Question

Garage Sale – Information for Buyers                                                                                                

You are roommates and you see an advertisement in the paper listing a piano, oriental style carpet and wooden desk for sale. The piano is what first attracted your attention. You and your roommate are in a band and have just started to write some songs together. It would help to have a piano for composing. You don’t have a lot of money, so you have to find the right one for the right price. So far, you’ve seen pianos that are in bad shape and over-priced, running between 600 and 850.

Although it is the piano you want, you might be interested in the other two items. You don’t have a desk, but it isn’t an urgent need, and the rug is a maybe as well. The two of you have agreed to share the expense and have budgeted 1250 total for the piano and the other items if they turn out to be good shape, but you hope to get them for less. You have an uncle who will move the piano for you for 50 dollars, but he is out of town for the next 10 days. If the seller will not wait, you will have to pay a professional piano mover 200-250 dollars and the seller should have to pay at least half.

You made an appointment and found out that the actual owner is out of the country and his friends will be negotiating the deal. When you get to the seller’s house, you are pleasantly surprised by the piano. It is in excellent condition. It looks a lot better than others you’ve seen. You and your roommate would be willing to go as high as 750 on a piano in this condition. The desk is okay but it needs some refurbishing. You would have to get it for under 300. The carpet is really nice and the color is good. It could use some cleaning but if they’ll let it go for less than 200, you would consider buying it. You are also interested in a music stand that wasn’t listed in the ad. You wonder if the seller might be interested in selling it as well. It looks to be hand carved.

Tips for Both Sides:

-Look at your budget and put together package offers.

-Are there considerations besides the cost of the items?

-Decide what your first offer will be if you plan to make the first offer.

-Any questions for the seller?

Garage Sale – Information for Sellers                                                                                                

You have a mutual friend who was transferred out of the country and asked you to sell a few items he couldn’t take with him. The three main pieces are:

• An upright piano about 10 years old and in good condition. It is a top brand and was tuned only 2 months ago. You value it at 600.
• A wooden desk that was custom made. It is in fair condition. There are a few scratches on it and one water stain. You would like to get 250 for the desk.
• The third item is a 9 X 12 oriental style rug purchased in Greece when your friend traveled there four years ago. The rug It is in good condition but needs a cleaning. You want 200 for the rug.

Everything else is small and of little value. There a few paintings, some books and an old music stand.

Your friend who owns the items said he didn’t know that much about their value but needed to net at least 500 for piano, desk and rug. He has offered to pay you everything you get over 500 for handling the sale. The $30 ad has been your only out-of-pocket expense so far.

You are willing to split up the items but would really like to finish up the sale today. If you keep the items past the end of the week, you are going to have to start paying 50 a week to store the piano. Moving the piano will cost 200 but if you sell it, then that is an expense you will ask the buyer to cover.

You placed an ad in the paper describing the pieces but did not list any prices. You received several inquiries but only one person ended up making an appointment to see the items. It is two roommates and they are coming this afternoon to possibly make an offer.

Questions on Next Page…

NA-3 Questions:

1. Does it matter who anchors on this deal? Why or why not?

2. Outline what you think the buyers should buy and how much they should pay for each item.

3. What item expands the pie? Explain how this is an example of expanding the pie.

4. In this negotiation shipping cuts into the profit. How do you think shipping should be handled?

Answer 1

1. Total budget here 1250. Here, the piano is in good shape, however let us keep the price to the lowest which is 600. This is because, seller could negotiate the price that can go to a maximum 700. Next is table, which shall be fixed a at 100 and the carpet for 50. Total package price subject to negotiation shall be 600 + 100 + 50 = 75. The music stand shall be brought for 50 ounding the total figure to 800. If deal is set, saving from budget would be 450. Transportation cost would cost 100 to 150. Still there is a profit of 300 or more which is great.

2. Piano is in good shape but is a used item. Therefore, it deserves the lowest price in par with market which is 600. The wooden table has a water stain and few scratches. This would devalue the sale to 100 only. Rug also is not clean and hence nothing more than 50 is acceptable.

3. The age of piano, table and rug?. The quality of wood which is made for using table, piano?. Rug was purchased from abroad or local?

4. Yes, it does matter as both parties are looking for profit. Here, the buyer has a set budget and they are looking for an upper hand as to minimize their expense as to have some savings out of the budget.While the seller has certain expenses out of hand such as transportation of goods, rent to be given if goods do not get sales for ore than a week etc.