The Fastest Way To Make Money

Flashback to Cork, Ireland, about eighteen months ago. I was on the hunt for an apartment. The asking price for one place I viewed was €90 per week. After looking around for a few minutes and asking various questions, I had this exchange with the owner:

— You’re looking for €90 a week, right?
— Yeah, €90 all-inclusive.
— Would you take eighty?

What followed was an awkward thirty seconds or so while Owner Dude looked away from me, shook his head, exhaled loudly and walked over to the window. There he stood for several of my loudest heartbeats while I battled the urge to blurt out a “never mind.”

Finally, he looked back at me and said, “Okay, eighty it is.”

As it turned out, I found a better deal and didn’t end up taking that apartment. But the takeaway remains:

In just thirty seconds, by asking a simple question and enduring some discomfort, I’d effectively made myself €40 richer per month.

€40 in thirty seconds. I earn just a little more than that per hour for my web design services these days.

I had a similar experience finding an apartment in Kathmandu last week. Since I gave my word to the landlord that I’d keep the agreed rental price to myself, I won’t throw out exact figures here. But I can tell you that a similar negotiation approach worked very well for me.

Now I’m not going to claim to be some kind of expert when it comes to negotiation, because I’m far from that. But over the past two years I’ve learned three tips that have served me well when put to use.

I see no reason why they can’t work for you, too.

1. Ask!

When it comes to renting a property, I once read that nine out of ten people never even try to negotiate. That one chick who does? She gets a lower price ninety percent of the time.

It’s simple really: If you don’t ask for a discount, you’re almost certain not to receive one.

So you absolutely must ask, even if it feels incredibly uncomfortable to do so. And you need to resist the urge to be the one to break that discomfort. Let the other party break it. As my uncle says, “Make them an offer, then stand well back.” The worst they can say is no.

With this apartment in Kathmandu, it actually didn’t go so well when I first met with the landlord. When I tried to negotiate — using a similar offer to the one I used to rent an apartment in Amsterdam — he flat-out refused to budge on the original price. I thanked him for his time and left to view another place across town.

The next morning I emailed him and made another offer, this one more reasonable than what I proposed initially. He accepted, and I moved in three days later.

The lesson here is that asking once may not be enough. You may need to ask two or three times before you find a deal.

2. Be Willing To Walk Away

The person with the most power in any relationship is the one who cares less, the one who’s less invested.

I believe the fact that I was willing to walk away and go look at other apartments in Kathmandu worked in my favor. Had I made my second offer immediately after the first was rejected, I doubt the landlord would have accepted. But by walking away after that first (failed) negotiation, I made it clear that I had other options and was happy to explore them.

I’ve had similar experiences with taxi drivers in India. Without exception, the best deals I’ve gotten on fares have been offered to me as I’ve been walking away. Drivers who seemed impossible to negotiate with face-to-face would slash their prices generously as soon as I turned my back on them.

Of course, sometimes it’s extremely difficult to walk away. If that really is your dream apartment (or whatever it is you’re trying to get a deal on) and you simply must have it, then you have to accept that the power lies with the other party. Which leaves you three options:

  1. Accept their terms and pay whatever they want.
  2. If you really can’t afford it, lay all your cards on the table and hope for a pity deal.
  3. Bluff.

(I’m not very good at bluffing so I can’t offer much advice on that. I prefer to be honest and direct and let the chips fall where they may. Which is why I’d probably make a terrible poker player.)

3. Aim For Win-Win

Let’s revisit the negotiation I had with that Cork landlord eighteen months ago.

While I managed to haggle him down from €90 to €80 per week, I didn’t consider the outcome a win-win because he agreed only grudgingly. If I had moved into that apartment, I doubt I would have been his favorite tenant.

I believe one small change would have made all the difference. Groundhogging our interaction…

— You’re looking for €90 a week, right?
— Yeah, €90 all-inclusive.
— Would you take seventy?
— [Pause as he considers…] Eighty is as low as I could go.
— Done!

The idea here is that by making my first offer even lower — unreasonably low, even — I give the landlord room to counter.

