Tell HN: Four (hopefully) unique and useful start-up tips
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I, too, negotiate everything. You would be surprised at how much wiggle room there is at a national retailer like Best Buy for big-ticket items.
Here are some ground rules and the steps I use to haggle: Haggling works better if you can pay in cash. Know how much you are willing to spend and do not exceed it! Never, ever reveal to the salesperson how much you are willing to spend.
1. Express a casual and not too focused interest in the item (HDTV is a perfect example).
2. Show that you understand the product and are in the market for a new television.
3. Mention how the store's competitors and the internet are making it easier to price compare.
4. Ask if there are any specials on your particular model (are they throwing in a Blu-ray player? Free DVDs? Sales price that doesn't go into effect until the weekend?).
5. Let the salesperson know that the currently advertised price is more than your are willing to spend and ask him/her if there is anything they can do to bring the price down. If they ask what you price you would like to see then give them a number below your predefined maximum spending limit. It's up to you to gauge how much lower, and you will find that after time this number gets to be farther and farther from your max limit the comfortable you get at negotiating.
6. Make the deal at this price, or continue to haggle until you've crossed your limit and are ready to leave.
7. If you don't make the deal, you have four options:
Here are some ground rules and the steps I use to haggle: Haggling works better if you can pay in cash. Know how much you are willing to spend and do not exceed it! Never, ever reveal to the salesperson how much you are willing to spend.
1. Express a casual and not too focused interest in the item (HDTV is a perfect example).
2. Show that you understand the product and are in the market for a new television.
3. Mention how the store's competitors and the internet are making it easier to price compare.
4. Ask if there are any specials on your particular model (are they throwing in a Blu-ray player? Free DVDs? Sales price that doesn't go into effect until the weekend?).
5. Let the salesperson know that the currently advertised price is more than your are willing to spend and ask him/her if there is anything they can do to bring the price down. If they ask what you price you would like to see then give them a number below your predefined maximum spending limit. It's up to you to gauge how much lower, and you will find that after time this number gets to be farther and farther from your max limit the comfortable you get at negotiating.
6. Make the deal at this price, or continue to haggle until you've crossed your limit and are ready to leave.
7. If you don't make the deal, you have four options:
You can go back tomorrow and try with a different sales person
You can head to a different store and try again.
You can raise your max spending limit (not recommended).
You can decide that you really didn't need the product anyway.
Internet prices and retail is actually something I have been thinking about recently. Someone, please help me with the economics.
What if a retail store offered great advice and let you order online so you get the best Internet price?
One reason why I almost never visit a retail store anymore is because the best deal is always online.
So rather than take it as a challenge for retail, embrace it. Can one build a retail business that relies on ordering stuff from the cheapest online retailers?
I can think of the obvious reasons why not. But if you think creatively, wouldn't that make sense? Even the cheapest online retailers offer some kind of referral compensation. There may be other ways to make money than making a profit on the big ticket item that your visitor came in to order...
What if a retail store offered great advice and let you order online so you get the best Internet price?
One reason why I almost never visit a retail store anymore is because the best deal is always online.
So rather than take it as a challenge for retail, embrace it. Can one build a retail business that relies on ordering stuff from the cheapest online retailers?
I can think of the obvious reasons why not. But if you think creatively, wouldn't that make sense? Even the cheapest online retailers offer some kind of referral compensation. There may be other ways to make money than making a profit on the big ticket item that your visitor came in to order...
Amazon affiliate revenues go up to 9%. I'm sure you could negotiate something similar with other providers.
Possibly you could offer people an guided Internet shopping experience in the mall - people come in and, with the help of an 'Internet shopping expert', buy things at Internet prices for later delivery. As you suggest you could monetize by collecting the affiliate commission.
If running a kiosk in a small mall cost you $20,000 a month (?) you would need to persuade people to buy ~1,000 $200 TVs a month.
The biggest barrier I can see would be overcoming the hostility from the other stores who would be really keen to kick you out once they spotted what you were doing. Because they occupy more square feet I'm sure mall management would oblige.
Possibly you could offer people an guided Internet shopping experience in the mall - people come in and, with the help of an 'Internet shopping expert', buy things at Internet prices for later delivery. As you suggest you could monetize by collecting the affiliate commission.
If running a kiosk in a small mall cost you $20,000 a month (?) you would need to persuade people to buy ~1,000 $200 TVs a month.
