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Red Pill TheoryNegotiate and spend like a pro (self.TheRedPill)

submitted by shittest101

Everything is negotiable - before you use your credit card or hand out cash - ask for a discount. If you forget anything you read here just remember this - You can negotiate and ask for a discount for everything you buy. Everything.

Doesn't mean you are getting a discount, but you can still always ask. Here are a few tips:

  • Leave your ego at the door - in asking for discounts at retail stores, or negotiating a raise from your boss - leave your shame at home. This is money, and in every transaction - it's a zero sum game. Ask for what you want with confidence, and back it up with objective reasons. "I bring value to your company, and I was the top salesman last year - I should be compensated accordingly"; "I'll buy three pairs of shoes if you are willing to give me 20% off." Don't just ask - do your homework, stay objective.

  • Establish a rapport - So much easier to ask for what you want, and 100x easier for the person with authority to give you want you want if they like you. Make a friend, tell them a story, listen to theirs. I remember when I bought a sofa while in grad school, I started chatting up this middle-aged lady who was the store manager (major American furniture retail store). The sofa was $899, already a great price. I told her I was in school and paying for it myself, she shared how her niece is also in grad school and she knows what I'm gong through. When it was time to pay, I asked for a discount. She smiled and declined. I asked again, pleading her that it will really help me out with the expenses and all. She said - " you know what, I'm allowed to give up to 30% for defective showroom sofas. Let's just say this one is defective."

  • Know the company policy - Every major retailer has a price match policy - bring them proof that a competitor is selling the same product for a lower price and they will match it. Some companies even match online prices. If they refuse, ask for a manager for assistance. Before you buy anything online, check for coupons and promotion codes. It takes literally 1 minute. Hotels will refund your money if the room stinks (or give you some future credit). Retailers like Macy's, Bloomingdales and Nordstroms will give you discount when buying more than 2-3 items. Almost all retailers give you student discounts (apple, j crew). Ask for a discount.

  • You win a negotiation in the preparation phase - never go unprepared. Know your bottom line before you walk in, and stick to it. Asking for a straight discount at a supermarket is silly, but you could prepare a coupon strategy and apply it at the point of sale - stick to the plan and you will be successful. If you are negotiating with a person - know in advance if it's better for you to give the first price or wait for them. My general rule: if the end price has an objective value that is easy to determine, it's better to set the first number. Why? it's better to anchor low because both parties know what range the final price will be. For example - buying a car in America. Final price will usually be somewhere below the invoice and the MSRP - so anchor low and give the first number. If you are negotiating with an artist to commission a portrait - let him come up with the price. It might be lower than your number, so don't shoot yourself in the foot.

My favorite negotiation tactics:

  • Question the price - "how did you arrive to that figure?" Always a winner. You ask for an objective reason for their price, so you can poke holes in the reasons for the price. Very effective.

  • Divide and conquer - if there are multiple things to negotiate at once, do them one at a time. Sticking with the car purchase for a second - don't tell the dealer you have a trade-in when you walk in. They will pull something like this on you: "look, I just spoke with the manager. He is willing to come down on the new car price, but he can't give you more than $2,000 on your trade-in." Don't let them do that, negotiate each transaction separately. Note that if you are in the opposite position, you want to ask questions early, so you can pull the same shit on them ("what are you hoping to achieve today?")

  • Know the leverage - who loses more if the negotiations break down? This is usually the most important question in every deal. Do you think your boss gives a shit if you leave your telemarketing job if you are middle of the pact salesman? But what if you are an asset? Is there a time when you have more leverage? For example - lets say you are a lowly manager for a retail store (a college job). Aside from your knowledge of the system (acquired through time only), you bring nothing special to the table. BUT - how valuable are you 2 weeks before Christmas? Will your branch survive without your 55 hours/week time commitment? Will it do worse? How long will it take corporate to replace you? Sidenote - if you are easily replaceable - time to find another career, but this is an issue to a later post.

  • Walk away - no need to for extra words here. Shake their hands, smile, and say thank you for your times - and walk away.

