The Ultimate Bargaining Tools!

For most of us who have grown up shoppingat Target and eating Pizza Hut, learning how to bargain is an unnatural experience at best, and an unpleasant or financially unrewarding one at worst.  In many cultures, however, it is a skill you will need to acquire to make your journey or business more successful.  Over the years, through trying my hand at shopkeeper negotiations in dozens of countries, I have developed a few strategies that can be applied effectively to any culture and any product.

There are a few simple rules to apply in general:

1)      Keep it light-hearted

A common mistake newbies make in bargaining is to think that it is you against them.  This can lead to a sort of fighting mentality that really isn’t going to help you.  Animosity will never get you a better price, but a smile or personal connection might.

2)      Don’t be too expressive

If you really like something, keep it to yourself.  The other side has honed their skills and will be analyzing your voice and facial expressions to try to gauge your interest.  You might as well just add on a few dollars for each show of desire.

3)      Don’t rush

Bargaining is a process and the key determinate is time.  In the end, one side is going to give up because they don’t want to spend any more time at it.  In this case, time really is money.

4)      Speak the language

The more you can speak the language, the easier it will be to get the price down.  Even if you only use simple phrases like “hello”, “thank you”, “how much does this cost”…you should try to do it in the local language.  A little bit can go a long way to making them believe that you understand the way things work.  Many expats, particularly in China, hardly learn the language anyway, so with a few words you’ll be right up there with a large number of long term expats.

5)      Don’t use a % baseline

The most common starting point for bargaining for many is at half price.  For some reason people feel that if they get an item for half price, they got a good deal, and nobody knows this more than the shopkeepers.  Of course they will be in total “shock” and “awe” that you would even suggest that half price is reasonable and they may only come down by 10%, but most of the time I find the real price is quite a bit lower than half price in true bargaining economies.  Don’t use any sort of percentage of their starting price, they will always play that game better than you.

6)      Where to Start?

Start your bidding at:

a.      A lowball price based on your estimation of the material and labor cost

b.      A price that you would feel VERY good about getting

If you have an idea of the material and labor costs that went into the product, you are well armed to be a bargaining maestro.  Start at about what you expect the actual factory price to be (where the shopkeeper gets it from), and then you can work up from there given the willingness of the other side.   Instead of thinking in terms of percentage of the shopkeeper’s price, change your mentality to be thinking of costs in terms of material, labor, and shipping.

If you don’t have any idea of the real price, start with a price that you would be very, very happy with and feel like you got a great deal.  If you can walk away with that feeling, then who cares if you gave the vendor a little more than you could have, that’s a pretty great feeling.

7)     Fake it, real good

If you live in a country, then you eventually find out the real price of things.  In most countries that we visit, there are usually some expats there that will occasionally go to the shops and buy goods knowing the real price.  When they go in there is no nonsense.  If the real price of a t-shirt is 20RMB, they will go in and, hopefully in Chinese, say 20RMB in a matter of fact tone.  Even if the shopkeeper started at 200RMB, they will almost immediately recognize this type of customer and will start bagging it for 20RMB.

If you aren’t one of those customers, you want to be confused for one.  There are a couple tricks that can get you there.  One is, as mentioned above, to have a pretty good idea of real costs.  Then you base your price on this, walk in as if you’re there every day, tell them the price you are going to pay (you don’t even need to hear their initial offer, or if you do, ignore it like it was a Starbucks employee telling you your latte was going to be $10, clearly he/she misunderstood the situation) and start getting out your money.  You’ll be surprised how often this works if you’re close, and it will save you a ton of time.  If you’re not, in either direction (low or high), then things will get more complicated.

Another trick that has worked well for me recently is to tell them that I just bought this same item a few weeks ago for such and such a price down the street.  As soon as I’ve said it, the owner’s have given me that price without question.  For the last item I bought that was 85% off of their original price.

To be continued…(with the final and ultimate bargaining trick!)