Negotiation

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Triple digit golfer
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Negotiation

Post by Triple digit golfer » Sat Jan 16, 2010 3:09 pm

I frequently see people on this forum and in books say that "anything is negotiable."

I am trying to work some negotiation into my life and so far, I'm not having much luck.

One of the biggest areas I'd like to be able to negotiate is car repairs. They charge $125/hour for labor at the place I go.

I had a car repair that was quoted at $285. Parts $80, labor $188 (I checked, the guy said the repair takes 1.5 hours), tax on the parts of $7.80, and disposal charges of $9.60.

I told the service manager (the actual manager, not just the manager on duty), "That price isn't going to work for me. What can you do for me?"

Him: "That's our price, we can't bring it down."

Me: "Midas will do the same repair for less. What's the best offer you could make to me?"

Him: "I'm sorry, sir, that's our price. Here you're getting genuine Honda parts. Midas may use aftermarket parts which are not covered..." blah blah blah.

Me: "No, they use manufacturer parts, the same ones you guys use here. I would never use aftermarket parts on my car and will be sure any repair that's done uses Honda parts"

Him: "Sir, I'm really sorry but this is all we can do. Would you like us to do the service or would you like us to bring your car around for you?"

So...I had him bring the car around and I left. I went down the street and tried the same thing. I got similar answers after trying to get a better deal on their quoted price. "This is the best we could do, would you like the service performed or not?"

Has anybody had any luck in negotiating car repairs? It seems these two places are unwilling to lower prices at all and are 100% willing to let customers walk. That seems silly, as their profit margins are so high, lowering my price 50 bucks will still net them a nice profit on the sale.

How about other things? Furniture, cars, or even small things like pizza from local independent places?

For larger purchases (furniture and cars, particularly), does flashing a huge wad of $100 bills help?

If a car is quoted at $20,000, salesman "gets it down" to $16,500 and that's "the best I could do," if I then pull out $15,000 in $100 bills, will that best price they could give me suddenly change?

waitforit
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Post by waitforit » Sat Jan 16, 2010 3:38 pm

Is the shop always full of paying customers?

If yes, thats your answer, and the key to how successful your negotiating is likely to be.

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Post by Gekko » Sat Jan 16, 2010 3:47 pm


DSInvestor
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Post by DSInvestor » Sat Jan 16, 2010 3:48 pm

We recently did a car repair (transmission bearings and clutch). We went to a shop got a quote and was very comfortable with the folks there. We were also comfortable with the price quoted. We then went to a second shop and got another quote. We were less comfortable with the second shop but the price was several hundred dollars lower. We went back to the first shop with the second quote and asked if they could do anything for us. The first shop lowered their price. We thanked them for working with us and gave them the business. The owner of the first shop thanked us for giving him the opportunity to compete for our business. It took us about 1 hr to get the two quotes.

tibbitts
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Re: Negotiation

Post by tibbitts » Sat Jan 16, 2010 4:09 pm

Triple digit golfer wrote:I frequently see people on this forum and in books say that "anything is negotiable."

I am trying to work some negotiation into my life and so far, I'm not having much luck.

One of the biggest areas I'd like to be able to negotiate is car repairs. They charge $125/hour for labor at the place I go.

I had a car repair that was quoted at $285. Parts $80, labor $188 (I checked, the guy said the repair takes 1.5 hours), tax on the parts of $7.80, and disposal charges of $9.60.

I told the service manager (the actual manager, not just the manager on duty), "That price isn't going to work for me. What can you do for me?"

Him: "That's our price, we can't bring it down."

Me: "Midas will do the same repair for less. What's the best offer you could make to me?"

Him: "I'm sorry, sir, that's our price. Here you're getting genuine Honda parts. Midas may use aftermarket parts which are not covered..." blah blah blah.

Me: "No, they use manufacturer parts, the same ones you guys use here. I would never use aftermarket parts on my car and will be sure any repair that's done uses Honda parts"

Him: "Sir, I'm really sorry but this is all we can do. Would you like us to do the service or would you like us to bring your car around for you?"

So...I had him bring the car around and I left. I went down the street and tried the same thing. I got similar answers after trying to get a better deal on their quoted price. "This is the best we could do, would you like the service performed or not?"

Has anybody had any luck in negotiating car repairs? It seems these two places are unwilling to lower prices at all and are 100% willing to let customers walk. That seems silly, as their profit margins are so high, lowering my price 50 bucks will still net them a nice profit on the sale.

How about other things? Furniture, cars, or even small things like pizza from local independent places?

