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My Italian mother-in-law, Ada, negotiates
My Italian mother-in-law, Ada, negotiates the price of virtually everything she buys. My wife cringes when Ada haggles, but I just love it!
One of these days, I am going to convince Ada to visit a Home Hardware store with me. Home Hardware stores are independently owned stores, like car dealerships, selling virtually the same products in each of their stores.
I don?t mean to pick on Home Hardware (choose any retail chain), but these retailers have a distinct advantage over new-car dealers. Their non-negotiable formula allows them to maintain consistent, decent margins on their products.
I?m going to ask Ada to make ?an offer? on a new lawn mower. Surely, the employee behind the counter at Home Hardware wouldn?t refuse a reasonable offer, would he/she?
I wonder if the Home Hardware sales rep would ask his/her manager if our offer on the lawn mower was acceptable. Would the manager hide in his/her office or come out and discuss the offer with Ada?
Could Ada ask to see the invoice cost on the lawn mower?
Would Home Hardware accept our old lawnmower as a trade-in?
What about zero percent financing over three years?
The sales clerk would most likely shake his/her head, and say, ?Sorry you cannot see our confidential cost price, we do not accept trade-ins, and we accept only cash, credit card, or debit.?
?That?s our price. I?m sorry but we do not negotiate.?
Maybe Ada and I could form a consumer advocacy group to lobby Home Hardware and other fine retailers for the right to see their invoice costs and to negotiate prices at their stores.
In the auto industry, there are plenty of for-profit, ?consumer? organizations that try to tell us how we should run our business. Why shouldn?t all retail stores have to comply with the same consumer pressures that car dealerships have?
Here?s another example to support my point. I recently visited a national men?s clothing store. I am a typical male shopper; I shop once or twice a year. After selecting two suits, three shirts and two ties, I asked the sales rep, Frank, what he could do for me on the price if I bought everything.
?Nothing,? was his pleasant reply. He couldn?t offer me a single percentage point discount or even a lousy free tie. I have been negotiating car deals for 33 years and I couldn?t get Frank to budge a penny on my purchase. I did, however, receive a very attractive clothing bag to hold my purchases.
Here comes the double standard: The owner of this national clothing store has purchased a car from me. He sure took a run at me on price! He can hold firm on his prices and that?s okay, but when I try to negotiate with him, it?s unacceptable. What gives?
When it comes to negotiating, some people enjoy the process. Others hate it. According to surveys, 33 percent of people hate negotiating the purchase of a new car. Personally, I hate giving away my slim margin and I, too, would prefer it if customers stopped negotiating.
Over the years, the manufacturers have been reducing dealership margins to the point where dealers have very little room left to discount. People think that we enjoy huge margins on new cars ? you should see some of the ridiculous purchase offers that come across our desks!
Despite all of the above, the majority of new-car dealers still negotiate the price of virtually every new or used car that they sell. That?s been the status quo for decades.
Dealers don?t exactly discourage the practice of negotiating. Aggressive advertising (?Make your best offer!? and ?No reasonable offer refused!?) sends the message that dealers expect consumers to try and negotiate the best deal they can. Consumers can hardly be faulted for answering such a tempting invitation.
Customers should be thrilled that we negotiate, and they should complain loudly about the companies that refuse to negotiate away their margins.
I am really looking forward to accompanying my mother-in-law to that Home Hardware store soon. I can?t wait to see the look on the sales clerk?s face when Ada makes her initial ?below cost? offer on that lawn mower.
Ken Shaw Jr. is President of the Toronto Automobile Dealers Association and is a new-car dealer in Toronto. E-mail comments to president@tada.ca
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