Tuesday Tips: Bid Your Way to a Lower Price

How many times have you told a friend the price you paid for a recent home project, only to be told that they had a similar project completed for 10 percent less? Newman! That's happened to me a few times and it doesn't feel good. Washington Checkbook Magazine pushes the concept of competitive bidding, which allows you to get the best possible price on the priciest of transactions. Robert Krughoff, editor of the magazine, recently offered me some pointers on how to bid and when. Here are his tips:

Tip #1: Use competitive bidding before plunking down big bucks for expensive items or services. Krughoff says the way to use competitive bidding is to contact several firms and ask what their best price is on the item you want to buy or the service you need done. Let the firms know you're doing this and ask them to give you their best price. "In competitive bidding, the major threat to the business is that you'll go somewhere else," he says.

Tip #2: Competitive bidding can be used for more than just a renovation project on your house. Consider the strategy for hotels, men's suits, furniture, carpeting and dental procedures. "In many cases these folks can't do enough business and therefore are willing to compete," Krughoff says.

Tip #3: In competitive bidding, never tell the businesses what prices you're getting or what price you want to pay. Just get your list of prices and go with the lowest. "The only way to find out what a good price is is to see what the market will bear," he says.

Tip #4: Competitive bidding is for people like me who are intimidated by negotiation, which is outright asking for a lower price. Competitive bidding is less aggressive, allowing the shopper to just say something like, "I'm going to be contacting several places and I'd love to hear the best price you can give me." Simple and straight forward. I can do that.

Tip #5: If you do decide to pull out your negotiation skills, think of a good reason for the store to give you a lower price such as the fact that you're a senior citizen or you drove 100 miles to shop at the store. "If you're negotiating, the major threat is that you'll not buy at all," Krughoff adds.

Tip #6: If a business says they won't negotiate on price, consider asking for the other perks or services they could provide. For example, a car rental company may be willing to pay for a tank of gas.

Have you ever used competitive bidding to get a low price? What were your strategies to make it work? Post a comment below.

On another shopping subject... have you ever bought groceries online? I'm not talking about Peapod or Safeway but online-only businesses like Netgrocer.com? If so, please tell me about your experience at shoptoit@washingtonpost.com.

Also, are you doing the Fiscal Fast with me this week? I'm one day into it and so far my Mastercard is snuggly tight in my wallet. Only six more days to go...

By Tania Anderson |  July 8, 2008; 3:00 AM ET Tuesday Tips
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