For larger purchases (furniture and cars, particularly), does flashing a huge wad of $100 bills help?

If a car is quoted at $20,000, salesman "gets it down" to $16,500 and that's "the best I could do," if I then pull out $15,000 in $100 bills, will that best price they could give me suddenly change?
I think it depends on whether the person you talk to has money at stake and authority do make a deal. For example, a customer came to me for a job where my rate was $600 and asked me to do it for $360. And they said that was all they could pay. I said yes (unless I had the probability of something else to do at the time), because to me it was a choice of $360 or probably earning zero for that day or week or whatever. If the person you talk to makes $15/hr no matter how much business the shop does, you can save your breath. I have not had success in escalating the negotiation to the level where it matters, because the other problem you have is that if a person is important enough to make that decision,it may also be that the amount of money at stake won't matter to them one way or the other, so they just won't want to deal with it. You need that situation where, like with me, the person who has the power to decide also cares about the amount of money involved and is really impacted by it.

I will say that in fairness to a car dealer, they may have some investments that a shop like Midas may not, and they may also be getting beaten up by the manufacturer on warranty repairs, and need to make it up elsewhere. They may have essentially unlimited amounts of lower-profit warranty business that they can fall back on whenever they don't have higher-profit work, so if you cut the amount down maybe they would rather have to deal with the manufacturer. When our vehicle was under warranty it would just sit at the dealer (didn't matter which one) for days and days and days before anybody would look at it, so I'm assuming they took higher-profit work in and did the warranty stuff when they were bored. Maybe if you'd let them keep your car for a month or two and just do the work when they felt like it, that would motivate them, if they have a huge storage lot. But I'm not in that business so I'm just guessing.

Paul

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Post by livesoft » Sat Jan 16, 2010 4:17 pm

I reported on this before: Our crap Ford Taurus needed an A/C repair just after going out of the warranty period. It's my wife's car, so I sort of don't care about it as long as I don't have to drive it. She reported to me what they wanted for repair and I was livid. I wrote a letter for her to give them which went something like this:
Dear Ford,

I'd like to thank you for providing the best service and a reliable vehicle in the new Ford Taurus that my wife drives. But I can't do that because the vehicle is not reliable and your service is lacking.

Here's why ....

I am happy to use our Ford Taurus without A/C for all our car pools and anytime we need to drive friends and family around town and to the airport. I am sure they will enjoy the reliability of Ford that we have come to expect in the 98 deg heat and 100% humidity that is common now.

If you feel this is not right and we hope you do, then please repair our A/C at no charge.
In the end they knocked a substantial amount off the repair bill. I forget now if the gave us the parts free or the labor free.
Last edited by livesoft on Sat Jan 16, 2010 4:21 pm, edited 1 time in total.

expat
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Post by expat » Sat Jan 16, 2010 4:21 pm

Herb Cohen's book on the subject is really sensible and practical

You Can Negotiate Anything

Triple digit golfer
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Post by Triple digit golfer » Sat Jan 16, 2010 4:30 pm

Thanks to all, I will try to find that book...even though the title is misleading. I'm sure I can't go into McDonald's and try to negotiate my value meal down a few cents. But I get the point...MANY things are negotiable.

tibbitts
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Post by tibbitts » Sat Jan 16, 2010 4:34 pm

expat wrote:Herb Cohen's book on the subject is really sensible and practical

You Can Negotiate Anything
I should probably get that book.

But in the meantime, I see that a Taxact business/personal bundle has gone up from $45 last year (since I can remember) to $55 last year. Somebody tell me how to negotiate it back to $45 (or less than $55), please.

Paul

Harold
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Post by Harold » Sat Jan 16, 2010 4:37 pm

I can't so much speak to car repair (except that when my first car was aging, a local guy did my work and that was totally just us talking about the costs and agreeing on a fair price). But I can comment in general on what works for me.

First, talk to the right person. A minimum wage guy at the counter probably doesn't much care. Second, fully consider their needs. I've found that when I've got a legitimately fair request, and clearly communicate it to the right person in a way that fully recognizes their needs, I get good results.

Though I've found ways that work, I'm still trying to master this soft skill in general (which applies to any human interaction, beyond just getting a better price). So I'll be interested in seeing other comments.

dbr
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Post by dbr » Sat Jan 16, 2010 4:41 pm

I don't need to negotiate with my car repair guy because I have been with them for twenty five years and neither I nor they are going anywhere if either of us can help it.

livesoft
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Post by livesoft » Sat Jan 16, 2010 4:47 pm

TDG, think about how you have negotiated on this forum. You may not think you are negotiating, but in many instances you are. On the $50,000 thread, you have maintained that everybody must be lying. Since you told everyone to their face that they needed one haircut per month, 3 bottles of shampoo, and a fresh razor everyday in no uncertain terms. You did not agree with anybody.