The biggest barrier I can see would be overcoming the hostility from the other stores who would be really keen to kick you out once they spotted what you were doing. Because they occupy more square feet I'm sure mall management would oblige.
The biggest barrier I can see would be overcoming the hostility from the other stores
If that's the only problem, you could just open your retail store outside a mall, where no one can bother you.
Think El Camino in Silicon Valley. If you have the best value (unbeatable price and good service), you should have a winner, right?
If that's the only problem, you could just open your retail store outside a mall, where no one can bother you.
Think El Camino in Silicon Valley. If you have the best value (unbeatable price and good service), you should have a winner, right?
What you would need to do is start a retail store that either:
A) Sold the product at a price competitive to the online retailers (competitive can mean price or value-add services like knowledgeable salespeople, free delivery, etc.)
or
B) Provided great advice, directed a customer to the cheapest internet price and then had a value-add service. The store would then get paid via the internet store from which the item was purchased. The problem with this approach is that after time it would be beneficial (in the short term) for the retail store to direct customers to whichever online store gave the retail store the best kick back.
A) Sold the product at a price competitive to the online retailers (competitive can mean price or value-add services like knowledgeable salespeople, free delivery, etc.)
or
B) Provided great advice, directed a customer to the cheapest internet price and then had a value-add service. The store would then get paid via the internet store from which the item was purchased. The problem with this approach is that after time it would be beneficial (in the short term) for the retail store to direct customers to whichever online store gave the retail store the best kick back.
Is it truly beneficial to negotiate everything? What about peace of mind?
Negotiation sometimes does not justify the time invested in it. It is also an extra something to occupy space in your consciousness. It might blind you to other considerations, not price-oriented.
That said, a healthy chutzpa is indeed an important skill many people lack.
Negotiation sometimes does not justify the time invested in it. It is also an extra something to occupy space in your consciousness. It might blind you to other considerations, not price-oriented.
That said, a healthy chutzpa is indeed an important skill many people lack.
It can be turned into a fun hobby where you can also learn a lot about people interaction.
BATNA - Best Alternative To Negotiated Agreement. If you subtly imply that you can walk away and buy elsewhere, then you can talk them down. You lose a bit of time, they lose their commission. If you know what their commission would be (or you can make an educated guess), you can talk them down a long way.
But if you behave as though you must buy there, they have no reason to drop the price.
But if you behave as though you must buy there, they have no reason to drop the price.
Start checking your stats only once a day, at most.
That way, you’ll be alerted to any potentially significant
changes (i.e. your ecommerce engine is down)
True story I heard from some Amazon engineers.
Amazon doesn't (directly) monitor whether their servers are up. They just look at the revenue graph in real-time, and if there's a noticeable dip, something's wrong.
Amazon doesn't (directly) monitor whether their servers are up. They just look at the revenue graph in real-time, and if there's a noticeable dip, something's wrong.
Right, although they don't have to manually look at this -- they have many sophisticated monitors in place that immediately notify engineers if things are not in normal ranges.
> Monitoring should be in place to achieve this.
For uptime monitoring, I recommend site24x7.com. Excellent, reliable service. I tried alternatives, including Pingdom, and they were rather disappointing.
For uptime monitoring, I recommend site24x7.com. Excellent, reliable service. I tried alternatives, including Pingdom, and they were rather disappointing.
== 2. Negotiate everything ==
I've found this to be a very much cultural thing. Bargaining / haggling is quite common in Asian cultures. Since I'm originally from India, I initially was surprised to find that haggling is not an acceptable thing in the american society.
That hasnt stopped me from my efforts at haggling one bit.
My latest conquest - a free shield and case for my iphone when bestbuy made me wait for about 45 minutes to get a new connection. Even before starting with the process, I made it clear that I want freebies thrown in - else,I'll simply take my business elsewhere.
I've found this to be a very much cultural thing. Bargaining / haggling is quite common in Asian cultures. Since I'm originally from India, I initially was surprised to find that haggling is not an acceptable thing in the american society.
That hasnt stopped me from my efforts at haggling one bit.
My latest conquest - a free shield and case for my iphone when bestbuy made me wait for about 45 minutes to get a new connection. Even before starting with the process, I made it clear that I want freebies thrown in - else,I'll simply take my business elsewhere.
Heh, I can imagine that it must have been a shock! I've been traveling through India for the last few months and at first I had a really hard time haggling.
