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Tuesday, January 11, 2011

The Art of the Deal

My mother has often told me the "Squeaky Wheel Gets the Grease".  I suppose that's a simplification of a rather difficult proposition at times.  When buying anything -- cars, advertising, haircuts, toasters, etc. -- there is more than a decent chance of asking the business owner for a discount.  Of course, the bigger the ticket item the more you want to push.

The U.S. is a bit of an odd duck in this area.  Believe it or not, most countries expect you to dicker.  I've learned that people from India are particularly price sensitive on the purchase of things.  Those types typically just "want the job done" at the cheapest price.  Unfortunately, that costs them money in many aspects.  Quality many times just gets discarded.  The true measure of a product IMO is value.  Sure.  I can buy a Chevy Cobalt, but is it going to last or will it cost me in repairs?

Value is then the driving force behind a deal.  The bigger the ticket item, the more research you should put in up front.  Consumer Reports is a frequent haunt when my wife and I buy.  It gives great comparisons and average prices.  So, when we do narrow it to the two to four models we would like, it is then we go price hunting.  I think we've successfully driven this home to our daughter.  She just bought her first car about a year ago and she researched and researched.  She listed out the options she wanted and finally settled on about four models.  When we went car shopping, we felt we had an edge in knowing the value of the cars.  We didn't buy the cheapest one, we bought with value in mind.  We weighed the options first, and made an informed choice.

On an every day routine purchase, get to know the discounts involved.  Take pizza for instance.  I always ask about the specials.  I could have for instance yesterday, just went ahead and ordered a large one topping pizza for $12.49.  When I asked about any specials, they had one:  A large up to four toppings pizza for $11.11.  I also purchase my haircuts in advance with a gift card.  Why?  $9.99 vs. $13.00 regular price.  Once you are in a stable financial situation, pre-paying can be very powerful and save fist fulls of cash.  You just need to pay attention or ask. 

I recently pointed out that one advertiser's rates were nearly double their competitors.  If I'm buying quality, I weight that, but rarely would a price be double even factoring that in.  I could literally buy two lesser products that might last only three-quarters as long, but I'd easily be money ahead.  Quality is important and goes a long way toward value pricing, but there is always a break even point.  That point is the tipping point of value.

So, go out there and don't blindly buy.  Think about it.  Ask for discounts and most important -- pay attention.  That large jar of spaghetti sauce that isn't on sale may not be the bargain.  The smaller jar which is on sale is.  The price per ounce or pound is the better measuring stick.  The art of the deal is all well and good.  But the one who prepares, pays attention, and asks for discounts is the one walking away with the best valued product.