  • Show me the money - don't underestimate the power of cash. Show the other person the amount you are talking about, it has profound effects on people. For example, I bought my first car when I was 19, an old Toyota. It was an excellent condition, I was buying it from an old lady while her son (an accountant) was handling the negotiation. I offered half of the asking price. He laughed. I pulled out cash (in 20s, $4000 total), which looked like a large stack of money. His eyes lid up, he probably expected a check. I put the money in his hands and said: "keep it and let me have the car, this is literally all I have." I sold it 2 years later for $5,500.

  • Get a commitment / put them in a corner - condition your demand with an event. If you are negotiating a salary with a new company and they are playing hardball, condition the salary with performance (days worked a week, sales quota, etc...). If you are negotiating a lease agreement with the landlord - ask if they are willing to give you 5% rent discount if you rent the place TODAY (the word today is so freaking powerful in negotiation. learn to use it!) and give him 3 months advance rent (works magic). You basically give them a reason to make a concession by giving them a victory (what they don't know, is that you are wiling to give that concession anyway).

This shit is important. All of this comes up in everyday life - not just in business or buying stuff. School, family, broads - leverage, power, walking away - these are all TRP concepts that you have to master in order to get to the next level. Good luck


[–]justtookit 110 points111 points  (4 children)

This is really good.

It doesn't ramble. There's no fluff. Every point is even handed, focused, and logical. Incredibly useful and at the appropriate level of abstraction. Has examples. Open to extension and specificity in the comments.

I love this sub. Everything my father should have taught me and more.

Note that the information on tactics provided here should be combined with the social skills we also learn about here (such as remaining silent after making your point and forcing the other person to speak) for optimum effectiveness.

[–]boinko03 7 points8 points  (1 child)

"the first person to talk after you make your pitch loses". I was never a successful salesperson, but when giving it a shot, that line stuck with me. Its true incredibly often

[–]1Ill_mumble_that 1 point2 points  (0 children)

Solid stoicism helps. Never become emotional over a deal. I've broken the first person to talk loses rule many times by simply bring stubborn and saying something the other person isn't going to like with an energetic smile. Dealing with a person I can't stand yet still extending them professional courtesy and treating them like my best customer. There is no pride or shame when it comes to acquiring large amounts of currency.

[–]I_HaveAHat 1 point2 points  (1 child)

Also, subtly nod your head as if you're doing it subconsciously and people will be more likely to say yes

[–]Endorsed ContributorRedBigMan 3 points4 points  (0 children)

These aren't the droids you're looking for.

[–][deleted] 22 points23 points  (0 children)

You can haggle all you'd fucking like Dave, weed is still gonna be ten bucks for a gram.

[–]GRRMkills 45 points45 points [recovered]

Effort vs Reward: Will I sit in front of my computer for hours finding coupons to save $10 on groceries? No. Will I take 1 minute to check Amazon and get Walmart to price match? Yes.

Many of the things that r/frugal and most other budget minded groups advocate completely fail a cost-benefit analysis. I like that you keep focused on quick negotiations on big ticket items, where the cost-benefit ratio is very good. Definitely going to adopt some of your strategies

[–]mustang_mike 16 points17 points  (2 children)

Absolutely. I just paid someone $250 to do my taxes for me, which seems like a lot. But when you consider the time it would have taken me to do them myself (which I spent working instead), I'm actually making money.

[–]leverage010 5 points6 points  (1 child)

Same counts for cleaning etc.. If you make a decent amount of money, chances are you make more money working an extra hour and hiring someone to do your household work

[–]Lytalm 2 points3 points  (0 children)

On the other hand, if you hire someone for every chore in your house, you may become a slave of your work. But, if you really like your work, as it feels like a hobby, then go ahead. But if work is work to you, then you'd better do some chores instead of working extra time to earn the money to pay people to do your things.

[–]savedarticles 7 points8 points  (12 children)

The effort/reward ratio is important to keep in mind, however, you have to be careful about becoming cheap (aka 'frugal' to a bunch of betas).

Nothing will make you a bigger bitch then trying to save every penny and looking for good bargains. This is a scarcity mindset. Focus on building wealth and your career than saving an extra 100 dollars a month on your bills or saving 10 bucks during a night of drinking.

