This is the question I get asked most often: How did you get such a deal on that? For me, getting a deal is important because I enjoy having high quality objects. I would much rather have a few nice things than a house full of disposable items. The great part about having nice things is they typically maintain their value and produce less waste than their expendable counterparts.
The four steps to getting a deal:
1. Decide Exactly What You Want
2. Know What a Deal Is
3. Decide Where to Buy
4. Negotiation and Purchase
Step 1. Figure Out Exactly What You Want
The more information you have, the better chance you have of getting a deal. If you are looking for a car, take the time to research, test drive, and ask trusted friends or experts before you buy. Once you know what make and model you want, you have information to begin your search. Knowing you want a 2006-08 Camry is much better than deciding to buy a sedan under $10k. Start broad then narrow your focus. This doesn’t have to be super specific, it could range from a 42” TV to the Philips 42” RYS-2983. I tend to look for a set of qualifications, especially on more expensive items. Take the TV example: I desire 1080p, 42”, 120hz, well reviewed. This narrows the focus but leaves room for flexibility by reducing the number of available options to compare. Simply put, defining what you want makes it much easier to determine what a good price would be for that specific item.
A great way to do this in an expeditious fashion is to ask someone whose opinion you trust about the particular subject. Ask this person about the minimum specifications you need for an item or ask for specific recommendations. Once you have these, your search moves much faster. Amazon has tons of reviews you can use for free research even if you never actually buy the item from there. Now that you know what item you want or have a basic understanding of what would work for you; proceed to step two.
Step 2. Know What A Deal Is
Find out how much it’s worth; not how much it cost. Historically, this information was notoriously difficult to find but now the process is so much easier. A great place to find this information is browsing through Ebay’s Sold Listings (Ebay Search -> Sold Listing Sort). Everything from clothes to cars to electronics will have up to date actual selling prices. Even looking up what houses are actually selling for is easy thanks to Zillow’s Recently Sold section. Check sites like Camel for historial online prices and if you would like advanced deal information you can search by keyword on Slickdeals to see what the most recent great deals have been. Even craigslist can be useful. You can search for an item and look to see what has been on the site for weeks; this can show you what items were overpriced. Knowing what things are actually selling for is the single most useful information when determining value.
The metric I use when trying to determine if something is a great deal is this: If I wanted to sell it tomorrow, what price would it have to be for it to sell that quickly. If the average selling price of an old Iphone is $100, then I could probably sell mine quickly if I offered it for $75. If I think my car is worth $7,000 I could probably list it on Craigslist for $5,800 and sell it tomorrow. The lower the target price the more conservative the estimate. I set this as my target price for a deal. You can take a lot of risk out of a purchase if you know that in a worst case scenario, you can still sell if for about what you paid for it.
For example, a few years ago I decided I wanted to become the world’s greatest guitar player. So, I decided to buy an electric guitar. I asked around my musically inclined friends and they suggested a good starter guitar would be a used MIM Fender Stratocaster. Not knowing if I would enjoy or stick with the guitar thing, I didn’t want to spend lots of money only to later have an expensive guitar reminding me that I actually don’t like to practice playing music everyday. So I did a little research and found they were selling pretty regularly for about $250. I spent a week or two cruising Craigslist and found a guy who was moving and needed to sell his quickly for $200. Turns out, I’m not cut out to be the next amazing electric guitar player but I did end up selling the Stratocaster for $225 a year or so after I had bought it (and rarely played it).
It does take a little bit of time to get familiar with the sources for good deal information. However, think of spending this time as a life lesson in learning how to determine how much something is worth. Spending 30 minutes familiarizing yourself with the sources could lead to $1,000s saved over the years.
Step 3. Decide Where To Buy
Here are some general rules of where the best deals are for most of the purchases I make:
- If price is not important and convenience is: Retail
- If it’s big: Craigslist
- If it’s easy to ship: Ebay
- If it’s new: Search Slickdeals
- If you need it fast: Craigslist or Amazon
- If you have time, it’s common (or very rare) and used is OK: Flea market or Garage Sale*
These are the internal rules I follow when I am thinking about where to get a deal. I tend to check the online sources even when I plan to buy elsewhere because they are easy to access from my phone and I can get a quick idea of the average price point.
A secondary note to consider: Typically the best deals are to be had when someone is trying to get rid of an item as opposed to selling it for a profit. Family and friends are often getting rid of items that may still be of use and in good condition. Even at flea markets or other used markets, try to identify individuals who are trying to clean out their closet instead of trying to make lots of money selling used items. After a little practice, these observations become second nature and deals are easier to spot.
I know a lot of people are confused about buying on Craigslist. Here is a little script I use when buying items. The clearer you are, the better chance a seller will respond to your offer. Seller’s will thank you by calling you first if the item is still available. Here is what you should email or text the seller:
“Hi, my name is Stephen and I live in Athens, GA. I would like to buy (insert item here) today for $XX and I have cash to pay for it. I can meet downtown at (public place) at 6:00. If that doesn’t work for you let me know when and where I can purchase the item. Please call or text me at 555-5555 if your item is still available. Thanks -Stephen”
Step 4. Negotiation and Purchase
The precursor to the actual purchase is gathering exact information. Knowing how much something is worth and knowing how much you are willing to pay makes this process much easier. Using the steps above you should have a very good understanding of the approximate value and where to find the object you desire.
To be honest, I tend to spend significantly more time on the find than I do on the negotiation. This means, I tend to spend a few minutes researching what something is worth, and then try to find a price that is less than that.
Know when to negotiate and understand your position. Negotiating the price of toothpaste at walmart is not going to get your very far, but when buying a house or a car a little negotiation is expected. On craiglist I often offer what I’m willing to pay upfront to make it clear and not waste the sellers time if I do not want to pay the asking price. I often find myself negotiating very little simply because when I find a deal, the object is often underpriced and will sell quickly. In negotiations, know what you are willing to pay. For personal transactions, a simple statement like “I want to buy your widget, what is the best price you can give me?” is a great place to start. Don’t ask questions that can be answered with Yes/No i.e. “Is that your lowest price?” Secondly, know how strong your walkaway power is. How likely are you to see this object/deal again? If you know exactly what you want and what a good price would be, the actual purchase is easy.
When purchasing, cash is king. I don’t necessarily mean literal cash but having access to real funding takes away a very specific and often confusing variable of financing. Financing has its merits but be aware that it complicates the cumbersome process of many large purchases.
Lasty, for expert buyers, setting up reminders, alerts and saved searches are simple ways to find the best deals. Slickdeals -> My Account -> Deal Alerts lets you type in a keyword and it will notify you when a good deal is posted. For craigslist or ebay: search for exactly what you want and then set the price limit to what you want to pay i.e. “Kindle Fire 16GB” Price Range: $50-$75 and then bookmark the results. Check back regularly to see if anybody post a great deal.
Buying less stuff makes this process less stressful. If you only buy one non-consumable item a month then you have plenty of time to get deals on everything you buy. If you are buying multiple items every day, across a variety of markets, it is tough to have time to know what is a deal. If you want to buy something, wait thirty days before you buy it. Often, the feelings pass if you wait a little while. Buy less stuff, buy quality stuff, get a deal on what you buy, and sell your old stuff.
*I’m not a big fan of garage sales. They can be inefficient and you end up spending lots of time and gas for a limited selection if you are looking for specific items. It’s often more efficient to attend flea markets or community yard sales.