You were not nice. I imagine that is your personality and it comes through with everyone you interact with. It came through on your very first 2 threads on this forum as well. That puts you at a disadvantage when negotiating.

When I read your Midas thing, I was thinking, "Why didn't this guy just go to Midas in the first place? Why is he wasting his time?"

Now the proper response to this post is to agree with it and thank me for posting and telling it like it is. That's negotiating.

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dual
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Post by dual » Sat Jan 16, 2010 4:56 pm

tibbitts wrote: But in the meantime, I see that a Taxact business/personal bundle has gone up from $45 last year (since I can remember) to $55 last year. Somebody tell me how to negotiate it back to $45 (or less than $55), please.

Paul
I do not know if you are serious, but if you are:
a. do you really need this 'bundle'? Maybe a lower cost package will fill out the forms you file.
b. many companies offer discounts on tax programs for their customers. Vanguard offers a downloadable and online Turbotax Deluxe (fed/state free fed efile) free for Flagship and at a reduced price for Voyager clients. Fidelity also has discounts for their customers as do (did? I have not checked this year) State farm bank.
c. check fatwallet.com. They post reduced price deals on tax software.

Triple digit golfer
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Post by Triple digit golfer » Sat Jan 16, 2010 7:00 pm

livesoft wrote:TDG, think about how you have negotiated on this forum. You may not think you are negotiating, but in many instances you are. On the $50,000 thread, you have maintained that everybody must be lying. Since you told everyone to their face that they needed one haircut per month, 3 bottles of shampoo, and a fresh razor everyday in no uncertain terms. You did not agree with anybody.

You were not nice. I imagine that is your personality and it comes through with everyone you interact with. It came through on your very first 2 threads on this forum as well. That puts you at a disadvantage when negotiating.

When I read your Midas thing, I was thinking, "Why didn't this guy just go to Midas in the first place? Why is he wasting his time?"

Now the proper response to this post is to agree with it and thank me for posting and telling it like it is. That's negotiating.
You are really hung up on those toiletries! This has nothing to do with negotiating, but please show me where I said anybody needs any of those things (haircut once a month, three bottles of shampoo per month, or a fresh razor every day). Like this, that thread had nothing to do with negotiating. I was not trying to get anything out of anybody for my personal gain; I just happened to think people were forgetting a lot of small expenses. Never did I accuse anybody of lying.

Now the proper response to this post is to prove those accusations you made or thank me for posting the truth and showing your lies.

Back to the topic at hand: You said:
When I read your Midas thing, I was thinking, "Why didn't this guy just go to Midas in the first place? Why is he wasting his time?"
In that case, why would anybody negotiate at all? Shouldn't the response always be, "If you could get it cheaper somewhere else, just go there in the first place."?????
You were not nice. I imagine that is your personality and it comes through with everyone you interact with. It came through on your very first 2 threads on this forum as well. That puts you at a disadvantage when negotiating.
Oh come on, Livesoft, I'm a nice guy! :)

Besides, whoever negotiated something, got what they wanted, and had the other party saying, "Boy, he really was a nice guy?" No! When you lose negotiations or give in, it's probably not because the other person was nice. I would imagine it's because they were stubborn and pushy, no?

What were the first two threads and more importantly, how do you remember them when I don't?

I thank you for your opinion on all of this!

p.s. What the heck happened to the Arizona Cardinals?

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Re: Negotiation

Post by LadyGeek » Sat Jan 16, 2010 7:23 pm

Triple digit golfer wrote:For larger purchases (furniture and cars, particularly), does flashing a huge wad of $100 bills help?

If a car is quoted at $20,000, salesman "gets it down" to $16,500 and that's "the best I could do," if I then pull out $15,000 in $100 bills, will that best price they could give me suddenly change?
I used to sell stuff at flea markets. Someone would offer me a way lower price than what I was asking. They'd say "look - cash!!" Don't insult me. IOW, not a good idea and it's somewhat insulting to the seller.

At the car dealer, I ask very politely if they'd do something for me. Most of the time, they do.

p.s. Nothing Warner could do about it, either. I'm still wondering what happened to the Eagles.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Post by imagardener » Sat Jan 16, 2010 7:44 pm

There are many elements to negotiating but to my mind there are 2 major:

1. How you start your negotiation.
A friendly opening is "I'd like to buy _____ today if there is any way the price could be lower" with a smile. Don't name a price, let them respond first.