I imagine we would have ended up agreeing on the same €80 price per week, but both of us would have walked away feeling that the negotiation had been fair, since both parties had been willing to compromise.

The above example is hypothetical of course, but this principle has worked for me in reality, too, prime example being with my landlord here in Kathmandu. Because my first offer was so unreasonable to him, the second seemed like a significant compromise on my part, and so he was more willing to accept.

Had that second offer been my first though, I’m not so sure he would have gone for it.

So it’s always important to consider how the other party will end up feeling about the deal. You want them to be happy with it, too. Even if someone accepts an unreasonable offer you make, follow up and ensure they’re really okay with it before finalizing.

It might be tempting to take advantage and save a huge chunk of money while negotiating with someone weaker than you, but by doing so you’ll either destroy the potential for a good relationship with that person, or you’ll just be a shithead who takes advantage of others to make a fast buck.

Stephen Covey advocates the “win-win or no deal” approach to negotiations. That is, if you can’t agree on a deal where both parties emerge feeling like winners, then it’s usually best not to make a deal at all. I like that, but it assumes of course that “no deal” is an option, which it sometimes isn’t.

For those occasions when you find yourself lost at 2 a.m. in the middle of Mumbai and the only taxi you find seems intent on ripping you off, you go ahead and get ripped off.

What Are Your Best Negotiation Tips?

As noted above, I’m by no means an expert at this stuff. As such, I’m sure I can learn a lot from everyone reading. What negotiation tactics have worked well for you in the past?

Share the bejaysus out of them in the comments.

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
Share on print
About The Author

24 Comments

  1. Great post! You’re sort of reversing the principal of “decoy pricing” and applying it in a negotiation context… It’s a proven and effective strategy, of course. Instead of selling something–and creating a price point for product A that makes product B look more valuable–you’re instead making your first ~offer~ in a way that makes second offer look more enticing. Check this out:

    http://interaction-dynamics.com/blog/2009/12/decoy-pricing-how-to-make-consumers-choose-the-product-you-want-to-sell/

    I think you’ll find it ~very~ interesting.

    Now if you could just figure out how to apply that to the art of asking a girl out, then you’d be a bazillionare, I’m sure! Sadly, I don’t think it works in that context: “Would you like to have dinner with me?” Girl says: “No.” “Would you like to have lunch with me?” Girl still says: “No.” Apparently the laws of negotiation are not quite universal.

    1. Hey Sean! I hadn’t heard the term “decoy pricing” before, but was aware of the concept. Similar to “loss leaders” in supermarkets, where they slash the prices of things like bread and milk but make you walk through the whole shop to get to them, hoping you’ll pick up several other items along the way.

      As for trying to apply this to relationships, haha, yeah, that’s a bit tougher. You could have fun with it though. Maybe tell the girl she should take you out for dinner sometime. When she says no, you could respond, “Ok, fine, you can take me for coffee then.” All said with tongue in cheek of course 😛

  2. A good example would be when you bought your sunglasses.

    ND: How much do you want for those legendary sunglasses?

    Man: $2

    ND: I’ll give you $1

    Man: Eh, they’re really out of style and lame so okay…

    ND: LEGENDARY!

  3. A wise man once said “A dollar saved is two dollars earned”. Because you don’t have to work for the money you save and you don’t pay taxes on the money you save it really is like earning doubling your money. Negotiating is something I’ve always struggled with but you make it seem simple enough that I will definitely be doing it in future, will let you know how I go. Thanks for another great post Niall

  4. Awesome. Definitely love the walk-away technique, especially when just buying items in markets around SE Asia. Sometime’s I literally don’t want to even see what is offered but by the time they drop prices by 75% to keep me around, I go check it out.
    It’s also good to decide what your time is worth. Here in Malaysia, cab drivers charge foreigners more for taxis and really wont budge on price, even if you walk away.
    But if the cab is $5, and I know it should be $3.50, I’m not sure it’s worth maybe 20 minutes or more of effort to find a willing taxi.