If you get to the point that 100 dollars a month matters, you fucked up somewhere and you should figure out how your income derailed along the way.

My energy is spent learning investing. I do the normal things to not get reamed (buy bulk costco, shop amazon, buy from carmax, cut cable) but nothing more. No energy is spent on clipping coupons or other time wasters. I tip generously and staff at the place I frequent love me. Their appreciation and happiness when I walk in is worth the 10 bucks I slip the barista I know periodically. It's so little money and has a huge payout.

[–]Endorsed ContributorDownvoteToDisagree 16 points17 points  (3 children)

It's far easier to limit spending than to increase income, keep in mind.

[–][deleted] 7 points8 points  (0 children)

Yup. 1 penny saved is 1.5 pennies earned. Taxes are a bitch

[–][deleted] 1 point2 points  (1 child)

Is it? I don't take shitty job offers but most my career I have been in a position where I can switch my job and get at least an extra 10% (including currently). To save the same amount of money by cutting expenses would require a major reduction in quality of life. (Not that I was ever even close to spending all I earned... that would be dumb)

[–]1Ill_mumble_that 1 point2 points  (0 children)

Unless your job is paying you 70K or more you are probably better off working for yourself.

[–]GRRMkills 2 points2 points [recovered]

Carmax? Nah, go private. You'll save a shit ton of money and have more options.

Anyways, not looking like a cheapass is why I mention the effort/reward ratio. It relates to the law to always make your actions seem effortless. If you look like you try very hard to save a few dollars, then that will make others think poorly of you. However, taking 1 minute of your time save $10 or 15 minutes to save $300 is not going to make you lose respect from anyone whose respect you'd value.

$100 a month should not make or break you, you're right. However, that's about how much money it'd take to put a nice motorcycle in your garage with insurance and depreciation considered, or in a year ($1200) to put together a good home gym. It certainly makes a difference

[–]savedarticles 5 points6 points  (4 children)

Hear me out.

First, carmax will give you a reasonable price on a used car. They will provide peace of mind. It's just really point and click and a car arrives. You are paying a little more to provide a huge convenience. That is what money ultimately buys, convenience. If your time and energy has value, then carmax is a fantastic deal.

Now, here's the deal. You can always penny pinch to free up cash to buy things. Yes. But this is scarcity. You are taking from one area to achieve other. So, you can stop eating at restaurants you like to buy a motorcycle. But all you've done is substituted one thing for another. You haven't grown any richer and spent a lot of energy.

It's better to ask (pardon Rich dad poor dad reference), how can I increase my cashflow to afford this rather than depriving yourself from one area to fund another. That is net sum of 0. 'How can I grow my investments to pay for a motorcycle' is the attitude to have.

Don't spend your time watching mint or trying to save here and there. Spend your energy investing in skills and growing your portfolio. All other approaches psychologically affect you negatively.

[–]Endorsed ContributorMentORPHEUS 0 points1 point  (1 child)

First, carmax will give you a reasonable price on a used car.

Okay, MAYBE if you are a negotiator on par with OP or perhaps William Shatner in his Priceline days. Carmax will also stack a $7500 car up to $19,000 by the time they get done with add-ons and financing, if you're not.

[–]Endorsed ContributorRedBigMan 0 points1 point  (0 children)

That's just it... if you have the balls to walk away and go somewhere else that alone sets you in the 90%ile of negotiatiors because most people go into a used car deal with the expectation that they will buy a car then and there.

[–]Endorsed ContributorRedBigMan 0 points1 point  (0 children)

So, you can stop eating at restaurants you like to buy a motorcycle. But all you've done is substituted one thing for another. You haven't grown any richer and spent a lot of energy.

Or you could switch from a huge ass gas guzzling SUV to a motorcycle and the savings on gas alone will pay for itself.

[–]savedarticles 3 points4 points  (1 child)

This is good too:

wallstreetplayboys

[–]jumpingdonkey 0 points1 point  (0 children)

thank you for the link, it is a interesting read.

[–][deleted] 10 points11 points  (4 children)

This is fantastic. I feel like we need more red pill of business related stuff. Can anyone point us to useful resources on this?