Westerners feel guilty and have all kinds of emotions fixed to this process, while it's commonplace in India. I think Indians have a big advantage in that aspect.
BTW: I love your country and GJ on the shield case :)
Westerners feel guilty and have all kinds of emotions fixed to this process, while it's commonplace in India. I think Indians have a big advantage in that aspect.
BTW: I love your country and GJ on the shield case :)
This is awesome. I'd love a small conversation thread about how to find openings to negotiate things; I'm getting adequate at negotiating when negotiation is expected (like in professional services), but I suck everywhere else.
Here is a simple example.
You know at an amusement park how they take your picture, print it out, then try to sell it to you at a ridiculous price? I have a friend who always says, "So what do you do if I don't buy, just throw it out?" "Yes." "I'll give you $5 for it."
He says that if he gets the owner he usually gets the photo for that. If he gets the employee he usually doesn't.
You know at an amusement park how they take your picture, print it out, then try to sell it to you at a ridiculous price? I have a friend who always says, "So what do you do if I don't buy, just throw it out?" "Yes." "I'll give you $5 for it."
He says that if he gets the owner he usually gets the photo for that. If he gets the employee he usually doesn't.
They do that digitally at the places I've been lately. So, there's nothing to throw out, anymore.
> I'd love a small conversation thread about how to find openings to negotiate things
Try: "I'm interested, but the price is higher than I want to spend. What's the best offer you can make me?"
Try: "I'm interested, but the price is higher than I want to spend. What's the best offer you can make me?"
There are tons of polite openings to negotiation:
"Is there room on the price?"
"Do you have any offers on this item?"
"What's your best price on that?" One time a mattress salesman responded sarcastically with, "The one on the tag." So, I said, "Thanks." and turned to leave. He called me back immediately with a lower price. I still left and bought at Costco, instead, since the price was dramatically lower even without negotiation, and I don't like snarky pushy sales people.
Another mattress guy once challenged me with, "Are you going to shop around more once I tell you our best price?" And my reply to that was, "Of course." And he said, "So why should I tell you our best price now...come back once you've gotten prices from the rest of the stores you're going to talk to, and I'll try to beat it." My reply to that, of course, was, "If you don't give me a price better than what I'm seeing on the tag before I walk out that door, you will never see me again." He, too, offered a lower price. The lesson in this is that salesmen tend to understand that the only person who can really say "yes" to the deal is the customer, and they've only got one shot at that yes. They do a lot to try to avoid having the customer frame it in those terms, because it's a powerful position to be in. You need one item while they need many sales each day, and you're one possible sale.
If those lines are still too confrontational, just say, "I really like this one, but I'm afraid it's out of my price range..." and let it hang. Most people can't stand silence, so if you give it 30 seconds, they'll probably come back with a better price. Higher end negotiators will know that speaking first when it comes to points of the deal nearly always gets you into trouble, but sales guys at Best Buy almost certainly do not (some sales guys are instinctively really good at grasping human nature, and know this stuff without being told). Car salesmen generally know these things, so you have to be particularly vigilant when dealing with car dealers.
A few valuable things I've learned from growing up at flea markets and garage sales (my mom is an antiques and collectibles dealer, and I was her muscle when I lived at home):
- No object you're shopping for is precious or unique. Do not get attached to specific items. There are many more just like it or better, in other places, and other times. View it as something you will someday throw away or donate to Goodwill, and you can view it more rationally. That beautiful iPod? In five years it will be trash, and in three you'll probably replace it anyway. In short, always be ready to walk away from any deal.
- The deal of a lifetime comes around about once a month. If you're being pressured to buy right away, it probably means buying now is better for the vendor than for you. You should think it over. Reject aggressive time pressure and exploding offers without even thinking about it; if a salesperson insists you buy today to get a specific price, it's likely another store has the item for cheaper and he doesn't want you to price compare. Regardless, you are at a severe disadvantage if you allow the salesperson to set your schedule for buying. You can turn that around, however, with, "If I can get this for $X, I will buy right now." Salesguys really believe in "bird in hand is worth two in the bush", and will do a lot to get you to hand over your money right now.
