Wednesday, October 5, 2011

The Art of Negotiation - Where To Begin

Trading horseflesh is a difficult thing to do; it has evolved into an art form over the past centuries in which humans have relied on horses as a means of transportation, conveyance of goods, war and prestige.  And while the means we have to help us sell horses has improved over the years, with the invention of photography, video and the internet, the actual dance of negotiation between the buyer and seller hasn't changed much at all.  It still comes down to how much the seller is willing to take, and how much the buyer is willing to give.  In between asking these questions and getting them answered, there is some gambling involved, some emotion, and even the occasional bluff.  For those who are seasoned horsemen, the task of getting a horse sold can be daunting, but laid in the lap of the amateur horse owner, it can seem overwhelming.

It is very easy for an owner in this situation to become overly reliant on a trainer's advice.  They are the expert in the business, and many new owners, or owners with a more casual interest in the sport, trust that trainers understand their wishes regarding their horses, and will translate those wishes into a smart sales plan.  They want to believe that the trainer has the owner's best interests in mind.  So often they are completely at the trainer's mercy; perhaps they live out of state, and can't see the horse in question first hand.  Perhaps they are too busy with work and life to spend much time analyzing the horse market and where their horse fits into it.  Or maybe they are in a financial position that requires an immediate dispersion of their herd.  In any case, the trainer is in the position of power in the relationship.

So you have a horse in training and for whatever reason, you make the decision that the horse needs to be sold.  You let your trainer know, and the very next question asked is, "What do you want for him?"  How do you proceed?  How are you supposed to know the 'right' price?  Setting the price too high could result in the horse sitting on the market, and setting it too low not only loses money, but also peace of mind.  The trainer is usually your link to expert opinion, but you still need to be aware that the trainer is in the business to make money.  If you have a good enough horse that the trainer would like to keep in his/her barn, they may want to find a deal where they can not only make a profit off commission in selling your horse, but also in future training/showing fees from another client in their barn.  It doesn't always pay to price a horse at what it is really worth when the future training fees far outweigh the sales commission.  This happens with breeding stock as well as performance horses.  Any trainer would love to come across a nice little broodmare sitting in someone's pasture  who is an own daughter of So-And-So where the owner has no idea of her real worth.  They buy her cheap and either keep her for themselves or resell her for big bucks.  There is a wide variety of scenarios that happen everyday in the horse industry, and while many of them are not illegal, there are plenty more that are borderline unethical.  Horse trainers come in every stripe; some are impeccably forthright in their dealings, others would sell their grandmothers for a buck.

The best advice?  Do your best to select your trainer carefully in the first place.  Take the time to talk to people in the area who can give you an idea of how a particular trainer operates.  Recognize that you have to be able to trust a trainer to make decisions in your place, and the placement of that trust requires more information than "a gut feeling."  Talk to vets, neighbors, former customers, current customers, local breed/show committee members.  Don't expect people to gossip with you, but if someone isn't a trustworthy business person or isn't kind to their horses, you will hear about it.  It will come out somewhere.  Here's another truth: when you first meet a trainer, and visit their barn, they are going to be nice to you.  Of course!  They want your business!  And while it is wonderful to be welcomed, remain circumspect.  Ultimately, this is a business transaction, and emotion should not be part of it.  So many people fail here... Every good horse trainer knows, "horses are bought and sold on emotion," so they become experts at playing those emotions for their benefit from Day One.  (Anyone selling luxury goods does...)  So try to find a trainer that moderates the relationship with their customers with honesty, and by listening to their conscience.

Secondly, take the time to know what you have in your stock.  The more information you have, the less you are at the mercy of someone else making decisions for you.  There are plenty of resources online for pedigree and performance information, and breed associations can direct you toward your appropriate source.  Check what similar horses are going for by searching ads, both locally and nationally.  Enlist your horsey friends' help, and get more than just a second opinion.  You may need several opinions in order to come to a true analysis of what your horse is worth, and where to market him.  If possible, find a professional horseman within your horse's competitive genre, and see if they would be willing to evaluate the horse for you.  This must be done delicately of course, as you do not want to insult your present trainer.  It is best to simply say, "I'd like to get several points of view before settling on a price."  Keep in mind that whomever you ask to give this second opinion should be a neutral party, so as to not create a competitive atmosphere.

Evaluating your stock requires an unbiased eye and an objective standard of judgement.  Your emotions toward the horse DO have a value, but only to you.  The buyer may also have emotions regarding your animal too, but don't count on them overlapping perfectly.  Do your best to honestly quantify your horse's strengths and how each of those strengths add up to a sale price. And be honest with yourself regarding your motivation to sell.  What is the most important factor in selling the horse?  If it is getting what the horse is truly worth to you, be prepared to wait it out.  If the most important thing is to get the horse sold quickly, give the sale a deadline, and adjust the horse's price accordingly.  Make sure your trainer knows that deadline.  If you are open-ended, the 'sale' of a horse can go on forever, and drain money away from your horse budget.

And lastly, don't be afraid to speak up and ask questions, and keep asking questions throughout the process.  Anyone who blows you off, or makes you feel silly for asking a question may not have your best interests at heart.  The next time you hear a horse trainer ask you "How much do you want for him?"  understand that they already know what he is worth.  What they are asking you is "where are we starting this negotiation?" It is OK to turn around and put the ball back in their court, and ask, "Well, what would you be willing to give me for him?"  but know that you will then be giving up the ability to name the starting point, which is where the advantage is.

I am hoping this line of thought gives you a wider perspective on negotiating a horse deal.  Soon, I will look at the art of saving face, and how that pertains to selling horses.  Thanks!  Have a great day!

PS - I really loved the scene in "True Grit" when Hailee Stanfield's character Mattie Ross deals with the town horse trader in a very mature fashion.  If only we could all be such great hagglers!!