Pawn Stars is a show on the History Channel where people come into a pawn store and try to pawn or sell their belongings to one of the pawn broker hosts of the show. It’s a lot of fun to watch because the items that come into the store are always interesting, but what’s even better is the back and forth negotiation that ensues when the pawn broker finds out the item is worth some money. From watching the show it’s easy to see the pawn store owners have the position of power (the potential seller needs money not the pawn brokers right?) now because of this power struggle I’ve picked up on a few things that they do that you should keep in mind whether you’re approaching the deal as a buyer or a seller:
Get The Seller To Name Their Price:
On the show the hosts always ask something like, “What are you looking to get for this thing?” and the owner of the item either names a price or says “Make me an offer.” The pawn brokers always side step the request to make an offer and instead try and launch probing questions to force a price out of the buyer. Once they know the price they’re looking for they can work their way down from there.
This is important for a couple reasons. It gives them a figure to work down from and an opportunity to laugh about how much money they’re asking for something.
My Business Application: Whenever possible regardless of the position you’re in of seller or buyer your goal should be to get a price from the other party first. I find this most important when I’m contacting hobby domain owners (the people that just happened to register a couple domain names and are still using an AOL or Hotmail email account tend to be these people in my experience and the experienced domainers always have a Gmail account or company name email.)
Get The Seller To Drop Their Price:
The hosts of the show will usually say things like, “We still need to make a profit on this item so even though the expert told you it’s worth $5,000 we can only buy it for $2,000.” or they’ll say things like “The item is pretty beat up, if it were in mint condition than I could give you the price you’re asking for but I still need to spend a few hundred dollars to replace the gears and repaint / restore the item.”
Now after they have the price they are able to go through a laundry list of excuses why the price the seller was asking for is out of line. This is all for the reason to instill the idea in the seller that, ‘Maybe he’s right. Perhaps this isn’t as much as I thought it was worth?’
My Business Application: When I negotiate a purchase of a website or domain name I always try to negotiate the price downward by sharing things like the search volume for the site isn’t high enough to justify their price, the income earnings multiple of 3x they’re asking for is too high etc. If someone is coming to you to sell a domain name or website etc. than you have way more power than if you’re going to them as an unsolicited buyer but the lesson is the same – always try to negotiate downward.
Flip The Power In Your Favor:
Bottom Line: Regardless of whether you’re the buyer or the seller you need to find ways to flip the power into your favor. If you’re still paying the first asking price for anything you’re making a big mistake. Regardless of how firm the seller is you can always find some wiggle room even if it isn’t in the funding department. I’ve been able to put together some creative deals for websites I’ve purchased to keep the owner own for extra time etc.