- April 29, 2013
- Posted by: Capital Funding
- Categories: Property Finance, Small Business Finance
I’ve recently found myself regularly watching a TV show called American Pickers. It’s a reality show based on the day to day activities of a company from Iowa called Antique Archaeology and its 3 members, Mike, Frank and Danielle. This is not a show about your normal stuffy Antiques, but about collectible items that are located in the back sheds and barns in the back Counties of the USA. Most of us would consider this stuff junk but these guys purchase and resell for some nice profits.
I’ve grown to quite like the show which is unusual as I don’t watch much television let alone a regular series. It seems I’m not the only one whose interest has been “picked” as I’ve noticed a number of similar shows appearing recently and the network has even created the genre “Mantiques” to support the shows. This got me thinking as to why this show has grabbed my interest, considering I’m not a collector and I’ve pinpointed it down to a few things.
The first reason is because I was privileged to live in North Carolina for 3 years and this show is predominantly filmed in the back Counties of the USA and shows a side of the States that most people never see. The small towns, the interesting locals, the beautiful country side and the amazing history all keep me captivated. It reminds me of my time in North Carolina and the road trips exploring the Deep South.
Secondly, they come across some particularly interesting characters and some amazing stuff that you’re most likely only going to find in a place like the USA. The production team has taken it one step further and often provides some history behind the products that the guys purchase, which is a great touch.
Thirdly, I love to watch the negotiations that take place with each “pick”. These guys are doing this on a daily basis and they‘re often attempting to purchase items from other very experienced collectors or pickers and in the process leave enough “fat on the bone” to make a profit. Watching the pro’s go at it is good negotiating training and I thought that I’d highlight a few of my observations about how these guys negotiate that we can all take into our daily negotiations.
- Break the Ice
Often the guys come up against a potential seller who doesn’t have a major need to sell or is still attached to many items. If they get this feeling they immediately start looking for something of low value and little sentimental value and attempt to purchase it. They tend not to haggle that much on the price as their aim is to relax the seller. They quickly attempt to make another purchase on a low value item and keep the momentum rolling with the goal of a more valuable item that has caught their attention.
2. Having an idea of the value of what they’re purchasing
Frank and Mike are obviously good at what they do and they have a good idea of exactly what certain items are worth. They both tend to have certain areas of specialty and go searching for these items. It seems that they rarely lose on their acquisitions, however it does happen and it’s usually on items they take a ‘punt” on outside of their specialty.
3. Show indifference to the item they really want
Often the guys will ask about the price of an item and once the seller informs them , they move straight on without even attempting to counter offer. They’ll wander around and pick out of a few other items to get the green stuff flowing. As they get to the end of the pick, they’ll bundle up a few items, usually of lower value and give the impression that the spending is about to dry up. They then throw a price at the seller for the bundle and at the last moment suggest an extra amount for the item that they’re really interested in. It’s amazing how often they manage to get that item substantially cheaper than what was originally offered. That item is usually the one that provides the greatest return on investment.
4. Bundling Items
This seems to be the favourite strategy of Frank. He likes to get a lot of items together and negotiate an overall discount on the whole bunch. He seems to use this strategy mostly when he and the seller can’t agree on the price of a particular item. Rather than butt heads, he simply changes the focus and usually get’s the item that he’s after.
5. Using honesty
Often they’ll come across sellers that have inherited deceased estates full of valuable and diverse items and have no knowledge of what things are worth. These sellers are extremely cautious as they naturally fear being ripped off. The guys will usually go looking for a low value item that the seller most likely considers junk and ask what they want for it. When the seller nominates his price, the guys look at each other and tell the seller that the item is worth twice that and that they’ll give them that amount. Immediately they make the seller a little more at ease and they keep working at it. By the time they get to the big ticket items, the sellers are comfortable with the prices the guys are being offered.
6. Create Rapport
The first thing the guys attempt to do is create rapport with the sellers. You can imagine that many of the sellers have been criticised for their “junk” collections, and to have two guys suddenly expressing their admiration for their collection can only make them feel special and far more receptive to cutting a deal.
7. Give the vendor many little wins to obtain one big victory
Quite often the guys will spot an item they have to buy. The seller provides a price which is way over the odds and seems non negotiable. Rather than butt heads they move on to other items that the seller seem more keen to move. They start negotiations and more often than not meet the sellers price and in the process let him know that he did well on the deal. When they return to the main item, the seller always seems to be far more receptive to negotiating and even feels obligated to give them a little bit back in reciprocation for the minor victories.
The guys are prepared to trade and do deals. In one episode they sold an elephant’s head (Legal not poached) to the rock n’ rolla, Jack White for $12k. Now Jack may be a wealthy, eccentric, rock musician but a fool he isn’t. Jack wanted that elephant’s head but he wanted to sell some of his own collection to help pay for it. The guys had a red hot buyer and that elephant head would’ve been difficult and costly to sell. Both sides were all over the situation and a deal was swiftly negotiated that left all parties pleased and feeling like they both had victories.
If you haven’t seen an episode, take the time to try and catch one. I hope my insights can help you improve your negotiating skills in the future. If you have seen an episode, I’d be thrilled to hear your views and any other tips that you may have picked up. Remember, negotiating is the highest paid work you’ll ever do!
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