- Know what you're buying and what you want to pay for it. Knowledge is the most valuable thing you have in a negotiation. Keep as much of the advantage on knowledge as possible to yourself. If you know you can't order online because you need an item right now, never say that to the sales person. As far as they are concerned, you might buy today, or you might buy next month (until you need to use the "I will buy today at X price" gambit), or you might not buy at all. Corollary to that, however, is the fact that good sales guys can smell money and a willingness to spend it. They may not take you seriously, if they think you're just being a lookie-loo, and won't give you their best price without the hope of getting your money today. Don't feel bad about the knowledge advantages you have...they have more such advantages on their side. They know the wholesale price, all available offers, whether it will be on sale on the weekend, etc.
"Is there room on the price?"
"Do you have any offers on this item?"
"What's your best price on that?" One time a mattress salesman responded sarcastically with, "The one on the tag." So, I said, "Thanks." and turned to leave. He called me back immediately with a lower price. I still left and bought at Costco, instead, since the price was dramatically lower even without negotiation, and I don't like snarky pushy sales people.
Another mattress guy once challenged me with, "Are you going to shop around more once I tell you our best price?" And my reply to that was, "Of course." And he said, "So why should I tell you our best price now...come back once you've gotten prices from the rest of the stores you're going to talk to, and I'll try to beat it." My reply to that, of course, was, "If you don't give me a price better than what I'm seeing on the tag before I walk out that door, you will never see me again." He, too, offered a lower price. The lesson in this is that salesmen tend to understand that the only person who can really say "yes" to the deal is the customer, and they've only got one shot at that yes. They do a lot to try to avoid having the customer frame it in those terms, because it's a powerful position to be in. You need one item while they need many sales each day, and you're one possible sale.
If those lines are still too confrontational, just say, "I really like this one, but I'm afraid it's out of my price range..." and let it hang. Most people can't stand silence, so if you give it 30 seconds, they'll probably come back with a better price. Higher end negotiators will know that speaking first when it comes to points of the deal nearly always gets you into trouble, but sales guys at Best Buy almost certainly do not (some sales guys are instinctively really good at grasping human nature, and know this stuff without being told). Car salesmen generally know these things, so you have to be particularly vigilant when dealing with car dealers.
A few valuable things I've learned from growing up at flea markets and garage sales (my mom is an antiques and collectibles dealer, and I was her muscle when I lived at home):
- No object you're shopping for is precious or unique. Do not get attached to specific items. There are many more just like it or better, in other places, and other times. View it as something you will someday throw away or donate to Goodwill, and you can view it more rationally. That beautiful iPod? In five years it will be trash, and in three you'll probably replace it anyway. In short, always be ready to walk away from any deal.
- The deal of a lifetime comes around about once a month. If you're being pressured to buy right away, it probably means buying now is better for the vendor than for you. You should think it over. Reject aggressive time pressure and exploding offers without even thinking about it; if a salesperson insists you buy today to get a specific price, it's likely another store has the item for cheaper and he doesn't want you to price compare. Regardless, you are at a severe disadvantage if you allow the salesperson to set your schedule for buying. You can turn that around, however, with, "If I can get this for $X, I will buy right now." Salesguys really believe in "bird in hand is worth two in the bush", and will do a lot to get you to hand over your money right now.
- Know what you're buying and what you want to pay for it. Knowledge is the most valuable thing you have in a negotiation. Keep as much of the advantage on knowledge as possible to yourself. If you know you can't order online because you need an item right now, never say that to the sales person. As far as they are concerned, you might buy today, or you might buy next month (until you need to use the "I will buy today at X price" gambit), or you might not buy at all. Corollary to that, however, is the fact that good sales guys can smell money and a willingness to spend it. They may not take you seriously, if they think you're just being a lookie-loo, and won't give you their best price without the hope of getting your money today. Don't feel bad about the knowledge advantages you have...they have more such advantages on their side. They know the wholesale price, all available offers, whether it will be on sale on the weekend, etc.
Two thoughts:
* It seems like it's too easy to just object "sorry, that's the price" to "is there room on the price"; I wonder if there's a wording to this objection that gets better immediate responses.
* I thought mattresses were notorious for total BS pricing and dealer shenanigans.
* It seems like it's too easy to just object "sorry, that's the price" to "is there room on the price"; I wonder if there's a wording to this objection that gets better immediate responses.
* I thought mattresses were notorious for total BS pricing and dealer shenanigans.
It seems like it's too easy to just object "sorry, that's the price" to "is there room on the price"
Sure, some places and people just won't negotiate. But, I think you'd be surprised by how rarely this doesn't work.
