Haggling Strategy

Jewelry Discussion
1

Ok, once in a while I get the person who wants a bigger discount
than I just offered. Offer 10% they want more, go to 15% and they
want more, and so on. It won’t end until I END it. So I stopped using
percentages. I use price numbers. Either the price itself or a dollar
figure off.

anecdote in point… Lady haggles me to death. The item is $1,500
"can you give me a better price?" so I go to 1300. “No, i want a
BETTER price” so I go to 1200. “No. you gotta make it cheap” This
goes on and on til I’m disgusted. Finally I pull out a calculator,
hit some fictitious buttons and say to her…“Eleven hundred ninety
two dollars and seventeen cents”.

Lady gets a stunned look on her face but buys it.

I assume the oddballity of seventeen cents conveyed that was
absolutely the best she was going to get and that she had beaten me.
That day, I would have taken a thousand dollars.

Anyone have any other creative closers?

2

Instead of the markdown, give her a $300 gold bracelet. She’ll
forget the discount you just gave her, but she’ll percieve the
freebie bracelet as a momentous token of her haggling ability. Oh,
and note her name and number and put it in your file of “people I
want to take car shopping with me”. Call her next time you go to buy
a new car. lol

Stan

3

Hmm… that’s interesting, although why do they think they can haggle
in the first place??

Craig
www.creativecutgems.com

4

Neil,

This is a dangerous cycle you are getting yourself into here. I’m not
sure but I think you are a buy/sell jeweler, not someone who actually
makes most or all of what they sell (although my comments apply
either way). I know that it is tempting when you are a buy/sell
jeweler to discount because there is less of you invested in the
pieces and there is far more competition for you then there is with
someone like myself (they can only get my product from me),
especially when you’re looking at those large bills coming due next
week. However what you have to think about is this. About half of
most small business customers come from word of mouth. Every time
you discount to someone they go and tell people about it. Sure, they
may say, oh the guy has good product and he’s nice, but he’ll also
give you a discount if you just ask for it. Bam. You now have ten
more customers walking in the door, all of whom expect you to
discount for them. Every time you do it for them, then you have ten
more for each one. Soon, no one coming in wants (or expects) to pay
full price. And pretty soon you’re like Wal Mart, operating on
margins that are so razor thin that unless you have Wal Mart volume,
you might as well just throw in the towel. Unless you want to play
the exceedingly unethical, and somewhat illegal, game of marking
things up so that you can discount them all the time (regrettably a
common practice in the retail industry as a whole). So here’s what I
would do if I were you. Set a price you believe is fair and you can
make money on. Explain to your customers that the prices you have
listed are the REAL prices, that they are fair, and that it is your
final price. Show them the value of your product, not the price. Make
them believe in you and your expertise. Back up your prices with some
guarantees. And then stick to your guns.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140

5

Daniel, I certainly don’t seek out price only shoppers. But they
exist. The idea behind my post was how to end a relentless obnoxious
haggler.

I spend most of my time with custom design. I do have an inventory
of nicer industry made pieces also. I have a financial obligation on
that merchandise. It needs to turn over. If it takes a reasonable
discount occasionally I have no problem with it. I can live with
’feel good’ discounts. And the customer returns for another purchase.
If one customer requires hand holding or snob appeal she gets it. If
another needs to feel she got a bargain(one that I can live with of
course) she gets it. If she needs to have something totally unique,
especially designed for her and made to a T, she gets it. The essence
as I see it, is to consumate numerous profitable transactions. Sounds
cold I know.

I would LOVE IT if ten people came in to buy at a discount. Suppose
the combined list retail was $20,000. It all sells at 25% off,
average, let’s say. That’s 50% over what I paid(or owe as the case
may be). I can’t sell a diamond of that value at anything over 15%
markup. And I’ve made ten people happy, who will go to the cocktail
parties and flash it around and mention my name. So instead of
selling one person a $2K piece at key, yielding a thousand profit,
I’ve sold ten people for a profit of $5K. To me, at this stage of my
career, bottom line is hard to argue with.

