What do you think of this guy?:
Guy owns running store but is closing. He has $100K of original cost running shoes and clothing . He advertises it for sale for $90K and he gets a three counter-offers. The highest of which is $60K. Instead of selling he throws all the shoes and dumpster. Do you think this guy is a shrewd deal maker?
Seems too stupid to be true.
Yeah, like $100k of shoes would fit in a dumpster.
Are we talking $100k at MSRP? Like, he's valuing Nike Pegasus at $120 or whatever they're selling for now?
If that's the case, the $60k offer was more than fair. In fact, wholesale on most running specialty items is 50% of MSRP, sometimes less if you do future orders.
If by original cost you mean he paid $100k wholesale, then yeah, those were some low bids. But not crazy low; liquidators typically pay pennies on the dollar for old stock when a business closes down.
But because the story of him throwing out the stock is made up, it doesn't really matter, does it?
No. The story is based on a true story. The $100K is what he paid. He's only willing to take a 10% loss. The way I see it, and I was thinking others would see it to was the guy is making a statement "I will not be taken advantage of". If you won't meet my price it goes to the landfill." The guy is holding his ground. You don't see it? I think it's sick personally but that's shrewd business?
tyjtyj wrote:
No. The story is based on a true story. The $100K is what he paid. He's only willing to take a 10% loss. The way I see it, and I was thinking others would see it to was the guy is making a statement "I will not be taken advantage of". If you won't meet my price it goes to the landfill." The guy is holding his ground. You don't see it? I think it's sick personally but that's shrewd business?
This sounds like fake news. I'm pretty sure there is a process by which dealers can return unsold merchandise to the manufacturer.
As I said, it is based on a true story. I was there. I saw it happen. The guy literally threw away thousands of dollars of product when he could have at least gotten some return.
So I would say it is not shrewd business. When you run a specialty run store, your profit margins are below 40%. So for the owner to expect a 10% loss at worst is quite ignorant, which probably shows why he's out of business.
My run shop went from $200k in the first year to $800k by the end of the third year and we've been profitable ever since. Not sure what happened with your guy. Too much overhead?
No. That is just dumb.
The guy was successful; it's just that he had other business and decided to close down the one business. He just didn't want anyone to take advantage. His thinking is : I would rather throw it away then to get less than what I want.
I don't believe in that at all but it happened and I see the guy's point.
He chose a 100% loss over a 40% loss. Shrewd. Those lowballers will learn to never try to take advantage of his (now non existent) business again.
Sounds like all of his businesses will go out of business in short time. He doesn't know how to make money.
tyjtyj wrote:
What do you think of this guy?:
Guy owns running store but is closing. He has $100K of original cost running shoes and clothing . He advertises it for sale for $90K and he gets a three counter-offers. The highest of which is $60K. Instead of selling he throws all the shoes and dumpster. Do you think this guy is a shrewd deal maker?
In other words “ lowballers go to hell, see what I rather do than taking your pathetic offers, go and start from scratch beatches”
I have 400 pair of Vaporfly 4% for sale .
Where TF is this dumpster??? I want my free $hit!!!!
Assuming this is true -which seems like a stretch- I can understand this guy's attitude, but only up to a point. A few years ago I put my old car up for sale after purchasing a new one. It was a 12-year-old Corolla, but with only 40,000 miles on it, no cosmetic flaws, and it still ran fine. The car had a Kelly Blue Book value of 2 thousand at the time, and I would've taken a grand for it, but everyone who expressed interest in it had to be a smartass and made offers that topped out at $400. I wasn't desperate for money, so after having my time wasted and getting annoyed by one too many of these lowballers who thought they were so shrewd, I junked the car for 50 bucks, with no regrets.
Refusing a $60k offer for $100k worth of merchandise, however, especially in a going-out-business situation, seems foolish.
The guy is an idiot. He literally is a great example of sunk cost fallacy;)
You must be careful when low balling anyone. It is often the end of negotiations.
There was a house for sale for $475k FIRM. I told my wife that there is no such thing as a firm selling price. I offered $400k as a starting point for negotiating purposes. I never got a call back. 2 weeks later I offered the original asking price and was told that they were no longer accepting offers from me. It sold a week later for the asking price. My wife is still pissed at me 5 years later.
Negotiating is tricky wrote:
You must be careful when low balling anyone. It is often the end of negotiations.
There was a house for sale for $475k FIRM. I told my wife that there is no such thing as a firm selling price. I offered $400k as a starting point for negotiating purposes. I never got a call back. 2 weeks later I offered the original asking price and was told that they were no longer accepting offers from me. It sold a week later for the asking price. My wife is still pissed at me 5 years later.
Amateurs are often illogical when it comes to pricing and negotiations. A low-ball offer can bend the sellers' egos to the point that they are irrational about continued negotiation.
What has worked for me is to only make a lowball offer face to face and to present it in a way that saves the seller's feelings. Something like this...
I understand your asking price. It seems fair (or something along this line) NEVER FOLLOW THIS WITH ... "But..." Follow it with, "Unfortunately, my budget is only $xx,000. I just can't afford to go any higher. You might get your asking price, you never know, but I'm here right now and I'll pay $xx,000 in cash. Your time and avoiding the hassle is worth something, right? What do you say? Let's do this for $xx,000 right now."
Usually, they say, "No!" I frown. Pretend to think for a while and then grudgingly up my offer.
You have to judge the insecurities of the seller and present your pitch accordingly. If you're dealing with a professional, it's different, of course. With a pro, it's about time, profit margin, ability to turn over your cash for another vehicle and do it again to make a 2nd profit. I once got a GREAT deal on a convertible by pointing out that it was December and the salesman would probably have to sit on the car until spring to sell it.
Negotiating is tricky wrote:
You must be careful when low balling anyone. It is often the end of negotiations.
There was a house for sale for $475k FIRM. I told my wife that there is no such thing as a firm selling price. I offered $400k as a starting point for negotiating purposes. I never got a call back. 2 weeks later I offered the original asking price and was told that they were no longer accepting offers from me. It sold a week later for the asking price. My wife is still pissed at me 5 years later.
Yes, you must be careful. Guy offered us 605K on the listing day. We waited a few days and received and offer for 646k, very close to our asking price, and NO inspection other than a water test. Buyer No. 1 would have nickeled and dimed us on the inspection report had we accepted his offer. So, while you can lowball, it doesn't necessarily mean you will get the deal. There are other factors that come into play. Also, you should always have a second choice when trying to low ball.