And, worst case, if you really need the item, you pay full price and you're no worse off than if you didn't ask for a better deal. They aren't going to raise the price.
The best response to any kind of "no" is to walk away. You can say, "Oh, that's a shame. I sure wish I could afford it. Maybe another time. Thanks." if you want to be nice about it, and give them one more chance to think of some way to give you a better deal.
But, as with talking to girls, the first thing you say to open the negotiation is not really all that important, it's just indicating interest without committing to anything. It's where you go from there and how you react as the negotiation proceeds that determines how things end up.
And, yes, mattress salesmen are among the worst people I've ever met in my life, with regard to lack of honesty, predatory sales tactics, etc. Being largely immune to said tactics, I infuriated a couple of mattress sales guys on my last mattress shopping adventure by turning things around and not being at all fazed by their aggressive techniques. They're at least as bad as used car salesmen. I've been surprised to note that the RV sales people I've been dealing with are almost universally low pressure, easy going, forthright, and decent folks. It seems strange that such closely related industries would have such vastly different people gravitating to them.
Sure, some places and people just won't negotiate. But, I think you'd be surprised by how rarely this doesn't work.
And, worst case, if you really need the item, you pay full price and you're no worse off than if you didn't ask for a better deal. They aren't going to raise the price.
The best response to any kind of "no" is to walk away. You can say, "Oh, that's a shame. I sure wish I could afford it. Maybe another time. Thanks." if you want to be nice about it, and give them one more chance to think of some way to give you a better deal.
But, as with talking to girls, the first thing you say to open the negotiation is not really all that important, it's just indicating interest without committing to anything. It's where you go from there and how you react as the negotiation proceeds that determines how things end up.
And, yes, mattress salesmen are among the worst people I've ever met in my life, with regard to lack of honesty, predatory sales tactics, etc. Being largely immune to said tactics, I infuriated a couple of mattress sales guys on my last mattress shopping adventure by turning things around and not being at all fazed by their aggressive techniques. They're at least as bad as used car salesmen. I've been surprised to note that the RV sales people I've been dealing with are almost universally low pressure, easy going, forthright, and decent folks. It seems strange that such closely related industries would have such vastly different people gravitating to them.
<i>
No object you're shopping for is precious or unique. Do not get attached to specific items. There are many more just like it or better, in other places, and other times. View it as something you will someday throw away or donate to Goodwill, and you can view it more rationally. That beautiful iPod? In five years it will be trash, and in three you'll probably replace it anyway. In short, always be ready to walk away from any deal.
</i>
I'm sorry but I tend to disagree - having the right product' at the 'right time' does make a difference. Sure ipod will be a trash in 5 years, but you sure wouldnt want to go looking to buy a walkman when ipods are in vogue.
I'm sorry but I tend to disagree - having the right product' at the 'right time' does make a difference. Sure ipod will be a trash in 5 years, but you sure wouldnt want to go looking to buy a walkman when ipods are in vogue.
OK, if you must have a specific item or service today, then your bargaining power is significantly reduced. Your BATNA (best alternative to a negotiated agreement) is to pay full price from the specific person you're talking to. If your seller detects that through your words or actions, you will always pay full price.
I'm saying that being able to walk away (even if you don't) is your most powerful piece of negotiating leverage. If you go into a negotiation without the ability to walk away, you're in a very weak position, indeed.
I'm saying that being able to walk away (even if you don't) is your most powerful piece of negotiating leverage. If you go into a negotiation without the ability to walk away, you're in a very weak position, indeed.
[deleted]
Negotiate everything - Agreed. Would the OP have any tips on how one would know how to approach this? Pointers to books/articles welcome.
I have had the privilege of growing up with a master negotiator (my father) who has built a small real estate empire over the last 25 years. He negotiates for everything he touches and here is the advice he always gave me and my older brother (which has served us very well):
a) try to understand the costs associated with the product/service you are buying as much as possible before you make an offer. in other words, assume a reasonable price someone is putting on their labor and try to quickly estimate to the total cost of materials. if the price they are quoting is out of line, your job is to put them in line. a notorious industry for this is plumbing and electrical work. plumbers try to get away with murder, often charging what equates to $400 an hour for work on top of material cost. $400 is unreasonably by any measure and you'll find that they agree too when you push them hard enough.
b) never, ever pay more for something than what it's really worth to you. this seems a bit silly and self evident but you'll be surprised how often people violate this rule. this requires a bit of self reflection.
