Negotiating at Costco
My Costco Negotiation Story
I do media development here at Mobus Inc. Needless to say, I am immersed in negotiating training material and have attended the Mobus seminar numerous times. Within the first few months of working at Mobus I started to ask myself, “Have I become a better negotiator as a result of being exposed to all this material?”
I realized I knew all the tactics, counter tactics, strategies, and various other concepts to assist me in negotiating by heart… yet I had never actually tested my new skills. What would be the ultimate test to my negotiating skills be? I wonder if I could negotiate at Costco.
The idea of negotiating at Costco kinda made me smile. The whole point of Costco is that you are ALREADY getting the lowest price. Would I be negotiating with the cashier who’s desperately trying to reduce the massive line jamming up the snack aisle? Then I recalled an important point in the seminar, “Price is nothing but the viewpoint.” I was in the market for a Smart TV and I must have spent 15 minutes examining each television model that Costco had on display. A Costco electronic specialist walked up to me and said, “You look confused, can I help you?”
Oh boy, here we go, I thought… then I remembered hearing Frank Mobus saying, “Don’t jump to price too soon.” I responded, “Yeah, I’m thinking about buying a TV. I don’t need 4K or anything too fancy but I need at least a 1080p image, internet capability, and plenty of HDMI ports.” Clearly I was talking to someone who knew his inventory, he very politely showed me TV after TV, happy to be doing his job. “That’s a really popular model, we are getting a new shipment in tomorrow and if you’re interested it, we only have the display model left.”
Bells started ringing in my head. I had discovered a few very valuable bits of information. First, he was under some pressure to sell this particular unit. Second, this display unit must have been out of its box on demo mode for a substantial period of time. Third, this was a popular model TV and that numerous used or open box models would no doubt be listed on Amazon, Ebay and even Craigslist.
So I decided to employ a technique that Mobus teaches. It’s a basic haggling tactic that’s called “The Flinch.” I examined the price of the TV and did a Buster Keaton-style double take, “Doesn’t that seem kind of expensive for what is essentially a used TV?” The Costco specialist seemed a little surprised, “Well, I can reduce the price $50 dollars for you because it’s a display model.”
Amazing, I thought, such an early concession, this points to the fact that there is more pressure on him than I thought to sell this particular unit and that he has some room to negotiate. “Still seems kinda pricey to me, how long has it been on display?” I asked. “Hmm, not sure, let me see.” He took out his iPhone and I took out mine. Instantly, I searched the model number on Amazon. “Oh yeah, look here, this same model is selling used on Amazon for just over $400,” I said.
He examined my phone and said, “Okay, well I can do $450.” He laughed, “I feel like I’m on Shark Tank.” I laughed too. “I tell you what. Honestly, I wasn’t thinking about spending this much on a TV today so I might have to do a little more research. But, if you can give it to me for $400, we got a deal.”
“Let’s split the difference. How about $425?” he said.
Jim Holmes, a Mobus VP and specialist presenter, flashed into my head “When someone offers to split the difference, why not split it again?!”
“$410?” I probed. “Deal,” he exclaimed and then laughed as he gave me a firm handshake. You’re a tough negotiator he said. (He doesn’t know the half of it I thought). Beyond the money I saved, which was substantial, the act of negotiating made me feel proud of my purchase and reared me up for more negotiating in the future.
Do you have a negotiating story with a big retail store? Let’s share some advice and stories about negotiating like my experience at Costco in the comments below!