1. Who “anchors” wins The anchoring effect is a tool used to pin buyers’ expectations on a (usually high) price. Market shoppers may remember a time a seller offered a high price and then discounted it – making the reduced price seem more attractive than if it was the original offer. A lesson to be learnt is to be aware and to try to be the one to set the anchor rather than letting the seller do it for you.
2. Know your neighbours Being alert to local customs can go a long way when negotiating the best price – especially when travelling, writes Yale political science and economics assistant professor Chris Blattman. In many countries there are what he calls, the “national bargaining fraction”, an unwritten rule which gives a guide to how much to negotiate by. In order to find out this fraction Blattman suggests calling upon the locals and quizzing them on the “real” price.
3. Busy is best Market sellers might agree on how much they will charge for certain products but University of Chicago economist John List wrote in The Economics of Open Air Markets that these agreements tend to break down on busy days. This means when markets are busy, it might be easier to strike a cheap deal.
4. First impressions The same research by John List also suggests that market sellers are more likely to offer higher prices to well-dressed individuals, especially those shopping with children. As the old adage says “first impressions count”. To try and avoid being offered such extortionate prices, try leaving your best outfit (and the children) at home.
5. Flash the cash Paying with cash can reduce spending because you are forced to think harder about the purchase process. Behavioural economists refer to it as the “pain of paying”. When it comes to negotiating taking cash rather than card may bring the true cost to the top of mind and encourage buyers to drive a harder bargain.
6. Out of season Picking the right moment, or in this case season, is a great way to give shoppers an advantage when negotiating. The off-season shopping style can apply to a wide range of products, from small items such as clothing through to holidays and homes. Take advantage of sellers wanting to get rid of stock. Budgets are Sexy blog even goes as far as to recommend a “best time to buy list” to give a guide as to when to negotiate on what.