c) the most serious buyers are the ones who ask a lot of questions. ask questions and you'll be taken seriously. it will also help you understand them and where they are coming from.
d) regardless of whatever they may try to make you think or believe, if you have the money, you have the power. period.
e) most important rule of all, never be ashamed of your offer and take it very seriously. they'll take it seriously too and it will force them to reflect hard on their offer. As shakespeare said, all the world's a stage and all the men and women merely players
a) try to understand the costs associated with the product/service you are buying as much as possible before you make an offer. in other words, assume a reasonable price someone is putting on their labor and try to quickly estimate to the total cost of materials. if the price they are quoting is out of line, your job is to put them in line. a notorious industry for this is plumbing and electrical work. plumbers try to get away with murder, often charging what equates to $400 an hour for work on top of material cost. $400 is unreasonably by any measure and you'll find that they agree too when you push them hard enough.
b) never, ever pay more for something than what it's really worth to you. this seems a bit silly and self evident but you'll be surprised how often people violate this rule. this requires a bit of self reflection.
c) the most serious buyers are the ones who ask a lot of questions. ask questions and you'll be taken seriously. it will also help you understand them and where they are coming from.
d) regardless of whatever they may try to make you think or believe, if you have the money, you have the power. period.
e) most important rule of all, never be ashamed of your offer and take it very seriously. they'll take it seriously too and it will force them to reflect hard on their offer. As shakespeare said, all the world's a stage and all the men and women merely players
A lot of it just takes experience and practice. There are a few good books available. "The Knack" by Norm Brodsky is very good, and the source of the "You don't ask, you don't get quote". The chapter on negotiation is small, but the rest of the book contains tons of invaluable insight.
Many books stress formulating a "win-win" situation, and "expanding the pie" so that "everybody wins". This is good in theory, but rare in practice. In almost every negotiation someone will have the upper hand.
I think the best approach is to listen carefully and try to understand the other party's need. This may not necessarily be more money. Maybe they want to build a long term relationship. Maybe they are willing to lower the price if you pay upfront, or provide a larger deposit, because they prefer the cashflow now. Maybe business is slow. You never know.
You also need to know your best alternative. If you have options, it is easy to walk away from the deal. If you are informed, you will know the true market price. You can't be afraid to walk away. I think it just takes time and practice to develop this mentality, and the opposing side can typically sense if you're serious about it or not.
A strategy that has worked well for me is to just say something like "I really like your product/service, and would love to start using it, but the price is a bit out of my range. Is there any way you can give me a discount?". It doesn't work for everything, but I've been surprised how often it does work. The worst thing that happens is that they say no. Remember, you have to ask!
Many books stress formulating a "win-win" situation, and "expanding the pie" so that "everybody wins". This is good in theory, but rare in practice. In almost every negotiation someone will have the upper hand.
I think the best approach is to listen carefully and try to understand the other party's need. This may not necessarily be more money. Maybe they want to build a long term relationship. Maybe they are willing to lower the price if you pay upfront, or provide a larger deposit, because they prefer the cashflow now. Maybe business is slow. You never know.
You also need to know your best alternative. If you have options, it is easy to walk away from the deal. If you are informed, you will know the true market price. You can't be afraid to walk away. I think it just takes time and practice to develop this mentality, and the opposing side can typically sense if you're serious about it or not.
A strategy that has worked well for me is to just say something like "I really like your product/service, and would love to start using it, but the price is a bit out of my range. Is there any way you can give me a discount?". It doesn't work for everything, but I've been surprised how often it does work. The worst thing that happens is that they say no. Remember, you have to ask!
Strong second recommendation on "The Knack", even though I didn't get much negotiating help out of it.
One way that taught me a lot. Go to a third world country and just for fun, negotiate retail items (baseball cap, tshirt, whatever). Shoot for 80% off. Can you do it? Then go for 90% off...
You'll quickly learn that you have two weapons: money in your pocket that the other guy wants, and the ability to walk away if you don't like the deal.
Everything else is fluff.
PS: another way to practice is go through timeshare presentations. Keep saying no. You'll be amazed how low the prices can get. You'll be handled by 2,3 or 4 different sales people, each with supposedly more authority and better deals to offer you. Keep saying no. You'll see :-)
You'll quickly learn that you have two weapons: money in your pocket that the other guy wants, and the ability to walk away if you don't like the deal.
