Two and a half months ago I jumped from working full time at Today’s Machining World into the wild laissez-faire world that is the used machinery business. One thing that has been difficult to learn working at Graff-Pinkert is the art of placing a value on a machine. My bosses are constantly shifting their stances on what we should pay for a piece of equipment. This business ain’t retail. There are no price tags in the window when we go to a shop to buy a used machine.
It made me think of a recent article in Wired Magazine about the invention of the price tag. Back in 1846 an Irish immigrant named Alexander Turney Stewart opened a store called Marble Dry Goods Palace in downtown New York City. It was a huge emporium that sold both luxury and everyday items. According to the article, Stewart’s store was the first in the United States to use a street-level plate glass window to display merchandise and more importantly it was the first store to label its merchandise with price tags.
Before Marble Dry Goods Palace, a customer and seller had to haggle over any common item. Often after a transaction at least one of the parties if not both felt taken advantage of. But when the fixed price tags were introduced (which other retailers quickly copied) salespeople stopped trying to squeeze the most out of every transaction and developed longterm relationships with customers.
In every deal at Graff-Pinkert I observe the dance of raw, old capitalism. What should we pay for a machine? What should we ask for it? Only God knows. I guess it’s the price where all parties can smile after the transaction knowing they can make money because of it.
Question: Do you prefer haggling for a car or other types of merchandise or do you prefer a fixed price?
Video from the TV show Pawn Stars on the art of haggling.
Full story from Wired can be found at http://www.wired.com/magazine/tag/auction/
Some people really like to haggle over a car; for them it’s an enjoyable part of the sport. Others find it distasteful, even embarrassing, although it isn’t nearly as bad as negotiating with an artist over the value of his work.
That said, I think your question poses a false choice of either haggling or a fixed price set by the seller. There is a third way: go to the automobile dealer with a firm idea of the price that you are willing to pay, which includes what you think is a reasonable profit for the seller, and tell him what that price is right at the start. Either he agrees and you have a deal, or he doesn’t and you walk.
Buyers need to recognize that everyone who is in business has to make a profit on a deal, otherwise what’s the point? Squeezing the last few bucks out of a deal may seem like fun to some buyers, but that completely discounts the value of a deeper relationship with the seller. Not all transactions are about money.
I think the success of websites like craigslist.org is partly due to our desire to haggle or get a deal. I’ve found a few machine tools using websites like http://www.allofcraigs.com to search that marketplace on a national level.
In this day and age like any other time, some prices are fixed. In that category I list medicine, the doctor bill, gas and a gallon of milk. It is what it is. If you can get away from the large suppliers and deal with smaller direct type people, prices will flucutate. The local farmer you visit might give you an extra ear or two of corn because you are a return customer. Outdoor flee markets, farmers markets, antique shops, some artists and Ebay give you an outlet to great items at a fraction of buying new from someone with a fixed price on the item.
I like the later. When I can cut out the middle man, prices are less expensive and I take comfort knowing I am paying the person who really did the work or grew the food themselves. And they are my local people, not a gang of importers.