“Sellers always take you for a joy ride because you don't negotiate well. Get down there and ask for a discount” my mom said to me.
I wanted to buy a new pair of shoes. I was 12 years old.
Lebanon has been a country populated by merchants for many generations. Bargaining is in our DNA, it's a way of life, and it's a measure of how souk savvy we are.
Since that day that my mom shared her wisdom with me, I have bargained for almost everything; from lattes, to free upgrades on planes because… why not?
Although, bargaining has gotten me into trouble a few times.
For example: On a picturesque morning trip to Belgium I met an artisan jewelry designer in a handicraft marketplace. I thought I would buy a pair of earrings for my sister so I asked:
“How much are those earrings?”
"22 Euros” replied the designer.
Staying loyal to my Lebanese roots, I said:
"I’ll buy them right now for 18 Euros”.
The seller suddenly turned red and asked:
“do you not think they are worth 22 Euros?”
I had hurt his pride, pierced his ego and now he was getting back at me. I ended the conversation and swiftly moved along. Of course, I ditched the earrings.
Let me tell you why.
Pricing is one of the main business variables that test your resilience as an entrepreneur. It is directly linked to the confidence you have in what you are creating. It reflects the sweat and labor you put in and maintains the image of your brand. Right? And when what you sell is a service or a piece of art (like the designer in my example), things can get personal but they shouldn't because pricing shouldn't be about the ego.
Recently, I was put to the test myself just like I had tested that handicraft man from Belgium, 10 years ago.
A client was trying to divide my quote by three just like we always do, discount. I thought to myself “is that what he thinks I’m worth!?”. My ego wanted to defend my price.
Then, I remembered the Belgian artist I had irritated about a decade ago. For a second, I empathized with him. He had put his soul and heart into those earrings and he, too, felt insulted by my bargaining. Yet, the truth was that pricing in services (and certain products) have nothing to do with me or the Belgian designer. Pricing did not determine our personal worth or our value.
Pricing is simply a variable of the marketplace.
Resilient entrepreneurs know that pricing is about business, pure good old fashion business. The reality is that money doesn't have grey areas, you're either making it, preserving it, or losing it (quote inspired by Kevin O'Leary). So always expect a bargain!
The next time you either ask or get asked for a bargain, here are my tips for you:
- Smile along
- Remain calm and respectful
- Never waiver; remain steady with your price or your offer — like a mountain in the face of a storm
If you can study your market prior, then do so (after all, you aren't a tourist in Belgium). Keep in mind that you do not want to buy or sell from just anyone. Sell-to-anyone-businesses do not achieve extraordinary returns.
If you aren't aiming for extraordinary then what are aiming for?
Alex the CFO