Everything else is fluff.
PS: another way to practice is go through timeshare presentations. Keep saying no. You'll be amazed how low the prices can get. You'll be handled by 2,3 or 4 different sales people, each with supposedly more authority and better deals to offer you. Keep saying no. You'll see :-)
In Manhattan's Chinatown, my wife would sometimes pick up an item and lay down the cash she thought it was worth (lower than the listed price, of course).
They never wanted her to pick that money back up again.
They never wanted her to pick that money back up again.
Probably the only opening I know of for negotiating "normal" stuff is, "how much of a discount would we get for a long-term commitment, say, a year up front".
But in this case, you've already sequestered yourself into a one year commitment, and the other person has conceded nothing. If I know you're available to commit, I just need to find your discount level. You're going to underestimate my acquisition costs, I can guarantee that.
Better to suggest: "I really like your product here, but to be frank, I've got to watch my money right now. Is there a way you can reduce this price 20% and still do business with me?"
The catch is that some people will most certainly say no. You either deal with them and reward their stubbornness or walk to someone that is willing to talk. I think that's more of the key than an opening line.
Better to suggest: "I really like your product here, but to be frank, I've got to watch my money right now. Is there a way you can reduce this price 20% and still do business with me?"
The catch is that some people will most certainly say no. You either deal with them and reward their stubbornness or walk to someone that is willing to talk. I think that's more of the key than an opening line.
You're right, of course, but a lot of people who aren't flexible on price are flexible on payment or delivery terms, so I guess I'm just saying pull whatever levers you can find.
But this is an example of how much I suck at day to day negotiation.
But this is an example of how much I suck at day to day negotiation.
Definite resonates! What's your startup?
Naturally this will bring up facebook, google etc. who may not have focused on business model for a while. Like Steve Blank said in one of his talks, if you think you've a google/facebook on your hand, ignore every rule and good luck:)
If you don’t have a proven business model,
you need to make figuring it out your NUMBER ONE priority.
Naturally this will bring up facebook, google etc. who may not have focused on business model for a while. Like Steve Blank said in one of his talks, if you think you've a google/facebook on your hand, ignore every rule and good luck:)
Google is an exception.
Facebook is possibly in the same group (I'm still not convinced).
You should not model your practices after outliers, since by definition it is most likely that their experiences will be nothing like yours.
Facebook is possibly in the same group (I'm still not convinced).
You should not model your practices after outliers, since by definition it is most likely that their experiences will be nothing like yours.
If you want this on the web, email me and I'll put it up. I've temporarily put up a version that you can download, edit and email back to me if you like. You can find it at www.penzba.co.uk (slash) StartupAdvice (dot) html
I won't put anything else on it, I'm not looking for traffic, I've just got a parking space if you want it. I'm sure others could make similar offers in case you're interested.
If I don't hear from you in a few days I'll remove it - the above is obfuscated to avoid having links to something that might disappear.
I won't put anything else on it, I'm not looking for traffic, I've just got a parking space if you want it. I'm sure others could make similar offers in case you're interested.
If I don't hear from you in a few days I'll remove it - the above is obfuscated to avoid having links to something that might disappear.
Sure, as long as you keep the page ad and link free, I would certainly appreciate the offer to have it hosted. I want the content to speak for itself. Maybe you can just add a small "credit" link at the bottom to my HN profile. Cheers --
Added the link. Do feel free to download it and email me an updated or enhanced version. We'll have to do a dance to make sure it's you for real, but that's easy enough.
If you don't want to change it, that's fine and we'll just link to it from here so Google can find it.
If you don't want to change it, that's fine and we'll just link to it from here so Google can find it.
Thanks for adding it. I don't think I want to change anything, but if I do I'll contact you at the email address you have listed.
Cool. Here's a link for Google to find ...
http://www.penzba.co.uk/StartupAdvice.html
http://www.penzba.co.uk/StartupAdvice.html
One of the key disciplines with stats, which is unfortunately not helped by the default configuration of most popular tools (looking at YOU Google Analytics), is that it either drives decisions or it is useless. If you are checking stats more frequently than you're making decisions based on them, you're wasting time.
Spend an hour and condense the stuff you absolutely need into a dashboard, and schedule time to do any drill down or reporting you need to do on a regular basis. Then, ignore the flowing river of noise your tools would otherwise distract you with.
