I fancy myself to be quite the negotiator… particularly when it comes to purchasing high ticket items such as equipment, business contracts, home improvements, electronics, jewelry and even more costly items like automobiles or real estate. This ability to secure “best” pricing is the result of lessons I have learned over the years watching others and experiences of my own. You see, it is not just about “beating” someone up to get the lowest price… rather, it is about getting the lowest possible price without hurting the supplier or engendering ill will so that you can come back a week, month or year later and the vendor/ supplier is still interested in doing business with you. And it is about honoring the terms of the deal/ agreement so you maintain your integrity.
It was the summer of ’72 and I was about to return to school to my junior year of college. I had been saving money for a new sound system for quite awhile. The latest and greatest thing at that time was “QuadroPhonic Sound”- which sent the sound to four speakers place around the perimeter of your room breaking up the individual instrument tracks so you thought it was a live performance (We were young and innocent- what did we know?) There were also a new group of specially recorded record albums that had been recorded in “Quad” to enhance the experience. I was anxious to “Let the Sunshine In!”
After months of research, (which would become the harbinger of my buying style for years to come), I negotiated a deal with Custom Audio, for about $2,000… a lot of money for today and a ton of money back then. I was about to pull the trigger on the deal but at the last moment, pulled back explaining to the salesman that I needed another day to make absolutely sure that the system I was getting was everything I dreamed of. I took that extra time to go to Custom Audio’s number one competitor- Crazy Eddie (a fixture in NY electronic retail known for their huge buying power and low, low prices).
Eddie matched component for component and I innocently slipped and shared with the salesman the price I had gotten from Custom Audio which was “secret.” I unintentionally gave a price that was $200 lower because I had forgotten to include the cost for high end audio cables that was on top of Custom’s price. So imagine my surprise when Crazy Eddie offered to beat the price by an additional $100 INCLUDING the special cables which actually meant their price was $300 below Custom’s. It was CRAZY! I didn’t take the deal feeling an obligation to the original salesman who had worked so hard for my business. I felt that he was entitled to a visit from me.
And so, in this true and happy tale (happy for me at least), I went back to Custom Audio and shared that I had gotten a price that was much less than the price they had given me… a price that was nearly 20% less than theirs. (Somehow, I had learned to round off in my favor when under stress!) The indignant salesman, (he was really peeved at Crazy Eddie) said that he needed to talk to his boss- that he wasn’t going to be undersold by those SOBs. Two minutes later he returned and we made the deal for under $1500. I told him that I really didn’t want him to drop his price so much that he didn’t have to beat Crazy Eddie’s number but at this point he was committed to getting the business and not letting his competition get in the way. So what did I learn?
Well, for one thing, I learned that Quadrophonic really wasn’t that good. The sound became muddy when the volume went up. But more importantly I learned that the market competes with itself. All I had to do was find a comparable item and get a price from a hungry competitor and let them show me what the market would bear.
