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Re: Dark_Moon - more on the negotiation process
Got it. Sometimes you win. Sometimes you win less. Occasionally you lose. And sometimes you win big. The goal is to move toward the latter. And thanks for the numbers. I know it is all variable but, it helps to have some arbitrary 'benchmark'. Moon

posted by magic_moon on July 11, 2008 at 11:09 AM | link to this | reply

Dark_Moon - more on the negotiation process

As a middle man, you have to keep your eye on both the supplier and the buyer but especially the buyer. Buyers generally speaking, have no qualm at all about beating you out of your commission to save a buck. I am always cautious about exposing the buyer to the supplier, as often as possible I will drive them to the machine inspection. If I am advertising online and shipping calculations are necessary, I will post the postal or zip code from the nearest Wal-Mart or other landmark. This I learned the hard way with a buyer from eBay doing a reverse look up of the postal code and approaching the machine owner on his own. Fortunately my relationship with the owner saved some of my commission but of course he saw the amount so it was greatly reduced.

Developing these relationships takes time but eventually you can build a list of suppliers that understands that if you make money, you can continue to sell items on their behalf. My best relationships protect my client list even further in that they will contact me when a client attempts to go direct to them for future purchases. A general understanding of how the money is split in a deal is important as well. Bird dog fees are $200 to $500 dollars depending on the price of the item. Finders fees are up to 3% or 4%, commissions start at 5% but I prefer as I mentioned, to work as much as possible with net numbers. I never agree to "split above" an arbitrary number as it always, without fail, insures that the seller will make less simply by exposing the selling price to the item owner. An ideal situation is where both the item owner and the buyer are ignorant of all other dollar amounts except that which pertains to them. It takes some finesse to accomplish this but these days I manage to do it more often than not.

posted by gomedome on July 11, 2008 at 10:39 AM | link to this | reply

Re: Dark_Moon - there are some differences between purchasing as a reseller as
..thanks Gome..moon

posted by magic_moon on July 11, 2008 at 10:12 AM | link to this | reply

Dark_Moon - there are some differences between purchasing as a reseller as

opposed to being an end user.

It is also inevitable that occassionally you will get burned by either the product owner or more likely the end user but this becomes less likely as you gain experience and develop supplier relationships.

I tend to separate price negotiations into two segments, getting a good net number to work with and then final details when a deal is on the table. Getting the net number from the product owner is the key, it is also inevitable that negotiation will erode your margin. The trick is not to get beat up too badly.

The way I approach new suppliers is with an almost standardized speil. After telling them I am a dealer, I tell them that one of my clients has an interest in the item (whether it is true or not) and additionally I have a few other leads. I ask them what they allow in the price they are asking as a reseller's discount, how low can they go (what would they accept) or if they would accept a reasonable offer. This exercise generally tells you all you need to know about the supplier. If they say something stupid like "bring the client to me and we will make a deal" ....move on, you are dealing with an amateur.   

If the asking price is ridiculous and subsequently the net number is unworkable, sometimes you have to let the item owner come to market reality on their own. I've had people contact me as long as 18 months after initial contact with a price that reflected market reality.

The end user is the one you really have to watch. . . . more on this later.

posted by gomedome on July 11, 2008 at 6:25 AM | link to this | reply

Gomedome, Query: once you find the item(s) that you want to sell, how do you get the owner to commit to the best price when you are not making an immediate offer for cash. Restated: my experience with bargaining is that if you want to negotiate the very best price, you must say something equivalent to this: "I have cash. I'm ready to buy now." Basically, the resale position is: "I may have a buyer at some future date. What is the best you will do if I bring you a buyer?" I've never seen this produce a whole lot of incentive to secure the 'best' price. You're going to be putting some price on the merchandise on your website so you have to know what you will be paying for the product. Corollary question: If it is an area you are unfamiliar with or specialized machinery, how do you (not being in the industry) know what a good price is? Once you set a price, especially with expensive items, people always want to haggle. So, now you've got a situation where some third party owns the item, your buyer wants to inspect, he wants to haggle. I know you've done this very successfully. Just having a hard time seeing how you handle the real seller and the real buyer. Or do you get the seller to commit to fixed or percentage broker's fee and let him negotiate? Moon

posted by magic_moon on July 11, 2008 at 2:01 AM | link to this | reply

Dark_Moon - I fixed the link
There is a great deal that can be done for free with free classifieds and other sites like that. They can be both sources and selling venues.

posted by gomedome on July 7, 2008 at 8:16 AM | link to this | reply

Gome, the eclassifieds4u link wouldn't open. I typed the URL in to my browers address bar and it worked. I've been looking around for sources. Sometimes I tend to spend to much time collecting data instead of just jumping. I learned a couple of decades ago the value of jumping but, sometimes it still takes me awhile. Plus, there were the pressing financial issues. I may have the most urgent part of that partially resolved tomorrow, which would give me a couple of days breather anyway. Hope to nail down a source or two. Still having issues with the sourcing part. Should work it out this week. All of this is most valuable. Moon

posted by magic_moon on July 7, 2008 at 2:20 AM | link to this | reply

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