This was driven home to me when I had to run a GOB(going out of
business) sale. My building was to be torn down to build a bank. No
wonder my landlord wouldn’t renew my lease. Available retail space
was non existant at that time, no room at the inn. So I would need
cash and plenty of it to tide me over. I did a year’s volume in three
months by discounting. I’ll tell you this, the cash I had at the end
of it was much more than if I had tried to just sell down at full
price, even after clearing up my accounts payable. A sale like that
is not long term sustainable, but it taught me some lessons about
customer motivation and demeanor, the value of turnover, and that
profit is a time related concept.

Ideally one could sell their entire inventory at full price. But how
long does that take? One year, Two? Condense that time frame and it
equates to more profit per month.

This business has as many ways to make a living as there are people
in it. What’s good for one may not work for another. Anyone reading
this, please take it with a spoonfull of salt.

Gee, all I did was sit down with my coffee and morning Orchid and I
ran off at the mouth, Sorry.

6 
That day, I would have taken a thousand dollars

If you have your merchandise priced high and expect your customers to
haggle with you to get a fair price they will learn the need to
haggle with you every time. That’s why I never liked the 50% off
sales many companies run.

You created your own monster in this case.

Mark

7

Neil and Daniel,

I would LOVE IT if ten people came in to buy at a discount.

Different business approaches work for different types of
businesses.

If you read the trade mags, there are stores that never have and
never will have a sale. This does not mean they won’t discount an
item to move it. I have mentioned that I had a mall store and how
that type of retail customer expects a big mark down, and regardless
of the fact that they are fooled by high mark ups and big discounts
they end up paying triple key. I have my pride, and over the years,
marking pieces at a fair price, lower than dept. store prices and
lower than the jewelry stores in the large centralized retail part of
Denver where rent is high and prices are also, I felt insulted over
and over by the haggling. Sad truth is, arrived at by my wife and I
separately (over 15 years of retail) for the different jobs we do,
for inventory items mark the pieces up 10-20% over what you want. If
there is serious interest, and sometimes I ask “would it help if I
gave you a discount”, but don’t mention how much, if they say yes,
give them 10%. If they still balk, say how about 20%. Probably 80% of
my women customers pay full price and do not try to negotiate the
price. If I have a customer that seems really interested in a piece
and I cannot get them to commit, first I tell them we have layaway.
20% down, 20% a month for 4 months to pay it off. I do not like to
discount, but I have run into the problem so many times over the
years, if someone is interested in a piece, really interested but
will not put it on layaway, 90% of the time, if I offer a 10%
discount, that will make the sale probably 80% of the time, and they
won’t do a layaway, they want/need the instant gratification. I do
not let them do a layaway with a discount unless it is something that
has had a birthday or two and I want to make it go away. This also
works if someone is looking at two pieces and cannot make up their
mind. I will ask if 10% off will help, sometimes I go 20%. These
pieces are usually sterling, but I have done it with gold also. These
are sterling pieces that are over $100, gold over $300. Sometimes I
need to close them or move them on so I am not wasting my time. One
way to look at it is not as discounting, but you are negotiating.
They want the item, you want the money, and you are trying to meet at
a point where your time is worth the effort of the sale. In Las Vegas
for a JCK show, we went to Fred Leyton Jewelers. Fred supplies the
movie stars with jewels for the Academy Awards. We saw the most
incredible, awesome, stunning and unbelievable gorgeous jewelry
encrusted with the most incredible, awesome stunning Our
friend tried on a necklace that was $80,000. The sales person left
our friend, still wearing the piece, and came back a moment later and
informed us that Mr. Leyton (we never saw him), advised her that he
could let it go for $60,000.

Richard Hart

8

Craig

that's interesting, although why do they think they can haggle in
the first place??

