Capitalism 101

I’m a big fan of negotiation.  My earliest memory of engaging in some form of dickering related to a certain lightly-used Transformer which belonged to a certain overweight friend of one of my brothers.  The Transformer was called the “futuristic car” and basically looked like a 1996 Chevrolet Lumina, but since it was 1990, it looked even more awesome than the Oldsmobile Toronado owned by my friend’s mother, which had blue leather seats, and was thus, the nicest car I’d ever contemplated.  I didn’t even like or own any other Transformers, but simply because it had been offered to me at a flexible price, I decided my life would be neither happy nor complete without it. From there on, I’ve been a man of deals.

Over the years I’ve come to learn that one of the keys to getting the better end of a bargain is to fully understand the motives and dynamics at play for each of the parties.  In most situations, there is an overt context, such as “person who wants car, person who wants to sell car” but it is far more important to glean the context that is not overt, which might be “person needs to buy car because they are going on a date with a girl tonight and already told her they owned an Audi A4 even though they have a 1989 Saab 900”.

When I think about the importance of identifying the subtle currents in any negotiation I'm reminded of a situation several years back when I sold two snowmobiles to a round-faced woman who I think, wanted them to fill the remaining free space in her boyfriend’s garage which was already nearly at capacity with boxes, unplugged appliances, and beanie babies.  If the woman had taken her time, she would have probably sensed that she was in a great position to strike a deal as at the time, the bargaining power was in extreme disequilibrium due to the fact that my mother was displeased that the machines were still in her home, even less pleased that they were in her lawn and less please still that I lived 170 miles away in a studio apartment and left her to field questions from the kinds of people who buy used season-specific power equipment when they should be paying child support, or seeing a dentist.

Instead, though, the woman was so overcome with lust for the machines that she shifted the dynamics squarely in my favor from our first contact.  She shifted the power in two ways – first, by asking that if approached, I lie to her fiancé about how much she’d paid and by letting it slip that the source of the funds for the purchase would be soon-to-arrive student loan proceeds which said fiancé believed would be used to fund an associate’s degree in criminal justice.

Given the facts on the ground, we agreed on 90% of asking price (which was 30% more than I was expecting to get) and delivered the snowmobiles post-haste with a 50% deposit to the aforementioned garage where they were immediately obscured by pool toys, and prayed silently that the loan check would arrive before the fiancé’s inevitable meltdown when he opened the door to his garage and saw the Associate’s Degree blocking his path to the freezer.  When it came, I was safely in Florida and calmly explained honestly that I had urged the buyer to consult him, but didn’t feel I could go above her head and ruin his surprise. 

When you are not, as above, the seller in a transaction involving a deceitful  overeater, a keener eye for signals is needed to establish one’s position, such as the time a seller of downhill skis gave me the subtle indication that he was flexible on price when he posted the skis on Craigslist at 12:35am and had revised his price downward by 1:15am indicating that he a) had a cocaine problem and b) would probably let the skis go for a song if I arrived before daylight.

My track record of good deal making came to an abrupt halt, however, when I moved into my current apartment, which is owned by one of the least reasonable people ever.   Our obsession with the apartment and fear of losing it allowed him to pull off some unorthodox agreements, such as the agreement where he would allow other people to use our electricity and hot water to do their laundry in my basement whenever they wish.  On its face, this is a really bad deal, but when you stop and think about it, it is a totally awful deal, probably illegal deal, which is the reason it was not mentioned as a lease term, or put in writing.

The last part of knowing your bargaining position is recognizing when things have changed and being ready to act accordingly.  At this point, we could take or leave our place.  If he hasn't figured it out by now, the snowmobiles on the lawn should give him a clue.  

 

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