[–]rpscrote 17 points18 points  (0 children)

  • How to Win Friends and Influence People -- Dale Carnegie
  • Gettting to Yes -- Roger Fisher and William Ury
  • Bargaining for Advantage: Negotiation Strategies for Reasonable People -- Richard Shell

[–]shittest101[S] 4 points5 points  (2 children)

It's so much more than finance. Negotiation and leverage are concepts that you can apply to everyday life - with women, your parents, and your friends.

[–][deleted] 1 point2 points  (0 children)

ahh tired, I meant to say this is fantastic! Edited.

[–][deleted] 0 points1 point  (0 children)

But yeah, I'm very grateful for this

[–]RaginCajunProdKrewe 8 points9 points  (2 children)

Somewhat curious about the "everything" you so emphatically put on the end of the intro. Grocery stores, cinemas, liquor stores, etc...won't negotiate for a couple reasons: the clerk making the transaction on the store's behalf literally cannot alter the price, because the stuff is rung up on a machine with the prices unalterably preprogrammed into it one way or another and because they simply aren't going to. I've worked in these sorts of places before, and if someone tried to do this, I'd tell them no and if they continued I'd probably be laughing at the fact that they think I'm actually going to do that.

Seems only logical for larger (I.E. non-mundane, non-staple) purchases. At first I thought I may've been taking your "everything" to literally, but bolded and repeated = literally.

That all having been said, the spirit of the post is right on and something we ought to think about more, as the skill itself is priceless.

[–]Endorsed ContributorMentORPHEUS 4 points5 points  (0 children)

Well put; I hate dealing with customers who take the "everything" far too literally. Whether it's someone holding up the line in front of me, berating the cashier because Kleenex was 19 cents lower two weeks before, or playing the "I don't pay sales tax!" game, or attempting to aggressively chisel the pre-agreed price after the other party has delivered/performed as agreed; there are always trolls at large in the world of commerce and trade. DON'T be "that customer." You'll still get deals where possible and appropriate.

OP is spot on for negotiating well, where it is appropriate.

[–]shittest101[S] 3 points4 points  (0 children)

I do mean everything, in a sense that you can always ask and you will be surprised to see the results.

Grocery stores - managers usually (depending on the store's policy) have discretion to discount damaged/defective packaged items

I even call my cell phone carrier/internet provider and ask for a discount on my bill. Takes 10 minutes while I'm driving and it usually works

[–]makesomewyrms 6 points7 points  (1 child)

I lived in Peru in 2009. When I started living in the country I didn't speak spanish that well (high school education level and it was 5 years later with no practice). Whenever I had a conversation with someone I would take a while to answer and try to find a way to understand what they said and how to express an answer. The funny thing is that when people approached me on the street to get me to their hotel I wouldn't answer right away and they would start lowering the prices by themselves while I remained completely silent trying to figure out what they were saying. I later discovered it also worked better I I stayed silent after I stated my intent. Silence is uncomfortable for a lot of people, if you can maintain eye contact and remain silent during a negociation it can work in your favor.

[–]shittest101[S] 4 points5 points  (0 children)

I completely forgot to add silence to my tactics. This is a huge part of a negotiation, re body language. Silence can be measured in gold

[–]Senior Contributorveggie_girl 5 points6 points  (3 children)

The most important thing to remember with all this is the time/cost ratio. How valuable is your time? Really, the value of your time is infinitive. If you can afford to pay for convenience, it's worth it. If you don't have the $$ to pay for convenience, your time is better spent increasing your skillset so that you can acquire more $$.

Example: Is it worth spending 1 hour clipping coupons to save $20 a month on groceries? Probably not. Is it worth a few hours talking to mechanics and multiple dealerships to save $5K on a new car purchase and make sure you don't get a lemon? Most likely.

[–]shittest101[S] 5 points6 points  (1 child)

I don't know the correct answer to your point. I can tell you that my father, who built a $30 million dollar company with his hands and acumen alone, still clips coupons and negotiate everything he possibly can. He always was like this.