Apparently it’s a cultural thing. In some cultures it is the thing
to do. The merchant thinks you’re an idiot if you pay the first price
he asks. It’s a game. He sets a price, you set a lower one. Then you
go back and forth and see where you can meet. Haggling was a
relatively uncommon practice in the US until we became a third-world
country. Now anything goes. (sorry if I sound bitter)

Dee

9

I just thought I’d relate a recent experience… I sell my work at
craft and gem shows. I do not discount. I work hard to properly price
my work so that I can feel comfortable that my customers are
receiving a good value for their money. I call that a win - win for
both of us. I was exhibiting at a relatively high end show last
month. A very nice lady came and tried on an imperial topaz ring in
rose and yellow gold, a one of a kind item. I quoted the price, she
asked if that was my best price and I said, yes it is. She was very
pleasant and moved on. Later that day a couple came to the booth and
were interested in a large matched pair of natural canary diamonds,
unset. The husband began badgering me about the price, which was
extremely low to begin with. He kept insisting that I had “room” to
work with him, and wanted at least 20% off. I finally said, as
pleasantly as I could, “My prices are more than fair. If you would
like, you can go get a coffee and I’ll mark the price up another 50
percent. Then you can come back and get your discount if that will
make you happy”. He badgered me some more and they finally left after
about 15 more minutes. Then the lady who wanted the imperial topaz
ring came back and bought it. I was by myself in a 20 foot booth and
did not realize she had been standing there the whole time! She also
told me that she thought those people were very rude. Now how would I
have made her feel if I had given in to them and she had witnessed
it? And, funniest part, the following day, the wife came back and
bought the diamonds herself at the asking price, and additionally
placed a significant order, paid in full in advance for the custom
earring design that I shipped to her last week. Her phone call to me
confirming the safe arrival of her earrings was effusive and
friendly, to say the least. My feeling is, price things fairly to
begin with, stand behind your pricing, and don’t let anyone push you
around.

Just my 2 cents!

Peggy
OBX, NC

10 
You created your own monster in this case If you have your
merchandise priced high and expect your customers to haggle with
you to get a fair price

I don’t consider dealing with customers as an adversarial
relationship. I also don’t consider key or key plus 10 as
unreasonably high markup. Maybe some do. My original intention was
to present a humorous way of dealing with the rare obnoxious
customer. Hey, they exist. I guess the humor was missed. And I guess
I didn’t convey completely that this customer was unique and the
haggling was neither invited nor welcomed by me. I’ll be certain to
word things to avoid misunderstanding. But it may mean I get even
more long winded. :stuck_out_tongue: Self-deprecating humor there.

11

This also fits with Jewelry “Friends”. When asked for my best price,
the quick answer, and it usually gets a smile, is “the only person
that gets a discount is my Mom”. That stops them, the relatives know
that is the answer, and Mom doesn’t buy jewelry. Don’t ask me about
the set of sterling napkin rings set with different colored ambers
that I made for Mom for $25 for a set of four. It’s Mom, 'nuff said.
She thought that was a lot for napkin rings.

Judy Hoch

12

Dear Dee,

Actually, haggling was standard in the U.S. until John Wanamaker
opened Wanamaker’s Department Store in Philadelphia in 1861 with the
remarkable premise that all goods would have prices marked on them
and that there would be no bargaining. Until then stores had sales
clerks set prices themselves after they had first sized up the
customer and then being bargaining.

And, of course, bargaining is still standard in the auto industry.

And some people – probably those who think they got a bargain —
actually enjoy it.

Michael Knight

13

Hi

Haggling can be frustrating and time consuming…

I hear Americans whine about this quite a bit as if we never ever
haggle. However, what about buying a car? Or a house? Been to Tucson
for the gem show?!

The appropriate place and time is the thing. After all, we do not
haggle in the drive through lane at the fast food place, or the
supermarket.

Collectors (baseball cards, to fine art) haggle with real finesse, as
do diamond dealers. Is this REALLY such a “foreign” concept? Not
really. From the old west pioneer days of horse trading Americans
can, did, and do haggle.

14

Hello,

I’ve been staying out of this one because I’m not in “the biz” so I
can afford to think and anything I want about how to run a business
without risking any consequences if I’m wrong.

With that said and with all due respect to those still in the throes
of making their daily bread - very much respect indeed - I thought
I’d put in 2 cents worth.

