What Does OBO Mean in Sales? Complete Guide & Tips

Negotiating deals and closing sales can be tricky, especially when acronyms like OBO come into play. But fear not! This comprehensive guide will demystify "or best offer" pricing and equip you with the knowledge to confidently navigate sales negotiations.

Whether you're a buyer seeking the best deal or a seller aiming to maximize your profits, understanding OBO is crucial. In this step-by-step guide, we'll cover everything from the basics of OBO to advanced strategies for buyers and sellers alike. Get ready to level up your negotiation skills and close more deals!

Understanding the Basics of "Or Best Offer" in Sales

When selling items online, you may come across listings that include the acronym "OBO" in the price. OBO stands for "or best offer" and indicates the seller is open to negotiating on price. This pricing strategy is commonly used on classified ad sites and online marketplaces to encourage potential buyers to make an offer on an item, even if it's below the listed price. Understanding how OBO works is key for both buyers and sellers to successfully negotiate deals.

1. OBO Means the Seller is Open to Offers

Including OBO in a listing signals to buyers that the seller has flexibility on price. Rather than a firm "take it or leave it" price, the seller is willing to entertain and consider offers from interested buyers. It opens the door to a back-and-forth negotiation to arrive at a mutually agreeable selling price.

For example, let's say a seller lists a used sofa on Facebook Marketplace for $300 OBO. As a buyer, you could submit an offer of $250 to try and get a deal. The seller may accept your offer outright, come back with a counteroffer, or decline and stay firm at $300. In any case, the OBO indicates a willingness to at least hear you out.

2. OBO is Frequently Used on Classified Ad Sites

OBO pricing is especially popular on classified ad sites and local online marketplaces like Craigslist, Facebook Marketplace, OfferUp, etc. Individual private party sellers often use OBO to offload items faster compared to holding out for full asking price.

The informal nature of these peer-to-peer marketplaces with their focus on used goods lends itself well to OBO pricing and the expectation of some haggling or negotiation between buyer and seller to close a deal. It's less common to see OBO on more formal marketplaces like Amazon or eBay.

3. OBO is Different from Auction-Style Pricing

Don't confuse OBO with an auction-style listing where buyers submit competing bids and the item goes to the highest bidder after a set time period. With an auction, the price is determined entirely by the demand of the buyers. The seller doesn't have a target price in mind.

In contrast, with OBO pricing, the seller still has a general price they want to get for the item, even if they are willing to accept less. Offers are considered on an individual basis by the seller rather than the item going to the "best offer" of a pool of buyers.

4. Making an Offer on an OBO Listing

As a buyer, you typically submit offers on an OBO listing via a private message to the seller rather than posting your offer publicly. Reference the listing and item, and clearly state the price you are offering. Aim for an offer reasonably below asking price to improve your chances of it being accepted.

If your offer is declined, you can always submit a higher "best and final" offer, but avoid going back-and-forth with the seller too many times. Have a max price you're willing to pay for the item in mind.

In summary, OBO is a common pricing strategy that facilitates negotiation between buyers and sellers. In the next section, we'll take a closer look at the benefits and drawbacks of using "or best offer" pricing in your own listings. For tips on effective negotiations, check out our sales discovery questions guide.

Pros and Cons of Using "Or Best Offer" Pricing

When selling items online, pricing your listing with "or best offer" (OBO) has both advantages and drawbacks to consider. OBO gives you flexibility to negotiate with buyers and potentially sell your item faster. However, it can also attract lowball offers or tire kickers that waste your time. As a buyer, you may get a great deal on OBO items, but you'll need to put in the work to negotiate with the seller.

1. OBO Provides Sellers Flexibility on Price

One of the top benefits of choosing OBO for your online listing is the flexibility it provides on pricing. Rather than being locked into a firm price, you have leeway to accept, reject, or counter any offer that comes in. This allows you to feel out the market and get the best price possible.

