I work in a music store where we buy and sell used instruments and musical gear.
Every day folks come in with gear to sell. Guitars, violins, banjos, horns, pedals, speakers and mixers, mikes, etc.
Many people understand that we buy to resell and obviously can’t offer the full value of the item. Some don’t understand that we can’t offer 80 to 90% of the value and still remain profitable. We make offers and people can say yes or no.
The one thing that occurs daily and I still don’t understand is the people refusing to say what they want for their item. 4 to 5 out of ten people wil answer, “how much are you asking?” with " Oh I don’t know" or “I’d like to hear your offer first” That alone doesn’t bother me, but many of them act offended or disgusted when an offer is made which tells me they clearly had some perception of value.
My question is, why this tactic? Is there some percieved advantage in refusing to tell the buyer what you think it’s worth? Sometimes it’s like pulling teeth to get someone to give me a number even after i’ve made an offer.
They think it puts them in the power position. I saw it all the time at my camera store in the 80s. They think they can get what they paid for it, or more, and are unwilling to accept that they are wrong. Preconceived notions and unrealistic expectations are difficult to get past.
Not everyone is like that, but enough I ran into were. YMMV
I had a boss who did this to me. (Actually, the Boss’ Boss’ Boss.) He was selling a few toolboxes, filled with tools. He had an idea that I might be interested in buying them, so he called me into his office to talk about it. I expressed interest, and asked him how much he wanted. He replied: “How much do you think they’re worth?”
Awkward. Would a lowball offer offend him?
I ended up not paying anywhere near what I should have, but I could have done without the dance.
It can be the other way - they may have unrealistically low estimation of value.
They’ll say, “I’ll take $50” and you were thinking in the $200 range. Then they’ll feel like chumps when you take it for $50 and find out later what it was worth.
You the buyer in the store has a better idea of the value. But, on the other hand, if you offered me $50 for something I (even unrealistically) thought was worth $200, I’ll just say no thanks, and let you laugh behind my back later.
The above. But also, I don’t want to be insulting or idiotic by admitting I wanted a price completely out of line with what’s reasonable. Can’t have the employ laughing at you for looking like a fool.
It sure seems that some people see it that way. I thought this was interesting.
"3. “Why don’t you throw out a number?” There are differing schools of thought on this, and many people believe you should never be the first person in a negotiation to quote a price. Let the other side start the bidding, the thinking goes, and they will be forced to show their hands, which will provide you with an advantage. But some research has indicated that the result of a negotiation is often closer to what the first mover proposed than to the number the other party had in mind; the first number uttered in a negotiation (so long as it is not ridiculous) has the effect of “anchoring the conversation.” And one’s role in the negotiation can matter, too. In the book Negotiation, Adam D. Galinsky of Northwestern’s Kellogg School of Management and Roderick I. Swaab of INSEAD in France write: “In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.”
Since we do many buys and also sell we try to make a buy as brief as possible. If the customer is asking a reasonable amount we’re willing to pay and be done with it. Our more regular customers understand this and come in with reasonable requests, get their cash and go. If a customer won’t give me a number I have no problem making an offer. A couple of employees work harder at getting them to throw out a number. And No, if someone asks for $100 for something I would have paid $150 for they don’t get more. That is far more rare than people wanting all the money or 80 to 90% of it. My experience has been that the people not willing to quote a price generally have a much higher expectation and are more likley to be offended if an offer is made they don’t like.
One thing that happens often is people wanting all or most of the money. Meaning, since they did a little research and found their item was selling for $100 they expect $100. We often explain that since we only buy to resell we can’t do that and 90% understand.
It’s rare that someone warrents a WTF? ONe guy brought in a nice set of drums. We spent 20 minutes looking at them , taking them out of their cases, and me doing a little research on what they were selling for. They were selling for $1000 to a possible $1200. I made an offer which he thought was ridiculous.
“I’ve already been offered $1000 by a local church” I felt like saying “WTF are you doing here? If you’ve been offered their resale value why take the time and trouble to bring them to someone who obviously wants to buy them to resell?”
It’s an annoying game. I remember years ago when I went to sell my comic book collection one dealer said “$10 for the lot or $20 in trade” when he had several of my comic books sitting there on display, one was for $20.
I found it to be a total insult. But its no worse than the jerks who go around to garage sales hoping to find some dope selling an antique worth $1,000 that they can sucker them out of for $5.
So it comes down to the seller not wanting to be taken and the dealer wanting to get the maximum profit. Neither person wants anything less.
I know, right? It’s crazy and we go through the same thing at my family’s annual yard sale. My mother has a firm belief that she doesn’t want to screw with that stuff any longer, so it’s really priced to sell and she always makes a good profit. Yet I know folks who routinely have garage sales that you’d be hard pressed to find items that were much less than 5% off retail. What? If I wanted to pay that, I’d shop in a store with a refund guarantee, dweeb. Then they wonder why, time after time, they always keep the same things. Those folks hardly ever get rid of anything.
This is one of those areas where I like to pipe up and remind people, “You do this all day every day. I don’t.” Remember that when you are dealing with these people. They know they are in a situation where you hold most all the cards (information about value). So, they are a little rough at it - they don’t do this all that often.
Information asymmetry is fairly powerful in situations like this. A customer walks in knowing a personal history of the instrument (i.e., what they paid for it) and not much else. You as the buyer know all kinds of things about the musical instrument market. You hold all the cards and wield all the power, and then a customer walks in and you say, “Tell me the only piece of information you have that I don’t have, and then we’ll begin negotiations.”
Its the opposite with us. When we had our last garage sale my wife priced the kids clothes at prices well below the thrift stores yet people still wanted big discounts.
No, I hear ya. Even with her rock bottom prices, she still occasionally has folks try to haggle her down even further. We just consider, for the most part, that it’s the price of doing business and laugh it off.
Whoever first names the price is at a disadvantage.
Say you want to sell something for $100. The customer sees it and is willing to pay $200. If the seller gives a price, he leaves money on the table. If the customer gives a price, he’s overpaying.
Brian Epstein cost the Beatles millions of dollars in toy sales by naming what percentage of the price he expected to get first off. He hadn’t done his homework, and what he was asking for was less than a third of what was customarily paid.
And then you wonder why people don’t won’t to name a price?
FWIW - this, to me, makes you less than fully ethical. I think when you do this, you’re taking advantage of superior knowledge which is not cool - you don’t need to offer the full $150, but you should make a “good faith” offer to come closer to the $150 you would have paid…