When we hear the term competitive bidding most of us think about auctions. Whether it’s a silent or live auction at a charity event, or perhaps eBay, we have a pretty good idea how it works. Simply, it is the act of soliciting or making multiple offers for a good or service. It usually involves multiple parties competing against one another to win something of value.
There is a flip side to competitive bidding though. Rather than wanting to drive the price up, you strive to drive the price down. The goal is to get the best product or service for the lowest price possible. Real Estate leases and construction services are great examples of when it pays to competitively bid. Landlords and contractors would prefer to have no competition. They would have us believe we can make our best deal if we deal directly just with them.
Landlords and Sellers have a good reason not to like competitive bidding; it costs them money! Not only do they not like it, they try to make us fell guilty or uncomfortable if we suggest we want to pursue alternatives. That’s okay. They don’t have to like it. There is nothing illegal or immoral about bidding for the lowest cost. After all, it is really about how we chose to spend our own money.
In addition to the savings, there is an important added benefit. Competitive Bidding usually leads to a great insurance policy. When we get down to our two or three finalists, we end up with a strong #2 backup if our first choice falls out. Without skipping a beat, we can steer back to a runner-up. Best of all, at that point the negotiation is all but completed.
Bottom line – Competitive Bidding is a win-win for negotation. So, be smart with your strategy and your money.