As many of you know, I'm a big advocate for asking for a discount on items you are buying. And the higher the price on the items, the more important this is. So when I saw a comment by a reader about how to negotiate when buying electronics (which we all know can be expensive), I emailed him. Turns out he's a salesman at a major electronics retailer. I asked him to give us the "inside scoop" on how we can best negotiate savings on electronics and here's what he suggested:
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The best time to negotiate is end of the month. I don't mean like two weeks before. I mean like the 30th or 31st. Sales managers are usually willing to take a lower amount because they have to "get stuff out the door" to make their bonus. I'd also say for end of the pay period, but you never know when that is.
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If it's an entry-level TV (say a 720p or a manufacturer's low-end 1080p) or a TV below 42", don't expect much of a discount. These items usually have the least markup percentage-wise. If, however, you're going high-end, you'll find people more willing to work with you.
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Don't negotiate only on price. Most managers don't want to just give away money, but if you're buying a TV and a home theater system, there may be some leeway when it comes to any accessories you need. Maybe throw in the HDMI cable, or free delivery or setup.
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A local or regional store is more likely to be movable than a big-box like Best Buy or Sears. Although, recently, Best Buy has been haggling more and Circuit City is DESPERATE, so who knows.
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Buy from a commissioned sales person. We are professionals. We know our stuff. We want to make a deal with you. We want your business. We are there after the sale. You think that part-timer that makes $9.00 an hour cares if you're happy with your purchase? I sure care. If you're not happy and return the TV, I don't get paid. If your delivery gets screwed up, it comes partly out of my pocket. Most of the commissioned sales people I've met over the years know this. Some don't, treat their customers like crap, and don't last long because they have a 30% return rate (yes, we do track that). We've always said at work that the reason Circuit City, CompUSA, and Sears went downhill was because they got rid of their commissioned sales staff (or seriously hindered their earning potential).
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Do price research. If you see the TV on the Internet at a lower price, print the page out and take it with you. Be wary, though, a lot of Internet retailers are not factory-authorized dealers, and we will tell you that if you buy from them, any manufacturer's warranty will be void (which is true). We may not match it, but you may get a better deal from us. Be prepared though, we WILL figure out your shipping charges (on a big TV, this can be as much as $200!) and adjust our quote.
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Mention that you've been other places. We're suckers for market share and taking you out of the market, so if we can get your business over the other guy, chances are, we'll do it.
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Don't go too far. We have our limits of what we're willing to do. If you're mean, pushy, bossy, or set ultimatums, you most likely won't get what you want. We have pride too.
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Some brands will get you a better deal than others. LG may have a deal with Joe's Electronics, Samsung may have given ABC Video a volume discount. If you find a salesman pushing a brand that's questionable for odd reasons (Best Buy's notorious for this), chances are that's the brand they have the best margin with.
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If you do negotiate with us, be discreet. It's because of people that don't negotiate that we can with you. If the guy next to us hears you, he'll want a better deal. That'll make that salesman hate me, which means I in turn won't like you as much.
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Don't expect too much right now. Video margins are the lowest I've seen in the five years I've been in the industry. There really aren't any "crazy" deals like there were last holiday season. Sure, you'll find a 50" plasma for $899, but you can get that most of the time. Now, if you want to buy audio with your TV (which you probably will once you hear the craptacular sound those 10 watt speakers on your new $2000 TV produce), then you can snatch a bargain. You can usually haggle down to 30-45% off hang tag.
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Don't hold off for the "bottoming out" that newspeople are predicting. Trust me, they can't go much lower. You're talking about going from 45% margins to 13% in 18 months. Thirteen Percent!! That's the average margin in a flat-panel TV. If anything, I think prices will head UP in 2009, and most retailers agree.
Great Great Post! Many points that are very specific and not so obvious.
Posted by: Strick | November 20, 2008 at 11:08 AM
Great post FMF. Thanks.
Posted by: AdamCO | November 20, 2008 at 11:39 AM
Good advice, still, I don't think there's much margin for negotiating at Costco.