Could he be better off if he stopped and value his time better? Or part of the reason he is wealthy and still maintain his wealth is due to his habits?

I really don't know

[–]rpscrote 3 points4 points  (0 children)

I think the causation here is reversed: likely the kind of people who naturally clip coupons are more likely to be successful business people

[–]Lytalm 0 points1 point  (0 children)

You spend your time how you value it. Are you happy spending 1 hour clipping coupons to save 20$ a month on groceries? If yes, good for you. Altho I'd probably not.

[–]jakethesnake76 2 points3 points  (0 children)

i do this at my local Ace Hardware all the time if it's small amounts i don't bother but $40 or more they'll give you a 15-20 % discount and i remind them i can drive about 15 mile to a Lowes and get it for the discount price i am asking for. It makes the difference between me getting something i want or skipping it sometimes.

[–]nigmondo 2 points3 points  (0 children)

Fantastic post packed full of practical advice.

I'm lucky in that my parents raised me in the way of bargaining for a better price, but not everyone is in that position.

If you are making a purchase, set the price you are willing to pay upfront and be ready to walk away of you don't get it. I'm normally happy if I can get 10% discount, but always try for more.

If you are looking to buy a car from a dealer for example, always work on bargaining the price first. When the seller has agreed a price that is as low as you believe they will go, then start on the extras. A set of cool alloy wheels, a service, even a full tank of petrol.

Remember the golden rule....

If you don't ask, you wont get!

[–]Entrefut 2 points3 points  (0 children)

Please understand the difference from a retail worker and a sales person if you're going to do this.

[–]TheSliceman 1 point2 points  (0 children)

Great stuff man. Thanks for this.

[–]KublerRossWasWrong[🍰] 1 point2 points  (0 children)

Always have a BATNA, generally don't reveal it, be ready to take it.

[–]throwawaymontreal21 1 point2 points  (0 children)

you are exactly what ive been lookin for . i am horrible at this stuff. too much ego. need more of this stuff.

[–]AEther_Flux 1 point2 points  (4 children)

I am terrible at negotiating. Scratch that, I WAS terrible at it, until I read this. Top quality post, and I plan on using these skills the rest of my life.

[–]rpscrote 1 point2 points  (3 children)

negotiating is like cold approach. You wont get the nonverbal signals down until you do it enough times its natural. Posture, eye contact, firmness of voice, tonality are all going to change how your negotiation goes. Asking questions is almost always good as it exposes little of your position and lots of theirs, whether you decide to be aggressive or cooperative, it will help. You're probably still bad at it, so go practice

[–]AEther_Flux 1 point2 points  (2 children)

I started to practice today at work. I am bad at it, but I'm going to get better.

[–]rpscrote 2 points3 points  (1 child)

Check out "What Every Body is Saying" by Joe Navarro, it's a great body language book that's very accessible and includes illustrations of the postures. It'll immediately help.

[–][deleted] 1 point2 points  (0 children)

Go on the last day if a sale event, or last day of the quarter; they'll be more willing to bargain to meet their sales figures.

When dealing with credit card fees that are your fault (late fees, etc), always ask for '1-time courtesy' waivers. They'll more likely than not waive it. I've had late fees, annual fees, interest, all of them waived with credit card companies. Just demonstrate your humanity by saying something like 'I've been so busy with this new job/house/baby and I just forgot to pay the bill'. Compassion and empathy work here.

[–]b38497988 1 point2 points  (0 children)

/u/shittest101 What do you think about:

Law 40

Despise the free lunch.

What is offered for free is dangerous – it usually involves either a trick or a hidden obligation. What has worth is worth paying for. By paying your own way you stay clear of gratitude, guilt, and deceit. It is also often wise to pay the full price – there is no cutting corners with excellence. Be lavish with your money and keep it circulating, for generosity is a sign and a magnet for power.

Do you think it's best to switch back and forth depends on the situation, and how do you know when you should be paying the full price for something?

Thank you for an excellent post

[–][deleted] 2 points3 points  (6 children)

"This is money, and in every transaction - it's a zero sum game." Total bullshit. Both parties benefit from transactions. Ones mans gain isn't another mans loss. Thats progressive diseased thinking.