2. Talk to the right person. Find out who has the authority to lower a price without being rude to the person in front of you. That's a mini-negotiation.
Who has authority: small business owners (all types including flea markets) and managers in commission-based big ticket businesses like car sales.
Real estate is especially negotiable and we've had the best success dealing directly with the listing agent who has the most to gain with a direct sale (earning both sides of the commission). Commission rates are not written in stone, no matter what some people say.

Pleasant attitude is everything. A good deal has both sides feeling like they were the winner.
I do not think everything can be negotiated or should be. I want the best doctor and best lawyer and don't want to haggle on price, but do expect best results.

I.M.Agardener
retired small business owner who negotiated

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dm200
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Post by dm200 » Sat Jan 16, 2010 9:29 pm

Sometimes and for some things, the value of negotiating (or schmoozing) comes from an increase in goods and services supplied rather than a lowering of the price. Maybe it is a free dessert at a restaurant you frequent, or some extra when your car is serviced. I will admit I am not very good at negotiating, but I do have more luck with extras than lowering the bill or price.

When considering purchases, you might say, "Are there any ____ at a lower price? Or, "Are there any ways we can keep the total below $ ________?" A straight and blunt attempt to get a lowered price or bill often rubs the person the wrong way (or is something that person can not do). Find something they CAN do. Perhaps, by being nice, you can get the credit card rep to back out the late fee.

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Post by rustymutt » Sat Jan 16, 2010 9:45 pm

Learn to play one shop against another, and you've figure out the game my friend. Never pay a premium when you don't have to.

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Post by tibbitts » Sat Jan 16, 2010 10:26 pm

dual wrote:
tibbitts wrote: But in the meantime, I see that a Taxact business/personal bundle has gone up from $45 last year (since I can remember) to $55 last year. Somebody tell me how to negotiate it back to $45 (or less than $55), please.

Paul
I do not know if you are serious, but if you are:
a. do you really need this 'bundle'? Maybe a lower cost package will fill out the forms you file.
b. many companies offer discounts on tax programs for their customers. Vanguard offers a downloadable and online Turbotax Deluxe (fed/state free fed efile) free for Flagship and at a reduced price for Voyager clients. Fidelity also has discounts for their customers as do (did? I have not checked this year) State farm bank.
c. check fatwallet.com. They post reduced price deals on tax software.[/quote
I mentioned it because it was something I was actually going to buy today. The business software is now $40 and it's $14 more for the package. I'm not aware of cheaper business software, and I just got in the habit of paying a little more for the personal federal and state versions. In the current environment it really seems kind of outrageous to have such a gigantic price increase, and because of that it seems like it's an example of something that could be negotiated back down if anything could be. It's like the price of AAA membership. AAA seems to go up every year when prices otherwise are supposedly stable. So I was asking for a general approach to that kind of situation.

Paul

musbane
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Post by musbane » Sat Jan 16, 2010 10:43 pm

Back when I was working I visited my counterpart in Hong Kong, a British ex-pat. Among other delights, he took me shopping wherupon I bought a new pair of designer prescription glasses. When told the price, I was shocked at how low it was and reached for my wallet. My friend almost broke my arm to stop me and proceded to negotiate the price down by a whole lot.
I had always payed the asking price. I guess its how I was brought up.
But I understood the I was in a different culture and did it his way for the rest of my stay in Asia.
A few months later he visited me here. I was astonished to see him try the same game here - and shocked at how often it worked.
I always try now. Sorry, Dad.
edit ; I don't know if the glasses frames were a fake, but I'm wearing them right now as we speak 20 years later.
Last edited by musbane on Sat Jan 16, 2010 10:46 pm, edited 1 time in total.

SteveB3005
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Post by SteveB3005 » Sat Jan 16, 2010 10:45 pm

dm200 writes,
.....the value of negotiating (or schmoozing) comes from an increase in goods and services supplied rather than a lowering of the price.
This defines my approach 95% of the time, I work with a lot of people in the trades and for that type work it is poor etiquette to try and beat someone down on price.

Many times a job calls for both materials and labor. Most often on materials, contractors don't have much wiggle room unless they drop down in quality or cut corners, which is the last thing I want to happen.

Time is much more negotiable and phrases like,"Can you also include this for that price?" or "While your there can you take care of blah,blah,blah, for what you quoted?", will work well.