    But I love the lowball offer followed by what you really wanna pay. works like a charm mostly 🙂

    1. Thanks for the comment, Matt. That’s definitely true about knowing what your time is worth. Spending 30 minutes to save $2 is pretty silly when you could be earning ten times that much by spending the time working.

      Hope you’re having fun in SE Asia!

  5. Hi Niall
    Great reading about your time there in Nepal. Funny I almost didn’t open this post because of the title! Making fast money not being my main interest at the moment. But so glad I did.
    I am hopeless at negotiation over money. I have heard these tips before but what I always love about your posts is that you add in the human part. For me the vital ingredient is a willingness to feel uncomfortable after asking. I think some people have a bit more ‘cheek’ than others and can do it without feeling anxious. those who rule the world perhaps!!! But for those of us who feel shy it can feel like torture to even ask for a £1 off a £100 item. New cars, flats, expensive computer…..what an idiot I have felt when I asked for a discount,and got either a No or a derisive offer. You are right, both parties need to feel they got something good.
    I wonder – how long has it taken you to feel less uncomfortable about asking. After 10 goes, 100, 1000? Or do you still get that heart thumping feeling?
    Thanks for this

    Kate

    1. Hey Kate. I still feel uncomfortable about asking, and I’m not sure that ever really goes away. You just get a little more used to it and know that it won’t be the end of the world.

      Actually, that’s not entirely true. I don’t get uncomfortable negotiating with taxi drivers any more. I guess that’s because it’s kind of expected in this part of the world, and you’ll get ripped off if you don’t.

      I definitely was uncomfortable asking for a deal on the apartment here in Kathmandu though. But I have this weird theory that even if someone gets a little upset with you for asking, at the same time they gain a little respect for you for having the guts.

      1. Thanks for that! I agree you get respect for asking and in a funny way that is true for everything. Stand up for yourself however hard it feels and you will be seen more positively than the person who is always worrying about what others think(ie me for many years).
        It helps to know you still struggle – I will think of you when I next try to negotiate and say – well if Niall can do it so can I!

  6. Nice read Niall

    If you ever in Lincoln UK and need a settee for the night give me a look up as I am sure an evening chatting with you would be an interesting evening.

    I should learn about taxi drivers. When I lived in Galway and took taxi’s back in 200/2003 I used to tip them!

    1. Cheers, Keith!

      Tipping is always tricky. I tend to tip in poorer countries even if it’s not custom. I’ve actually haggled Indian taxi drivers down from 50 rupees to 40, for example, but then went ahead and paid them 50 anyway. When it’s that little, it doesn’t make much of a difference to me, but it does to them.

      I suspect the Galway taxi drivers are a different breed though 😛

  7. I’ve had some nice bargaining experiences in Thailand.. it’s fun to arrive at a good price, as it also involves better communication with natives.

    If you’re bargaining in a market, go for half the said price at once. (Or even lower). It’s important not to feel bad, they won’t agree to it unless they have a profit margin. And being pleasant while negotiating is important, if you’re friendly the more chance of getting a good price!

    As for taxi drivers, telling them, “What? The same journey cost me just last week”, seems to work most of the time.

  8. There seems to be a recurring theme with taxi drivers charging non locals more than locals going on across the board and in ref to Galway yes they certainly are a different breed Niall they mostly drive Mercs.

    Galway is a strange place really as they have so many festivals yet the roads become gridlocked ass it is only a small place so quite how those taxi drivers are all driving Mercs when it takes sooo long to get through traffic at presumably busy times is a bit baffling what with not being a taxi driver.

    I have to say the being friendly thing works in sales to as that was one of the main reasons I was a success in sales in Galway back in 2000/2003 as the people took to me as I did them.

