Negotiating - A few Tips

A good friend of mine is on her way to India as I type. I gave her a little gift of a few of my favorite travel companions such as carabiners, paper soap and antibacterial wipes. I also gave her Twenty Bucks so she could pick me up something cool.

This launched a whole barrage of tips on Negotiating. Poor thing sat there and listened attentively as the firing squad rattled off requirements. I suggested we practice. I tell her I will sell her my water for $5. A friend had just told her to offer 10% on the first price and settle somewhere between 30-50%. She dutifully counters with 50 cents! I give her a sad look and say; “Really? I have a wife and child to feed at home! Can’t you give me more?” She instantly melts. A friend at the table makes a joke that I’m going to have to share a $40 scarf with everyone else giving her money.

I took a negotiations class during my study abroad in Thailand. I must say that the most valuable thing I learned was that most negotiations fail because either one or all parties do not realize they are in a Negotiable situation. As a result I try to remember to ask for discounts everywhere. In the US this is probably more annoying than fruitful, but I have had several successes in situations one wouldn’t normally think to negotiate. It is a delicate dance but here is the good stuff, some of my random tips around Negotiation. Most of these are slanted toward negotiating in a Third World Country:

Always TRY to Negotiate

One of my first trips to a mall in Asia was extremely fruitful. I walked away with a pair of sandals and some cloths for what I thought were fair prices. FOP (Fresh off the Plane) everything was a great deal. I returned to the same mall after several months of life in Asia to pick up a few things before heading back to the States. I never suspected that I could negotiate at a Mall, but thought I would give it a shot. When the sales people reacted the same way as street vendors, I was dumbfounded. I had paid nearly double what I needed to for everything I had purchased at the beginning of the trip.

Some people choose not to negotiate because they feel it isn’t worth it, items are already so cheap. My argument there is that if no one negotiated then prices would continue to climb. That or vendors assume they can take every stupid tourist for a ride. Please do your part to keep inflation in check with an attempt to negotiate. (I’m no expert here, this just seems to make sense.)

The first offer is just that, a first offer

Ask around to see how much you should cut your first offer by. This was about 50% for me in Asia, and a new friend says you should counter offer with 10% in India. The goal is to meet in the middle, finding a situation in which each of you is happy with the exchange. The act of the first offer and counter offer set the boundaries (ceiling and floor) for the Negotiation.

Hold off making a counter offer as long as possible. It will benefit you to see how fast and how much a sales person will drop their price. Then you can give a reasonable price floor, or your first offer.

If you give an offer, prepare to buy

Be ready to buy the item if you make an offer. If you walk away from a purchase in which someone meets your offer, it is rude and some people will get angry.

Ask around

Most of the things tourists buy are sold everywhere. If you see something you like ask a price, then ask someone else. This helps to determine how much you should be paying.

Ask the locals or tour guides for tips and tricks. Negotiations differ significantly with culture.

Money

Keep small amounts of Money on various parts of your Body. You do not want to negotiate down to the equivalent of 5 cents only to pull out more money than the vendor has ever seen. Asking for change would only add insult to injury. I also do this for safety purposes. There are many skilled thieves in the world. Once they see you reach for money they know where it is kept and can easily go for it, minimize your risk by separating.

If possible, switch the negotiation to a currency you are familiar with. Vendors often get the upper hand because FOP (Fresh off the Plane) tourists don't realize how much money they are really spending. This or use the calculator and keep up on exchange rates.

“Just Looking”

My favorite phrase. Most vendors on the beaten path are used to this, but it can drive them nuts. The longer you ‘look’ the more like likely they are to make an offer and quickly and significantly reduce.

Be prepared to Walk away

If you REALLY want something and they can see it in your eyes. Your bargaining power is about zilch. It helps to know you will probably find the same thing in the next stall.

If I’m not getting the price I want, I often say that I will have to think about it and maybe come back, if they let me walk away I know they are set on their price.

Cheaper in Bulk

Once you get a price as low as you think you can get it, toss in the magical; “what if I buy 2?’ You can usually get a cheaper price when you buy in greater quantity.

Guilt is a Negotiating tactic

If you have the luxury to travel to a third world country, you are in a better situation that most people that live there. Many people use this fact to guilt you into paying more for an item. “Please give me more, for my child, etc…” I am not heartless; I simply don’t appreciate the extortion. In Bali women would wait outside the clubs with their children to beg for money. I often wanted to give them something but didn’t want to encourage the cycle of mothers pulling their babies at 4AM to beg….use your own judgment, but know it IS a tactic. I usually end up giving away a LOT of food.

Set Price

Not everything is negotiable. Often times a vendor will tell you that they have a set price, or similar terminology, meaning the price will not change regardless of your stellar negotiating skills.

Take a small calculator

Often times vendors have one of their own, but just in case this is a good way to talk price when you don’t speak the same language.

Try not to take it too seriously

I tend to smile a lot when I am negotiating because I know most people are trying to rip me off. Lets face it, there is a hefty tourist tax. It is best not to get angry about anything, just do your best to bring the price down to what you think is fair. If you cannot, just say thank you but I cannot buy today.

People do not sell things unless they are making money

A common line is “That price is too low; I won’t make money at that price.” Perhaps in some cases this is true, but don’t worry, people will never sell you an item unless they are making at least a little money off the deal.

Stick to your Guns…

Another tactic is to decide how much you want to pay for something and just stay at that price. Every counter they give you simply says; this is what I am willing to pay. If the vendor cannot meet it then thank them and say it is too expensive to purchase today. This works well in some places and not at all in others.

Forgive yourself

You will make mistakes, as with navigating anything you are not already familiar with. I have angered vendors because I have offered too low, or simply been difficult. I’m sure we all got over it in time. If you pay too much, just know that the price you agreed on was good for both of you. The goal is for all parties in the negotiation to be happy. If you agreed to it, you felt it was a fair price to pay.

Forgive me

I am not an expert….not yet at least ;) ;) Please take my advise as you would ideas from a friend.