For example, let's say you list a used iPhone 11 for $400 OBO. If you immediately get several offers at $375, that's a good sign you priced fairly and can likely get your full asking price. On the other hand, if the highest offer after a few days is $325, you may want to accept it before the phone loses more value. Without OBO, you'd have to either hold firm at $400 or edit the listing.

2. OBO Can Attract More Potential Buyers

Choosing OBO for your listing can also help drive more interest and attract potential buyers. Buyers often filter searches to only show OBO listings, knowing the seller has pricing flexibility. Even if your list price is slightly high, more people may click on your listing and submit an offer compared to a firm price listing.

The ability to negotiate is powerful for getting more eyeballs on your item and offers rolling in. Of course, more interest can also mean more messages to manage from prospective buyers. But ultimately it improves your chances of making a sale.

3. OBO Listings Often Sell Faster Than Firm Price

Another advantage of OBO for sellers is that it can help you sell your item faster compared to a firm price listing. With more buyer interest and the flexibility to negotiate, you're likely to get acceptable offers sooner. If you need to sell an item quickly, the back-and-forth of OBO can be worth it.

For example, if you're moving and need to offload furniture, pricing items as OBO can help you sell them ASAP. You may get a lower price than you want, but at least you'll get something and can move on. With a firm price, your listing may sit stagnant for weeks.

4. OBO Has Some Potential Drawbacks for Sellers

While OBO has benefits for sellers, there are some drawbacks to consider as well:

• Time spent responding to messages and offers
• Fielding lowball offers well below your list price
• Buyers who make an offer and then ghost you
• Risk of settling for a lower price than you could get

These potential downsides can be frustrating and time-consuming to deal with as a seller. You may get lucky with a full-price offer, but more likely you'll have to weed through many negotiations to get an acceptable offer. Depending on the item, a firm price listing may be the way to go.

OBO pricing has both pros and cons for online sellers to weigh. Carefully consider if the flexibility and potential for a faster sale is worth the time and energy of negotiations. Next up, we'll share some tips for buyers to negotiate the best deal with OBO sellers.

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How to Negotiate the Best Deal with OBO Sellers

When you find an item listed "OBO" or best offer, it means the seller has some flexibility on price. To get the best deal possible as a buyer, you'll want to do your research, start with a fair offer, and negotiate respectfully. Highlighting your ability to pay quickly in cash or through a convenient method can also help seal the deal at a price you're happy with.

1. Determine a Fair Offer Price Based on Research

Before making an offer on an OBO listing, research the going rate for the item you want to buy. Check the sold prices of similar items on sites like eBay and local marketplaces to get a sense of market value. This will help you determine a fair offer price as a starting point for negotiations.

For example, if you're interested in a used iPhone 11 listed for $400 OBO, and your research shows similar phones selling for $350-$375, you might start by offering $325. That would be on the lower end but not a lowball offer. The seller will likely counter, and then you can negotiate from there to meet in the middle.

2. Mention Your Ability to Pay Quickly and Conveniently

In your offer message, play up your ability to pay quickly via the seller's preferred method, whether that's cash, mobile payment apps like Venmo or Zelle, or even cryptocurrency. Many sellers prefer these instant payment options over checks or PayPal, which can take a few days to clear.

If you can pick up the item ASAP, mention that as well. For example: "I can pick it up today and pay in cash if you accept my offer of $350." The ability to complete the sale quickly and get paid right away is often attractive to OBO sellers and may make them more likely to accept a slightly lower offer.

3. Highlight Your Reliability and Trustworthiness

Build trust with the seller by mentioning any factors that make you a reliable, low-risk buyer. If you have a history of positive feedback on the marketplace where you're buying, point that out. Or mention that you've bought and sold many items in the past and always follow through.

You could say something like: "I've completed over 25 smooth transactions on Facebook Marketplace, so you can deal with me in full confidence. I show up on time, pay the agreed price, and don't haggle in person." Establishing yourself as an experienced, trustworthy buyer can give you an advantage over other buyers, even if their offers are slightly higher.

