid to basically go undercover and report on a company’s operation from the customer point of view.
Sandler decided to start secret shopping not only to earn money eating, traveling and shopping, but also to learn customer service skills to pass along to the employees she managed at a retail store. Depending on the clients she is shopping for, Sandler says she has earned everywhere from $100 to $2,000 per month.
10. Sell your photos to stock agencies
It doesn’t matter if you’re a hobbyist, an amateur or a seasoned photographer - anyone can submit their photos to stock photo agencies like Shutterstock.com. If your images are accepted, they will be available for download by subscribers. Each time someone downloads your photos, you get 25 cents.
Posted in Generate income, Informational, Inspirational | No Comments »
Tuesday, March 3rd, 2009
In light of our strained economy, how can you keep your love life intact and still scale back on spending?
Remember that money isn’t everything. The most important thing is that you’re together.
Whether playing the field or in a couple, there are a number of free (or cheap) ways to mind your wallet without sacrificing your dating life. After all, a recession won’t keep you from finding love, it’ll just make you more creative!
For those playing the field
1. Dinner and a movie DIY-style: Instead of going to a restaurant and theater, grab a Netflix and cook your date dinner.
2. Have a picnic: Grab a picnic basket with some home-made goodies, a comfy blanket and spend a romantic day in the park.
3. Free wine-tasting: Most wine shops feature free promotional wine-tasting events, a perfect (and educational) date!
4. Your own personal sunset: Take a stroll and let the sunset be the destination for your date — pretty and, more importantly, free!
5. Get sporty!: How about getting a little down and dirty with your date? No, not that way — participate in a local or city-wide recreational sporting event: how about a game of ultimate Frisbee or touch football?
6. Free culture: Most art galleries and/or museums that normally charge entry fees, usually have at least one “free night” a week — take advantage!
For couples
1. Lather up!: Light a few candles, maybe turn on your favorite music and take a romantic bubble bath together.
2. Eat in, but make it fun: Instead of spending cash on eating out, cook at home together — try new recipes and new foods — for cheap!
3. See the sites: No matter what city, most residents rarely do the typical “tourist activities.” Why not take the opportunity to do some local site-seeing —- most tourist attractions are relatively cheap and monuments or scenic sites are usually free (and only cost a guidebook!)
4. Volunteer together: Nothing’s sexier than doing good.
5. Take in some flea market finds: Peruse local flea markets/garage sales with your significant other — if you do buy something you know it will be cheap and even if you don’t, flea markets are always a fun excursion.
6. Start a photo blog: Why not create something with your partner? Spend some time out and about taking photos. You can even start a photo blog that your friends and family can follow and you can update together. It’s free and you’ll always have something cool to look back on!
And remember that money isn’t everything. The most important thing is that you’re together and you’re having a good time. If your date doesn’t appreciate spending time with you without spending a lot of cash, then you probably shouldn’t be with her/him.
Regardless of your funds, each of these ideas can be an exciting change of pace. You may be feeling financial strain — but you don’t have to feel it alone!
Posted in Informational, purchases | No Comments »
Wednesday, July 23rd, 2008
I sometimes get lost in my quest to become debt free and liberate my family from the debt monsters of the world while trying to change my family’s legacy. With that in mind, I’ve never thought about “How much money is enough”, until I checked my email today and saw the article topic staring right back at me.
Needless to say, I clicked the link and within the article there’s a 4 step process to figure out how much is enough. For me, I’m thinking I have a more simple formula.
Short Answer: Being debt free is enough money for me because without debt our lives tend to change. No longer are we FORCED to go to work on dreaded Monday’s. No longer are we bound by legal contracts to credit card, mortgage, and loan companies. Instead we can focus our attention on PAYING OURSELVES (which we should do anyways).
In the previous blog entry I wrote of a goal of mine. To be at a point to where I don’t have to work if I don’t want to. If we pay off our home and her student loan payment, I’ll quickly be at that point. The beauty of it is… after those are paid off, it’s smooth sailing. Income will be just that… INCOME!
But for the lazy (which I tend to be) here’s the 4 steps from the article:
Link
Step 1: List your top five goals or desires.
In contrast with the hundreds or even thousands of cravings and urges you feel each day, your deepest desires may include benefits to others and not solely to yourself, may be characterized by patience rather than a childlike urgency and may carry a sense of profound importance: “I yearn to do or have this before I die in order to feel truly fulfilled.” You may wish to begin by listing all the desires you can in 60 seconds and then select the five which most fit this definition.
Step 2: Put a price tag on each goal.
If your deepest desires include things like buying a home, you (or your financial planner) can fairly easily convert that goal into a monthly or lump-sum financial requirement. But if your goals include states of being — such as a desire to work half time and spend more time with your kids or volunteering for a cherished cause — you’ll need a replacement income source.
For these types of desires, list the amount of annual income you’d need to replace. Our rule of thumb is that you’ll generally need an investment portfolio equal to about 20 times your annual withdrawals. So if you’re hoping to have your investments cover $25,000 a year of expenditures, for instance, you’ll need to have or save $500,000 to cover it.
Step 3: Calculate your “enough for life” number.
By adding up the total of all the lump sums needed, you can calculate how much is enough for you to achieve your deepest desires.
Step 4: Create a financial plan to get there.
