Monday, August 16, 2010

Negotiating Prices on Craigslist

This will apply to both buyers and sellers on Craigslist, because price is usually the point of contention on which a sale hinges. In the commercial world, price is often not the sole determinant of a deal, as you would have issues such as servicing, shipping, warranty... etc. But since none of these apply to used goods, price become the final issue to settle between buyers and sellers after the condition and legitimacy of an item are settled.


First, what prices are not:
  1. There is no such thing as a 'real' price. Prices by nature are not fixed; therefore, there is no such thing as a 'proper' price. Prices arise from market forces (supply and demand) and are not mandated by a greater authority.
  2. Prices do not have an emotional value. Nobody will pay more for your camera part because you love it.
  3. Prices do not represent a win-lose situation. Too many people approach negotiation as the other side was an enemy. Remember, a deal can not be completed unless both sides feel that it is beneficial to do so.

Sellers:

  1. Do your research. The best thing to do is to watch Cragislist a few weeks ahead of time to see what people are asking for. You will also get a feel for what is too much and what is too little.
  2. Do not put down a firm price. Chances are, you will be negotiated down from this price anyway. As well, a firm advertised price shows a degree of inflexibility and lack of creativity. Some people will write down "$100 firm" because they think it will save them the hassle of having to negotiate the final price. They do this to their detriment. How would you know that if you had listed the item for $120 than you wouldn't have gotten $110? 
  3. Do not write "Low-ballers will be ignored". You will ignore them anyway, so there's no need to make yourself look like a jerk. A certain number of people will be turned off and will look elsewhere, so why reduce the number of potential buyers immediately off the bat?
  4. Forget about the package deal. Sometimes you will see ads out there bundling  a whole camera system. You should leave the possibility open, but in the way that economics works, bundled deals mean that you would get a lower price per item than if you sold your items separately. As well, a lot of adds for bundled systems are scams, or at the very least, opportunistic rip offs. Less scrupulous sellers will through in a bunch of things into the mix hoping to catch somebody who is ignorant about prices and who might be lured by the promise of saving money in a bundled deal.
  5. Nobody cares about swapping stuff.  I've seen proposals out there for deals like "My Nikon D90 + cash for your D700". It could happen... but think about what the incentives and implications are for the D700 shooter

Buyers

  1. Balance saving money against the possibility that somebody else will get to the item first. If it is a popular item like a Nikon 50 AF-D or a Tamron 17-50, you will likely only get one shot to offer a price before the seller looks at the competing offers. You've got to make it count.
  2. If you are going to low ball, don't insult the seller's intelligence. It's okay to put in a low ball offer, but the chances of the conversation continuing will be much greater if you convey a sense that you know that the offer is low and that you are not doing it as an insult to the seller's intelligence.
  3. If you are going to offer a low-ball price, make it stick by offering to make the sale more convenient for the seller. Offer to meet the seller ASAP or at a location that works better for them. Buyers should be worried that another buyer will steal the sale. Sellers are just as worried about potential sales falling through, because the time wasted with each failed effort adds up. Sometimes a low price is palatable if there is a reasonable guarantee that the sale will happen.
  4. If you can point to a previous posting with a lower price, then do so. It will strengthen your bargaining position. The seller would be under no obligation to match that price, but for the buyer, the price becomes slightly more objective and less a matter of opinion.

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