4. Communicate Politely and Professionally

Throughout the negotiation process, keep your messages polite and professional. Don't get frustrated if the seller rejects your offer or counteroffers higher than you'd like. It's all part of the negotiation dance.

If a seller doesn't want to budge from their list price, you can politely say: "I understand your position. Please keep me in mind if you reconsider my offer down the line. I'm ready to pick up immediately and pay in cash." Leaving the door open respectfully preserves the potential for a deal if the seller's circumstances change.

By following these tips, you'll be well-positioned to negotiate the best possible deal with OBO sellers. Remember, being reliable and trustworthy matters in these person-to-person transactions. Next up, we'll flip the script and look at OBO pricing strategies from the seller's perspective.

Strategies for Sellers to Maximize Success with OBO Pricing

When you list an item for sale with an OBO (or best offer) price, you open the door to negotiation with potential buyers. As a seller, this means weighing the benefits of faster sales and flexibility against dealing with lowball offers. By setting a competitive starting price, screening out tire kickers, juggling multiple offers professionally, and communicating promptly, you can make OBO work to your advantage while minimizing the downsides.

1. Set a Realistic but Attractive OBO List Price

To attract interest from serious buyers, your OBO starting price should be competitive with the going rate for similar items. Research recently sold listings on the platform you're using to determine a fair market value.

Price your item slightly above what you're actually willing to accept. This leaves room for negotiation, so buyers feel like they're getting a deal. If you list too high above market value, you may deter interest. But pricing at the lowest you'll accept leaves no bargaining cushion.

2. Be Prepared to Handle Multiple Offers

If your item is desirable and well-priced, you may receive multiple offers from interested buyers. Avoid accepting an offer prematurely, as a better one could come along. But don't string buyers along too long either, or they may move on.

Thank everyone for their interest and let them know you'll make a decision by a certain time. This buys you time to field other offers while creating a sense of urgency. If a buyer really wants the item, they may improve their offer to beat out competitors.

3. Watch Out for Lowballers and Tire Kickers

One downside of OBO pricing is attracting lowball offers and non-serious buyers. Lowballers often make offers way below market value, hoping you'll be desperate enough to accept. Tire kickers ask tons of questions without real intent to buy.

To minimize time wasted on these types, list key details in your description to weed out basic questions. Use your best judgment, but consider ignoring lowball offers more than 30-40% below asking price. Politely decline with a simple "Thanks for the offer, but the best I can do is $X."

4. Communicate Promptly and Professionally

Whether you receive one offer or many, prompt and professional communication is key to successful OBO transactions. Respond to all reasonable offers within 24 hours, even if it's to politely decline or say you're considering other offers.

Be courteous in your messaging, even if a buyer seems unreasonable. Avoid getting angry or arguing with lowballers. Simply reiterate your best price and move on. Buyers often have questions before making an offer, so be prepared to provide additional details and photos. The more responsive and helpful you are (within reason), the smoother the negotiation will go.

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By following these OBO strategies, you can maximize your profits while minimizing the potential downsides. Remember, your goal is to get the highest price possible while still making the sale. It's a balancing act, but with practice you'll get a feel for how to handle offers and negotiate with confidence.

Thanks for sticking with this guide on what OBO means in sales! Who knew three little letters could make such a difference in your selling success? The next time you list an item OBO, you'll be well-equipped to maximize your profits.

Conclusions

Understanding what OBO means in sales is crucial for buyers and sellers to negotiate effectively and get the best deals. This guide covered:

• The basics of OBO pricing in online sales and how it differs from other pricing models
• Key benefits and drawbacks of using OBO for both buyers and sellers
• Tips for buyers to negotiate successfully with OBO sellers
• Strategies for sellers to price items, handle offers, and communicate with buyers

By mastering OBO sales tactics, you'll avoid leaving money on the table or getting stuck with overpriced purchases!