If your financial net worth exceeds your “enough for life” number, great news: You can stop worrying and live the life you most want to live. I don’t mean to be glib, but if you know you have enough to take care of your deepest desires, as well as your basic necessities and retirement savings, it may be time to stop chasing each extra dollar. Instead, solidify your sense of abundance by sharing your good fortune with others, through philanthropy (or just plain old-fashioned generosity).
Posted in Generate income, Informational, Inspirational, Personal debt, education, goals | No Comments »
Sunday, June 29th, 2008
Real-estate agents have been pushing the virtues of homeownership since homes were invented. Or since real-estate agents were invented, anyway. Paying a mortgage, they insist, is a can’t-miss investment (the tax breaks, the appreciation, the thrill of fixing your own roof!). Renting is for simpletons who don’t like keeping their own money.
But does owning a home really trump renting? With the economy stumbling, house prices falling, and credit tightening, many housing experts are questioning the conventional wisdom. “Over the last decade, it may have been true,” says W. Van Harlow, an economist at the Fidelity Research Institute. “Clearly, there are periods where [the housing market] will dominate. But give this market correction another 18 months, and it may not be true anymore.”
Not so hot. The housing boom produced endless stories of homeowners getting twice what they paid for their homes. But “prices don’t always go up,” says Jay Butler, director of realty studies at Arizona State University. Even a boomtown like Phoenix has seen median rates of appreciation climb only 4.6 percent a year since 1981. According to a Fidelity study published this year, the return on a dollar invested in real estate in 1963 barely beat that of a low-risk treasury bill.
When the housing market slumps—as it has every 10 or 15 years for the past several decades—homeownership becomes little more than renting, from a bank. Without appreciation, buying a $400,000 house—instead of renting the same property for, say, $2,000 a month—can turn into an expensive, potentially money-losing proposition. Assuming home prices come out of their death spiral (prices fell 4.5 percent in the third quarter compared with last year), they would still have to appreciate at 4 percent every year for a decade—even if rents climbed well above the rate of inflation—before a family would save more owning than renting. An $80,000 down payment could be invested instead in a mutual fund earning 8 percent, and housing comes with myriad other expenses, from maintenance to insurance to taxes, none of which build equity. Tax breaks do ease the pain. But with the average family staying in a house only six years, homeownership during a slump (especially in foreclosure pits like Las Vegas and Tampa, where prices have dropped more than 9 percent since last year) can look less and less like the American dream.
Renting, meanwhile, has its virtues. It’s cheaper in the short term, it offers maximum flexibility, and it pushes the headaches of maintenance and taxes onto landlords. It can also be a sound long-term investment. According to Fidelity, if renters save even $300 a month—the difference, say, between their rent and a monthly mortgage payment—that money, invested in stocks growing at only 4 percent, could add up to $114,000 in 20 years. (And that’s on top of earnings on a down payment that never had to be made.) “Over long horizons, if you reinvest the savings,” Harlow says, “you’re probably not going to find that much difference between renting and buying.” Saving hasn’t proved to be the national forte, of course. But with the bloom off the homeownership rose, it may have to be soon.
Posted in Generate income, Informational, Personal debt, education, purchases, success | No Comments »
Sunday, May 25th, 2008
Simple enough question but has anyone ever thought about why they want to become debt free? To some, becoming debt free is an opportunity to start over and possibly acquire more debt. To others, it may be a vehicle to stay par for the course and build financial wealth. To me, it’s an opportunity create a paradigm shift and start a family legacy.
Listening to one of Dave Ramsey’s Financial Peace lessons, he spoke on changing your family’s legacy and a lot of the things he mentioned within it made sense.
Growing up, I was always taught that money is… the root of all evil, can’t buy happiness, and you can’t take it with you, amongst a lot of other stupid myths. That got me thinking… all of those statements usually come from BROKE people. Dave is a firm believer of, “if you want to be rich, do and think like rich people”. The people that make those comments are usually the same people working very hard to achieve and accumulate nice things. I know it’s probably extreme reasoning but, do those people realize that when they say that they’ve basically thrown in the financial freedom towel?
I’m not stressing that money can buy happiness by any means. At the same time, I fail to believe that broke people are the happiest people on the planet. I also notice that crime is highest in poverty stricken areas, so why is the “root of all evil” comment accepted as truth?
Furthermore, the “can’t take it with you” comment is one of the most ignorant statements one can muster. YOU MAY NOT BE ABLE TO TAKE IT WITH YOU, BUT YOUR FAMILY CAN (assuming you have family). The comment is consistent with selfish and irresponsible ideology and it promotes and supports unaccountable habits that effect present and future generations.
That’s why I’m trying to get my family and anyone that’ll listen to think differently about what their financial freedom represents. It’s more than a chance to debunk the previously mentioned myths. It’s a chance to create a template of responsible behavior for future generations hence changing your family’s legacy. For when you have people working with your template and instead of against it, you have responsible family members that are fed the belief to make money work for them instead of them working for money.
Think about the hypothetical. I purchase each of my (responsible) kids their own home with cash. That one action is the beginning of a responsible wealth building family legacy that can will grow with each generation.
Before we get ahead of ourselves, I should mention that it’s very important to mold your family to think and be responsible before changing your legacy (more on this later). If not, the financial ignorance will set in and money will become, the root of all evil, nor will it buy happiness.
Posted in Informational, Inspirational, education | No Comments »