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Post by Harold » Sat Jan 16, 2010 11:24 pm

Whether it's true or not, my impression's been the same as livesoft's. I thought a similar thing on the "why haven't I gotten the raise/promotion I deserve" threads.

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Re: Negotiation

Post by cacophony » Sun Jan 17, 2010 12:23 am

Triple digit golfer wrote: For larger purchases (furniture and cars, particularly), does flashing a huge wad of $100 bills help?

If a car is quoted at $20,000, salesman "gets it down" to $16,500 and that's "the best I could do," if I then pull out $15,000 in $100 bills, will that best price they could give me suddenly change?
For buying cars, revealing that you're paying cash will hurt you not help you. There are two reasons:

(1) One of the four main ways a dealership makes money is in financing. By paying cash you're eliminating that possible source of revenue, which they will offset by asking a higher price for the car.

[As an aside, the four ways a dealership makes money are: profit from car, financing, add-ons (extended warranty, etc), and trade-in]

(2) Paying cash over a certain amount ($5k?) creates a lot more of a paperwork headache because of the extra verification they must do.
Last edited by cacophony on Sun Jan 17, 2010 12:31 am, edited 2 times in total.

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Blue
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Post by Blue » Sun Jan 17, 2010 12:24 am

My personal experience is that anyone willing to negotiate something like the price of a car repair is probably going to be a more difficult customer to please, more likely to be upset and litigate if something should go wrong. 20% of the customers cause 80% of the problems. This is even more true when somone approaches it from a "win-lose" mentality IMO.

Not only would I be inclined to not negotiate downward, but perhaps secretly hope that customer went elsewhere.

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Post by ickeal » Sun Jan 17, 2010 12:37 pm

Your ability to negotiate successfully comes from your personality.

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Post by LesterFreamon » Mon Jan 18, 2010 12:17 am

It's best to handle some negotiations over the phone or through email. Some folks are poor negotiators in person while others don't seem to miss a beat. When your car is already at the shop with you physically there and both parties agree that repairs are needed, your bargaining strength and position is rather weak. If, however, you know what repairs you need and can get estimates for 3-5 shops over the phone, you can successfully negotiate a reduction in price.

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Re: Negotiation

Post by mtl325 » Mon Jan 18, 2010 1:16 am

Triple digit golfer wrote:I frequently see people on this forum and in books say that "anything is negotiable."

I am trying to work some negotiation into my life and so far, I'm not having much luck.

One of the biggest areas I'd like to be able to negotiate is car repairs. They charge $125/hour for labor at the place I go.

I had a car repair that was quoted at $285. Parts $80, labor $188 (I checked, the guy said the repair takes 1.5 hours), tax on the parts of $7.80, and disposal charges of $9.60.

[. . . .]

How about other things? Furniture, cars, or even small things like pizza from local independent places?

For larger purchases (furniture and cars, particularly), does flashing a huge wad of $100 bills help?
As a general rule I will only attempt to negotiate if I am purchasing a discretionary or commoditized item and the price is in excess of 500 dollars. I think a $285 car repair really isn't worth anyone's time to negotiate because your best case is maybe a 10% discount. For the hassle I can't see the mechanic putting up with it.

I think reading some negotiation materials would help out, understanding the central concepts such as BATNA (best alternative to negotiated agreement) will help. Considering the time value of the average working person, exceeding more than two relatively equivalent quotes is a waste. Now a 2k engine rebuild might be a different story, but within the parameters of your hypo, you're wasting money; yours and the mechanics'.

I've found that the 'cash money' approach to negotiation will only work in a transaction with an individual who is desperate for money. And let's be honest that doesn't happen often. Maybe contractors, but that increases the likelihood that a substandard contractor is hired. And the ability to collect in the event of incomplete or poor work is diminished, as even if you can locate the contractor for service, he/she probably won't have any money to collect if they are in such need of cash in the first place.

Negotiating for pizza or groceries goes against the discretionary spending idea, and just isn't acceptable in civilized society. Just think about the Vanguard model, if everyone called the CSR's in order to negotiate ER's, then by simple logic ER's would be higher for everyone due to increased costs through hiring additional CSR's and infrastructure to handle a multi-rate model.

expat
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Post by expat » Mon Jan 18, 2010 1:48 am

I doubt you will be able to negotiate a better price at national franchise like Midas - they have corporate rules to follow. Instead you could check with individually owned shops.

Also, I would probably call to get a quote before driving in. If you drive in you are already at a disadvantage because you have invested your time and they know it.

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