Self Storage University Podcast: Episode 74

Negotiation Practice Options

To get the price you want on a self-storage property, you have to be skilled in negotiation. So how can you develop and refine those skills? In this Self-Storage University podcast we’re going to review some simple methods to enhance your negotiating ability and get you more fluid in the art of bartering.

Episode 74: Negotiation Practice Options Transcript

They say that negotiating is a lost art. I'm not sure it's lost. I'm not sure most people actually had it to begin with. This is Frank Rolfe with the Self Storage University Podcast. We're gonna be talking about getting negotiating practice in your everyday life, because most of us in America don't get much opportunity to practice the art of negotiating. So how can you get some real life practice in your regular day-to-day life? Well, first off, at night, maybe tonight, go and watch an episode of either Pawn Stars or American Pickers, both on the History Channel, although American Pickers is now also on Netflix. And in fact, feel free to binge-watch a couple episodes. In fact, binge-watch a couple episodes of both, because those shows are nothing but negotiating.

On every show, what you'll see is they go and they meet with someone, the Pickers are out there and looking in the barns of an old farmer trying to find antiques to sell in their store. On the Pawn Star show, people bring them items to the store, but it's always bartering over the price. And the show either wins or fails based on that person's item, based on whether or not they can come to an agreement. So you'll see all the very normal parts of negotiating right before your very eyes over and over and over again. There's probably 10 or 20 negotiations on every show. So you can watch and you can see how it works.

You'll see that someone throws out a price, they typically want the seller to through out the price, they always flinch, no matter what the price is, "Oh boy, that's higher than I thought," another part of negotiating, and then you'll see them go back and forth, and it's very, very instructive. It really kind of gets you in the mood of negotiating, but just watching it that's not going to be enough. So what else can you do? Well, start try to negotiate on everything, because you're shocked, most people figure in America that the prices on things are set in stone, but they're really not. If you go to Neiman Marcus and you look to buying a piece of jewelry, here's the tip is negotiable. If you go to a hotel to check in and you booked a king size bed, not a suite, you can often cajole them into giving you a suite if you simply ask. If you go to the airlines and you wanna upgrade your seat, go and see how much it would cost you to upgrade their seat, they're also a little variable, you can say things like, "Well, but the plane is about to take off, you've got five new seats."

The other day, I converted a coach seat on a Delta flight in to the first class at no cost. I simply went over to the people running the desk and I said, "Hey, it's a late night flight, not a lot of people on this plane, are there?" "No." "And hey, you know what? What do you think about, give me a first class ticket since there's no one gonna be in first class," and they said, "Well, it is true, there's not many in first class, but to convert you to first class, I'd have to charge you this giant amount additional." I said, "Oh my gosh, whoa. That's a crazy price. You would be crazy enough to pay that much for a first class, but it does seem a horrible ways to having those seats just sitting there gathering dust, 'cause when we take off in a few minutes, no one's gonna be in them," and they said, "Yeah, you're right. What the heck? Yeah, okay, you're gonna go ahead and have the seat." Nobody else got one, just me, like three people in the first class others are plane back in coach. Why? Because they didn't try and barter, they didn't try and negotiate, so you'll be shocked how much advantage you will gain in your regular life if you just start negotiating pretty much everything.

You wanna go to a locale where negotiation is the hallmark of the day. Go to a farmer's market, those little markets you see along the road who sell fruits, vegetables, sometimes flowers, everything in there is negotiable. They'll say, "Basket of tomatoes $6." You can go up and say, "I'll give you 4." And they'll say, "How about 5?" And your students see that really the dumb people and they're the ones who aren't negotiating, because everything is completely variable, anything that you want, you can get it at a reduced price if you simply ask.

Also, you can read up a lot of books on negotiation, probably the best one at there is You Can Sell Anything to Anybody by Joe Girard, he held the world record for the most cars ever sold in the United States. It's a great book. It's an easy read. It's not a very long book.

He gives you a lot of very practical suggestions or things he learned on negotiating. Now, be careful if you go out and read a lot of these negotiation self-help books, that you don't get a lot of bad advice, because a lot of times what they're sacrificing is not truly negotiation, but just what's called win-lose strategy, which means you put someone behind the eight ball and they'll typically drop the price in a moment of weakness. For example, if you go and buy a used car on the last day of the month, at the very end of the day, you will get a lower price slightly, because that sales person probably is not hitting his quota for the month and he may get fired, so he really needs your sale bad, and he'll try to bend over further to get it, but that only works in negotiation and moments of weakness. Typically when you're buying a self storage facility, the seller is not in a position of weakness, they often own the thing out right or they have very little debt on it, so you're not gonna be able to cajole them and make them feel insecure and push them to get the lower price, and that's what most of those books are about.

The better negotiation posture, what we call win-win where both buyer and seller are happy, but that does not preclude the art of negotiating that final final prize. Now, another thing you can do is practice as a seller instead of a buyer, that's what Ross Perez dad did with him. When Ross Perez was growing up on his rent somewhere, I think in Texas, what his father did was he would take him all the time to rodeos and other events where there were lots of cowboys there and other livestock people, and he would give him some small amount of cash, and he would tell him to go and take that cash and buy anything he wanted, but then he had to sell it before the end of the day, before they went home.

So let's say he gave Ross Perez $10, Ross Perez would go around and he would see, "Oh, there's some spurs," and those spurs are only $5. I think they're worth more. He'd buy this first for $5, he'd walk around the boots until he found a guy that had a whole bunch of spurs and he'd say, "Hey, I've got some spurs to sell, what do you think about these?" And the guy would say, "Oh wow, those spurs, I'll give $8 for them," and you neted a $3 profit. Then he would go and do it again. He would buy something else. Go around there and try and resell it. The rule was he could only leave with cash, and that's not a bad way to practice up your negotiation skills.

So what do you have to sell? Well, I don't know, you have whatever you've got, and you could try and find out what someone would give me for it. It could be some kind of collectible, it could be something you go to an antique mall to see if someone would give you a price for it, whatever the case may be, try being a seller and see how that goes, even if it's just your kids, maybe they've got Girl Scout cookies they have to sell, get out there and try and be in the position of selling as opposed to buying. It'll help you get a better visibility of what it's like from the other side of the table, when you start talking to self-storage people about selling their facilities, see how it works from their standpoint.

The bottom line to negotiation is you can learn a huge amount about it, if you really apply the skills. If you really wanna jump in there and practice it, you can get pretty good pretty quickly. I know that we all have met in our lives people who seem to be very, very good at bartering, well, they didn't get born that way, they learned it from someone, a mentor, who might have been a relative or a business person, but when you get good at negotiating you get down right dangerous, and you get down right dangerous particularly on self-storage facilities, because often there is no pricing guide, there's no NATO blue book. Everything is open to discussion. Open to negotiation, nothing is firm. So if you know how to manipulate that price, if you know how to go to the seller and work with them to achieve a price, but it tries a little better for you than when you started, then you're really getting somewhere with your negotiation. This is Frank Rolfe with the Self Storage University podcast, hope you enjoyed this. Talk to you again soon.