P.S. If you find yourself rationalizing a once-an-hour check as a sanity test, either put it in a dashboard that you can check out of the corner of your eye while doing productive work, or reduce your heuristic to code and then fire it on a cron job. The computer's time is cheap. Yours is not.
Spend an hour and condense the stuff you absolutely need into a dashboard, and schedule time to do any drill down or reporting you need to do on a regular basis. Then, ignore the flowing river of noise your tools would otherwise distract you with.
P.S. If you find yourself rationalizing a once-an-hour check as a sanity test, either put it in a dashboard that you can check out of the corner of your eye while doing productive work, or reduce your heuristic to code and then fire it on a cron job. The computer's time is cheap. Yours is not.
Great advice. I'd rephrase #3 as "Obsess over having stats, not checking stats"
I run a start-up that is relatively successful. I am a long time lurker on HN, and wanted to give back to the community. I don’t have a personal blog, and HN is the primary audience I want to share this with, so apologies in advance for the formatting.
Although they might sound similar to other posts, hopefully these tips will be unique enough for someone to find useful. I know that they've been worthwhile for me.
== 1. Learn to say "no" gracefully == A lot of tips stress the importance of saying "no", turning down projects that you can’t do, and focusing on your core competencies. This is all great advice. However, in my experience, saying no is not always an easy task. Often times, you’ll be saying "no" to an existing partner, or someone with whom you might want to develop a business relationship in the future. It’s important to learn how to say "no" gracefully, burning no bridges in the process. By all means, be clear in your response, but don’t be a jerk about it, and leave the option open for future discussion at a time of your choosing.
Most online industries have relatively small social circles, and it’s important to be respectful, even if you can’t possibly understand why you might want something that another person is offering. Situations and circumstances change; you might need those connections in the future.
== 2. Negotiate everything == Get in the habit of negotiating everything. "You don’t ask, you don’t get". Remember that phrase and repeat it to yourself. Revenue shares, commissions, server costs, bandwidth costs, CDN costs, software costs, marketing costs, conference ticket prices and contracts are all negotiable. At first you might feel weird asking for a discount, but pretty soon you get used to it, and it will become natural. Contrary to what you might assume, most people won’t find your request offensive, and you wont sound like a jerk. You don’t ask, you don’t get.
You’ll find it changes your life, not just your business. I negotiate everything now, and it’s probably saved me thousands of dollars this year alone, all for a few minutes of work. Car repairs, hotel prices, restaurant reservation times, and most recently an engagement ring from a high end jeweler that supposedly "didn’t negotiate" ;) Remember: you don’t ask, you don’t get.
== 3. Don’t obsess over stats == If you run an online business, it is easy to get caught up in the habit of checking your stats repeatedly throughout the day. Maybe you check your revenue reports every hour. You know how it’s "supposed" to look at 11AM on a Friday, and if it isn’t hitting your past targets you get discouraged and distracted, searching for a reason. Maybe your traffic is slightly down from what it was a week ago.
The problem with this is three-fold. First, it’s a huge distraction. It takes your attention away from other tasks you could be doing. It distracts your focus from long term, strategic thinking. Second, day to day (or even hour to hour) data is unreliable and unpredictable. There are seasonal trends. There are 500 other factors outside your control. Third, it accomplishes nothing. Checking your stats isn’t going to change them.
Start checking your stats only once a day, at most. That way, you’ll be alerted to any potentially significant changes (i.e. your ecommerce engine is down), but still be able to keep focused on your daily tasks and the big picture, which is going to make more of a difference in the long run.
== 4. Make money == Ok, so this one is pretty obvious. But it’s shocking how often it is ignored. There are plenty of reasons to justify starting a business. Maybe you want to work for yourself, maybe you like the challenge, or maybe you really want to change the world. But it won’t matter if you aren’t making any money. Trust me.
A lot of times you will be faced with hard choices. Should I put this ad up here? Will this feature make my app/site look too commercial? Should I charge? If you don’t have a proven business model, you need to make figuring it out your NUMBER ONE priority.
If you’re only getting 1,000 visitors a day, it might seem hard to justify putting up an ad to get what might seem like chump change. But, by doing so, you’ll understand where your money is coming from, and what kind of traffic levels it will take to get you to where you really want to go. Most importantly, you might find that your business model doesn’t really scale, and it will force you to think of a new one. Better now than later. Don’t fool yourself into thinking otherwise, or you’ll just be delaying the inevitable.