Internet, apps have changed negotiation landscape

by Marty Latz - Apr. 5, 2012 04:30 PM
Negotiation

Question: My wife recently saved us significant money on new furnishings for our family room. In shopping around, she found surprisingly large price differences for identical products.

Similarly, a training-program attendee recently told me he received three very different bids to redo his patio, ranging from $10,000 to $20,000.

What's going on here?

Answer: Overall, the consumer negotiation landscape has been fundamentally transformed over the past 10 years due to the Internet and online retailers like Amazon, individuals' ability to efficiently to buy and sell almost anything on sites like eBay and the availability of comparison-shopping apps. This change has been accelerated with the recession.

The bottom line is consumers now rule to a much greater extent. This has impacted three negotiation elements, each of which can be used to get better deals on significant purchases:

Leverage now largely favors consumers.

Consumers' ability to efficiently shop around and find the same or similar products on multiple online sites plus in traditional storefronts -- and to do so in minutes -- provides strong leverage.

If I want Product X from Store A since it has great customer service, but can buy it from Online Sites B and C for much less, that's strong leverage when negotiating with Store A.

Our recession also helped consumers as retailers were desperate to sell and fewer consumers were buying. Being desperate with fewer Plan B's is very weak leverage.

Independent "fair" standards are more accessible.

The Internet has empowered consumers with market and cost data and retailers' pricing strategies that can be used to get better deals. Consumers can also now find many more deals out there (including Groupon, etc.), shedding more light on what has always been significant price variation in the marketplace. This will help you get what you perceive as a "fair" deal.

Do your homework.

Just because consumers can get better deals these days doesn't mean they will. Stores continue to include significant markups expecting many consumers to buy on impulse or not to negotiate. And they're right.

Of course, there's nothing wrong with this, especially if the possible discount isn't significant. Remember, though, it doesn't cost you anything to ask.

Interestingly, my seminar attendee redoing his patio told me he was strongly leaning toward the $15,000 bid even though it was $5,000 higher than the low bid. Why? He felt that contractor would provide much better service and higher-quality work. Quality and service were more important to him than price. Keep this in mind, too, in your negotiations.

Marty Latz can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

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