First, I just wanted to support Daniel Ballard and some of the
others who dispute the idea that there is something un-American,
foreign, or low-class about haggling. I have always been
uncomfortable with that notion, especially as I have heard it most
often put forward as some kind of declaration of superiority over (A)
foreigners, (B) Low class types, © Poor folks etc etc. It is in the
same league as Sir Thomas Lipton’s quip that " if you have to ask the
price of a yacht then you can’t afford one." In other words - the
only socially acceptable status is to be wealthy enough that you
never have to say no to any purchase or gratification. Acceptance of
this crazed propaganda into their own attitudes is what gets so many
folks bankrupt as they max out their usurious credit cards,
over-mortgage the roof over their kids’ heads, and generally try to
fool the world and themselves into thinking they are Sir Thomas
Lipton.

Second, Haggling can just as easily be entered into by the seller as
by the customer. I knew a jeweller about 40 years ago who made a fine
enough living and had a good time at it too. His prices were marked
on his wares but that was just a starting point. He had another
factor to weigh in his behaviour towards customers. He liked them or
he didn’t like them and immediately changed the written price on the
spot in accordance with his personal instant reaction. A favourite
tactic of his, if he felt someone was just trying to “beat” him out
of a few dollars was to offer to flip a coin for "double or nothing."
This scared off a few time-wasters and other times it cost Herman a
few dollars or made him a few dollars. In the end, as I said, he made
a good enough living and, as I also said, HE HAD A GOOD TIME - which
is the real point of what I learned from Herman. I mean what are we
here for?

Marty Hykin in Victoria BC where the weather is a sketch these days.

15

When I used to work for the computer company with the cow spotted
box I got a hotmail address and I still use it.

I say to the customer (this is in a retail environment, still
computers)

“If you want a discount email me, my address is
heartlesscowathotmail.com” then smile.

People often ask if it is cheaper for cash, I explain that we hate
counting cash, we’d rather have cards

alison
www.alialexander.com.au

16

Hi Nell,

Thanks for your note, and I do understand the frustration caused by
the relentless haggler/pain in the tail.

A couple of things I have said, either at a retail store I had back
when, or at the office located in “Haggling Central” Los Angeles.

A prospective buyer says “give me a good price”, I say good for who?
90% of the time that brings laughter or at least a smile and the game
is on, with a friendly twist. I then offer a “fair” price. “Good for
both of us, fair to all of us”.

My other tactic is a wholesale one- “Volume discounts are
encouraged” and the lowest price assumed payment TODAY.

Retail is another show entirely, and the time tested turn over can
spread the pain of the haggle, and disrupt the game plan of the heavy
discount seeking customer.

The season is upon us, Happy Thanksgiving to those who celebrate the
occasion.

17

In a past incarnation I had a fellow come into the store. He was fast
talking and looking at everything. He finally found a bracelet that
he though he liked. It was $250. He leans over the case and says, “I
just know you can do a better price I am sure”. I said, “Let me think
a second… yes, how about $350”? He puffs himself up, cusses me,
and slams the door on his way out. I have never seen anyone slam a
door with an automatic door closer before or since.

Also would get the,“Is it less if I pay cash”? “No, it takes too much
time to verify your IDs”. The confused looks were worth it. I am
still mystified that I was never called out on that one.

Bill Churlik
www.earthspeakarts.com

18 
A prospective buyer says "give me a good price", I say good for
who? 90% of the time that brings laughter or at least a smile and
the game is on, with a friendly twist. I then offer a "fair" price.
"Good for both of us, fair to all of us".

I have on occasion, when asked for a better price, raised the price
by $10. It was immediately understood. It was a better price, for
me. Usually it’s men, and that ends their attempts. There are people
who ask for a better price for a $29 item. I have told people that
this is not a a swap meet or a garage sale. I tell them we have
prices that already are at a low price and we would like to stay in
business. Sometimes I mention that many women tell us how good our
prices are, as that is the truth. I sometimes mention that it would
be hard for them to find another store with the quality, selection,
and price that we have. Gently point out the value I have that they
are not recognizing. In the evening we get people who are customers
of a restaurant (expensive) across the street. They are considering
buying something usually under a $100, pondering, and then I ask if
they had dinner at the restaurant. They said they did, and tell them
that their dinner cost more than the piece of jewelry they are
looking at, tomorrow you will have the jewelry and you know where you
will put that dinner. Always gets a laugh, usually gets a sale.

Richard Hart