    I had customers like the owners of Hollands Newsagents at the top of Eyre Square and their family, the owners of castles like Oranmore Castle and Kilcolgan Castle and even Padraig Harrington the golfers wife was my customer and I can honestly say it seemed sometimes like most of the business owners of the city purchased from me including the president of Ireland Michael D Higgins http://en.wikipedia.org/wiki/Michael_D._Higgins who is a very nice fella and I can honestly say it was my having a pleasant manner that gave people the opportunity to like me that had these people as repeat customers

  9. Great post again!

    I generally “haggle” and have no problem requesting a discount for hotels, services, etc., BUT, when it comes to a housing rental that is a longer-term arrangement, I don’t ask because I don’t want to start off on the wrong foot, and know if I’m easy with this than I can be hard with other requests and rental matters as we move forward that are more important to me than money. Being able to say or infer, “I pay you what u ask, every month, on time, and I could really use your help on this matter” is more valuable to me in some ways. I only talk money if I like the place, and if I like the place enough to talk money then I’m certain I want to live there and don’t want to be declined for insulting the landlord/site, wasting their time, or perhaps planting a seed that I’ll be a problem renter, or that I may be someone who will have trouble coming up with the money because of the “higher-than-my-budget rate” – so that’s one area I’ve left alone.

    After reading your post, I think an approach I might consider in the future, once face-to-face at a housing-rental viewing, is to say “I like the apartment, and you seem great. I’m still looking at a few more apartments, but of all I’ve seen so far, this one is my favourite. Is there any leeway on the rent? It’ll make me stop my search. Can you do any better than $x per month?” By not listing a number first, they’ll still feel powerful and like a decision-maker who holds the cards when they respond with a number, or a firm “no”, yet I will have power to either contact again later as you did, or to accept or walk….

    On the other side of the coin, I’ve rented rooms in my apartments, as well as managing room rentals in Mum’s apartment, and when someone asks for a reduction before coming by to meet/see, it turns me off and I don’t even set up a visit for them. If they ask for a reduction once in person, I will only offer a small discount as an incentive to lock-in if I think they’ll be a good fit. Other than that I feel that they’ve wasted my time – for example, with a $540 (CAD) all-inclusive room for rent rate, and they arrive and say “I want the room but I only have $500 for rent each month, then I think “why the fuck are you looking (so far) outside of your budget”. I ask them why they would be searching above their budget, and they usually have nothing to say. I explain to them that we’re all renting, and if their rent goes down, the other 2 people’s rent will have to go up, and that’s not something we’re willing to do for a stranger (trying to show them what an asshole they just came across as). I won’t rent to people who seem self-entitled and have wasted my time! See how stating a price come across very differently than requesting a reduction….?

    There’s my two cents!

    1. Fantastic points, Jada. Thanks for adding so much to the discussion.

      I agree that it would be shitty to ask for cheaper rent on an apartment where the people sharing are paying more. Unless you’re getting a much smaller room or something, that’s simply not fair.

      Like I said, it does need to be a win for both parties. I got the discount on this apartment in Kathmandu by offering to pay the landlord two months in advance, instead of the usual one. With that extra security, it was a good deal for him, and it didn’t make much of a difference to me since I knew I wanted to stay at least two months anyway.

  10. Just getting caught up on some older posts… great thoughts about negotiating.

    But my question is, and maybe this is because of where I work… what do you do when the power goes out each day, especially in the evening/night time? Do you just go somewhere else? Wait it out? Rely on battery-powered stuff. Just curious.

    1. Hey Philip. At night time, they run a generator for my building so the lights work then. Wifi works all the time, or at least it’s supposed to. In reality it’s really slow and intermittent, even when the power is on, so much so that I can rarely work from the apartment.

      So I work from coffee shops most days. I don’t mind working out of coffee shops, but given how much I’m paying for the apartment, I was hoping I’d be able to work from there each day and not have to buy coffee all the time.

      Given that inconvenience, I’ll be looking to move to a different apartment once my two month lease is up.

  11. Pingback: Tips and Tricks: Finding accommodation before you hit the ground | Jets Like Taxis

  12. Pingback: What Are You Practicing?

Leave a Comment

Your email address will not be published. Required fields are marked *

We hate to do this...

...but we had to distract you for a minute to tell you:
Once per week, we email 3,400+ legendary subscribers with some good stuff related to online business.
Enter your details below to get the next one.

We’ll first send a confirmation email to make sure it’s you :-)
View our privacy policy to see how we protect and manage your submitted data.