How to haggle November 6, 2009
Last week, I was in China having another adventure.
During my stay I had the joyous opportunity to visit a few large bustling markets. These markets are full of small (usually no larger than a few meters square) open stalls, filled to overflowing with all kinds of merchandise and staffed with some of the best negotiatiors on the earth.
All of the markets I visited haggling for price was expected. When I first arrived, I was told this, but forgot some of my most important haggling skills. It’d been almost a year since bartering on the streets of Bangkok, and I’d forgotten what I was doing. And this is why I’m doing this post – to remind me what to do next time, so I don’t again pay a 100% markup on items.
Bad example 1: My first purchase of the week I asked for the item by name. Several were shown and a price of 150 was stated. I countered with 40. He dropped to 100. I raised to 50. He dropped to 60. At this point, I knew I’d made a mistake buy stating a high price too early. I walked out with the item for 50. See rules #4.
Example 2: Later that same day, I haggle over a sweater. The sales girl starts with, “This is nice, genuine cashmere” (see rule #14), “last customer I sell for 1200, for you I give you best price 1000.” (see rule #3).
I counter with “Too much. 10.”
She gives me an academy award performance of shock (rule #24), “No. Best cashmere. Last customer I sell for 1300 (yes, in direct contrast to the 1200 thirty seconds ago), for you 900.”
“No, way too much. Thankyou.” I say, turning to walk away (rule #5). She grabs my arm.
“How much, real price, not crazy price.” (Rule #15)
Example 3: I’m haggling for some belts and we’re about half way through the negotiation. She says “You good bargainer.” I say, “You’re better.” (see rule #9, #26).
She thrusts the calculator into my hand again, “your best price.” I type out another very low offer, she looks at it, looks at me with confusion and says jokingly “You Aussies are usually so nice.” (see rule #24).
Example 4: I look at some nice fans. The girl shows me the variety, explains the double silk and bamboo construction. The opens the negotiation with 200. I shake my head say “crazy price” and just walk off. She yells after me, “100! Ok 50. You good bargainer 20, 10!” (see rule #5, #15)
Example 5: I’m haggling over a teapot. Their initial price 500. Mine 20. They come down some, I immediatly jump to 80. We then spend the next 10 minutes with me staying on 80, and them dropping the price by increasingly smaller amounts. They began getting frustrated that I wouldn’t raise my offer. (See rule #11.)
Bad example 6: I’m haggling over some luggage. There was about a thousand RMB difference between our two prices, and I’d already raised the max I would pay twice. I guessed (incorrectly it turns out) that we can’t meet so start to walk away for the third time. The sales girl physically stops me and says, “Best price,” and for the third time I give the same price I did last time. I then start to move her and she says, “ok,” dropping 1000 off her last offer. (Rule #5, #2 and #21).
Bad example 7: Negotiating hard for a nice jade pendant and silver chain we’d tested the jade several times to prove it’s real jade and not plastic. The chain was a fine silver chain. Once we settled on price, she took away the chain and pendant and offered it to her assistant to package. As I’m watching to ensure they don’t swap for a similar looking plastic pendant, the attendant says, “which sized necklace?” and they swap the necklace right in front of me. It’s not a bad replacement necklace, just different than what I was negotiating for. See rule #31.
So after those examples, these are my loose rules for haggling. They can be used anywhere, and even extended to bigger price negotiation, but work best for small scale, one off situations that you find in these kinds of market.
- Let them state the price first.
You might have been happy to pay that initial price, now you know you would be paying too much. - If you think you got a good deal, you did. It doesn’t matter if someone else got a better deal or you could have got a better price if you did something different.
- They will usually give an overblown price, then immediately discount just for you. Related to rule #10.
- Counter with 1/10 price or less.
This is highly dependant on the market, some more, some less. However, you’re low-balling, just like they are high-balling. Do so with a smile knowing you’ll haggle. Related to rule #11. - At least once walk (or threaten to walk) away, if they call you back, or yell a lower price. The relationship and negotiation is still on.
- Except in the most extreme situations, it’s unlikely they’ll ever sell at a loss. That means profit is their problem not yours. Your job is to get the best deal you can, and have fun doing it.
- Joke around, flirt, have fun. This is enjoyable (or should be) for both of you. See rule #20, #6.
- If they touch you, touch them back in the same way.
- If they compliment you, compliment them back.
- They often have a bad, fake or broken version of the product you’re haggling over. They might offer you the bad version for your last price. This means you’re on track.
- It’s much, much easier to start low and raise your price in tiny increments, than staying on your initially higher price.
- If you buy and they seem angry, you got a good deal (although they would have still made a profit – see rule #6) Related to rule #24.
- If you bargain too hard and don’t end up making the deal. You now know their profit margin, go to another store and start over with this new information. Usually in these markets, all the stores have the exact same products.
- They will throw reasons at you to convince you to buy. “You can’t get this at home”, “Best product”, “Genuine, not fake”, “best here”, etc. Throw the same number back. “I have to carry it home”, “Not the colour I want”, “See the scuff mark here” doesn’t matter what the reason is, use it to justify your last price just as they do.
- Use the exact words one stall uses with you on another. “Crazy”, “kill me”, “hard bargainer”. Etc.
- Say no many times before saying yes.
- Go in early or late. First and last customers of the day have an easier time getting a good deal through most of Asia.
- Take their comments and compliments and own them. “I am your best customer!” Tends to throw them off.
- They are the person that’s working. Make their job enjoyable and you get a better deal.
- Have fun. Smile, joke around. See rule #19
- Do some preparation before hand. Find out rough price guides for what you’d be expected to pay. Ask many locals (and some forigners for comparison). Incorporate this information into you initial offer and maximum price.
- Make one, or a few tiny purchases first. Things you might not want, but can use as gifts. Haggle very hard. Haggle so hard that the shop owner doesn’t sell to you. This gives you direct experience on what to expect when you’re haggling too hard or too soft.
- Do not raise your voice or get angry. It’s never ever personal. See rules #19, #20.
- They can act well. You’ll experience shock, upset, mild anger, and other emotions. They might even laugh at you and throw insults in your direction. “Aussies are usually so nice.” Act back, win an oscar for me.
- Keep an ear out to the haggling going on to your left and right, you can know how good or bad yours is doing comparatively. Did the person before you pay less or more? You can also use this to know the markup. See rule #4, #21.
- Flattery works both ways. See rule #9 #15.
- Carrying a bag with purchases changes the dynamic. You’re now a confirmed buyer of ‘that product’ and usually get a better response. They might ask how much you paid, you can use that to negotiate another one of the same for cheaper.
- You will not be treated as the unique individual that you are in the beginning. You will be offered an initial price based on some unknown reason. Could be their standard price, could be your accent, shoes, haircut, or just that the last guy paid off. It’s not about you. See rule #23.
- When a second person joins the negotiation, you’re getting a good deal, or having fun or both.
- Bulk or multi item discounts add additional aspects to the negotiation.
- Watch for the bait and switch.
Above all remember their job is to get as much money as they can out of your wallet and yours is to keep as much as you can in your wallet while getting the items you want and have fun doing it.
Do you have any others that you use?
- Posted in : Negotiation, Persuasion, Psychology, Sales
- Author : Michael
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