Improve your chances of a better price by 50%

There are plenty of ways to get a better deal, but at the core of them all is negotiation. Two parties will generally agree to some sort of concession on both sides. Example: You agree to pay in cash right now and the seller agrees to lower the price by 5%. However, in order to kick the negotiations off someone needs to ask for something.

Asking: the BEST way to get a better deal.
"It doesn't hurt to ask." In the case of getting a better value it certainly does pay off. According to Duquesne University, marketing professor Audrey Guskey, there is an excellent chance you can get a better price by negotiating, otherwise known as haggling. Guskey said consumer surveys back up her haggling success and that she encourages more shoppers to do so. "Only one in eight people haggle, so it's a very low number, but about 50% of those haggling actually get what they're asking for. They get a much better deal," said Guskey. If you knew there was a 50% chance of getting a better price just by asking, wouldn't it make sense to just ask the salesperson for a better deal today?

Successful negotiation
Several years ago my 6 year old daughter and I were at a fair. A vendor was selling $40.00 blankets and she wanted the one covered in pictures of butterflies. I told her we would ask for a better deal. We circled the vendor area and I put $31.00 in my right pocket.

We came back closer to closing time and I said to the vendor “Your work is absolutely beautiful. I would love to put one of these blankets in my daughter’s room. Are you willing to budge a little on the price?” She said the best she could do was give me 10% off. I pulled the $31 out of my pocket, counted it in front of the vendor as if I had never seen it before, looked glum, looked at my 6 year old, and asked the lady if she would take all the money I had in my pocket - $31.00. She looked at the money, then at my daughter, and she said yes.

How NOT to negotiate a better deal.
A classic example of how NOT to negotiate was given by former President Ulysses Grant long before he reached the White House. When he was nine he had saved enough money to buy his first horse. He had $25.00 to spend and his father gave him advice on negotiation before he left to buy the horse from their neighbor. Jesse Grant told his son to offer Ralston, the neighbor, $20.00 for the horse and see if he would take it. If Ralston didn't, Jesse said to go up to $22.50, and finally the full $25.00.

9 year old Ulysses went to the neighbor and said, "Papa says I am to offer you $20 for the colt, but if you don't take that, I am to offer $22.50. And if you wont take that, to give you $25.00." As you might expect, Ralston told Ulysses that he was unable to accept less than $25.00, at which point Ulysses gave him the full $25.00. Once the story got out it took Ulysses a long time to live down his first attempt at negotiating! Source: Ulysses S. Grant: soldier & president by Geoffrey Perret

Remember, successful negotiation also includes your willingness 1) to be fair and realistic about your initial offer and counter offers and 2) to walk away from a deal that just doesn't meet your expectations. That said, what will you ask for a better price on today?