The Art of Negotiation According to Pawnstars
The other day I caught a marathon of the show Pawnstars. On the surface, it's kind of a blue collar version of Antiques Roadshow and at first I thought it was a pale rip-off of the original. But after watching a dozen or so episodes and a couple Antiques Roadshows, I'm convinced I like this Pawnstars show more, mostly due to the more modern items being discussed that I can recognize versus the Roadshow saying an ugly broken victorian chair is worth $250k which makes no sense to me.
Anyway, the big part of the show is that this is a pawn shop in Las Vegas of all places, so people are often desperate for money when they bring items in, and there are rounds of negotiation on price featured for every item following an appraisal. The appraisal stage varies among these three situations with the main pawn shop employee/owner Rick:
- Rick doesn't know how much something is worth, and brings in a local expert to give a real world auction appraisal price in front of both him and the owner of the item.
- Rick knows a lot about the item and gives an estimate for how much he might be able to sell it for.
- Rick has no idea how much it is worth, neither does the seller, so they guess.
Now, if you were really trying to get top dollar, it would help to do some research at the very least on Google before you ever try to sell anything. It being Las Vegas and people often being desperate for money, it's clear most sellers arrive not knowing anything about their item or what its worth may be.
The best part is the negotiation stage. I'm a terrible negotiator and in the past I've only done bargaining for new cars over email, since I completely fail trying to persuade lower prices from someone standing in front of me. I'm fascinated at how consistently Rick pulls a fairly low price for items and there is a general pattern to the procedure worth knowing.
Rick always asks people "So what do you want for it?" and the negotiations start from there. In the first situation, they have a third-party price and sellers will often say they want that full price but eventually cave. The second situation is the owner coming up with a price, and sellers tend to not cave so often (probably due to trust issues). The third situation is my favorite, since it's pure speculative negotiation with both parties in the dark about any true worth.
There is a general pattern almost every transaction follows and it goes like this:
"What are you looking to get for this?"
"$800"
"Hmm, I can't go anywhere near that, I was thinking more like $400 or so"
(usually there is a joke or some light laughter thrown in to defuse the tense situation of offending a seller with a low-ball bid)
"$400?! I'd really like to see $700"
"Hmm, about $450 is as high as I could go"
"I really needed to get at least $600 today"
"Ok, my absolute final offer, and only because I like it (inserts flattery for the seller) is $500"
"Ok, sold" (handshake)
No matter what the appraisal is at the start, almost every transaction involves the pawn shop not wanting to pay more than half of what something is worth. A lot of sellers balk and leave, but most give in because they had no idea what is was worth so anything more than zero is a deal.
My favorite deals are in the third category, where by just asking what someone wants for it, and talking them down to about 50-60% of that price, you later find out with a real appraisal an item was worth thousands of dollars and picked up for just a couple hundred through successful negotiation.