Posted by: Colin | November 20, 2008 at 12:07 PM
Yeah (re:Colin), how much of a discount should we expect at a major retailer, like Best Buy or Costco? Would it be better just to skip these big retailers and head to the ABC-Electronics in the area? I really am interested in getting another LCD, and I heard that they are at the lowest prices that they can get to this season, because of the economy, but where is the best place to buy electronics?
Posted by: Caleb @ Blueprint Economics | November 20, 2008 at 12:15 PM
I rarely buy from the big box stores or local retailers. They cannot match the service or price that can be found with on-line companies. As an example, if you have a few dead pixels on an LCD panel, try and get that replaced or fixed.
Next, it is very hard to tell how good a product really is when going to your local best buy and trying to compare and Samsung to an LG flat screen (same is true for other equipment). You have no idea if the retailer set up the picture correctly, etc.
There are easy ways to do homework and to find good retailers. Go to a few of the popular home theater boards on the internet. You can read up on everything that will compare brands, models, etc. and you will also see where people are getting the best deals. My favorite is the avsforum (www.avsforum.com). One word of caution: Some of these people are REALLY into perfection. Something that they find unacceptable, might be okay with you.
Posted by: JimL | November 20, 2008 at 01:04 PM
Good advice. You know, years ago I worked at a large electronics store and one of the things we 'gave away' all the time was the extended warranties. I was always willing to reduce the item price by the cost of the extended warranty because the commission was higher on the warranty than the item itself. See if they'll throw in the warranty, then go back a week later and return the warranty.Easy discount.
Posted by: Norman Stein | November 20, 2008 at 02:21 PM
I agree to go to commissioned salesmen. In NY I went to PC Richards and was able to haggle with them. In Best Buy you can't because they don't work on commission. I ended up buying the TV on line anyways at frys.com. Great site I recommend for everyone. Most stores don't match online prices so don't bother with that.
Craig
Posted by: Craig | November 20, 2008 at 03:41 PM
Commissioned salespeople are the way to go, especially if you have a pretty good idea what you want; you will get much better service. Once upon a time, Circuit City's commissioned salespeople could kick Best Buy's butt.
Posted by: cmadler | November 21, 2008 at 08:58 AM
Kudos for "don't go too far". Sometime back I spent a year selling cars. We'd get people in there who were never satisfied. No matter what, they were convinced you were sticking it to them and they wanted to get you first. I guess they didn't feel the dealership deserved to make any money at all. Doing your research will help you determine what a fair price is. If you go shopping armed with that information you will know when you are getting a good deal vs. when you are asking for more than the establishment can afford to give.
Posted by: Mary@SimplyForties | November 21, 2008 at 02:13 PM
Good advice.
Posted by: Jack | November 24, 2008 at 04:39 PM
You mention that you'll get better service from a comissioned sales person. What kind of service are you talking about? In my experience, once I buy the TV and it's in my house, any service is coming from the manufacturer, or an extended warranty provider.
Posted by: Joe | November 27, 2008 at 11:00 PM
What brands does the OP think Best Buy is "notorious" for pushing? I agree with Joe, after I get the television home, what service do I need from the salesperson?
Posted by: Ryan | November 28, 2008 at 01:26 PM
Ryan (and Joe) --
I believe he means that the salesman will be inclined to make sure you're happy in every way -- delivery, set up (if they do it for you), etc. -- to make sure you don't return the item (and thus have him lose his commission.)
Posted by: FMF | November 28, 2008 at 01:45 PM
FWIW, Lowes CORPORATE policy states they WILL match internet prices. They made the mistake of allowing me to see it in writing. The local store REFUSED to match a ridiculously low price for a Jenn Air gas/electric range. They said the price was less than what they paid for the item. I said that was not my issue. They ended up relenting. They do not add the extra 10% like they do for local price matches, nor are any additional discounts allowed. And they did NOT add shipping charges. SWEET!
Posted by: John H | December 01, 2008 at 10:11 PM