[–]camelCasettes 2 points3 points  (1 child)

The transaction isn't a zero sum game - but the money is.

[–][deleted] 0 points1 point  (0 children)

Alright thanks for clarifying.

[–]fhghg 0 points1 point  (1 child)

Yea, but the money part. If we do the deal the good gets do e. So in total we have +1. But now who's going to get the better part of the +1? That's zero sum

[–][deleted] 0 points1 point  (0 children)

I see the point now, I Agree.

[–]shittest101[S] 0 points1 point  (0 children)

Respectfully, I disagree. You are correct in the sense that a transaction can have 2 winners, but the old school positional bargaining theory looks at this dynamic differently.

If you adhere to the old school thought, you are taking a much more hard line approach to the negotiation (and much more aggressive style as well) - which is not something I recommend to anyone who wants to use it with people you interact with on a daily basis. But the key here is to use that mentality because 80% of the time, especially in liberal America - people will fold first to aggression and persistence. They will hate you for it, but you get what you want.

[–]rpscrote 0 points1 point  (0 children)

certain transactions are zero sum, but many aren't. The key is to calibrate your approach to the situation.

[–][deleted] 1 points1 points

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[–]aphraxian 1 point2 points  (1 child)

1.) Do research. What could you get elsewhere?

2.) Stay stoic, be willing to walk away. If you are not completely certain that you can walk away, book an interview or two with competing companies before your negotiations just to see what you are worth on the market. If this is impossible due to the world being too small, focus more on research.

3.) Tell them what you want, and why you are worth it. Try to minimize the words you use to justify your worth to bare minimum, minus some. The more you explain yourself, the less worth you project.

4.) If you are not actually ready to walk away, ask for more than you want. You will settle for less than you ask for anyhow.

5.) the point number 3. can not be over-emphasized, be very concise with your assessment of your own worth. This varies a bit culturally, but if you are really worth what you are asking for, then you should never over-extend when you explain yourself. And especially not if you're not worth what you are asking for.

6.) Never compare your achievements to others, stay with the facts and demand what you know you deserve.

7.) If the person you are negotiating your salary with can not fill the blanks mentioned above, seek another job.

[–]Endorsed ContributorRedBigMan 0 points1 point  (0 children)

4.) If you are not actually ready to walk away, ask for more than you want. You will settle for less than you ask for anyhow.

Shoot high... because you know they might just accept what you ask for without negotiating or very little.

Also if you do have to give up raw income, make sure you get some sort of non-monetary compensation instead. Some perks you can pull out of them might actually save you time and money in the long run.

[–][deleted] 0 points1 point  (2 children)

Does anyone have a version of this for debt collection?

[–]4delicioustreats 1 point2 points  (1 child)

Not if its already gone to collections, but if its still with the lender they are idiots to sell to collections, that which they may get themselves.

[–][deleted] 1 point2 points  (0 children)

I'm a debt collector, which I feel is tangentially related to sales in a way.

[–]VermilionMan 0 points1 point  (0 children)

Thanks man, this is good stuff. Is there a guide on how to apply business practices to game?

[–]Entershikari 0 points1 point  (0 children)

Dude, I'm finishing my studies in 2 weeks and will start a job in B2B sales.

Thank you so much for those insights on being RP in the business world.

It means for me.

[–]evilindy 0 points1 point  (0 children)

Nice summary. Much of this reads like Dave Ramsey's material. Are you a fan of his?

[–]iluvpeople 0 points1 point  (1 child)

This is great advice! Any books you recommend?

[–][deleted] 0 points1 point  (0 children)

Everywhere I go, I ask for the family discount and Scooby Doo Fan Club discount. It has worked many times. 1 time in Target. The girl laughed and game me an employee discount.

[–]left4dead02 0 points1 point  (0 children)

thank you for this post. I started asking for discounts and i have been getting them.

[–]throwawaymontreal21 -1 points0 points  (0 children)

this guy must get laid so much (serious)

[–][deleted] -4 points-4 points

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[–]fhghg 1 point2 points  (0 children)

You missed rhe one about walking in straight lines and bumping in to folks.