Travelers away for extended periods of time on tight budgets generally pride themselves on having a richer experience of the countries they visit than those who rush through on a package tour. Implicit in this rich experience is meeting and getting to know a wide range of people. Many interactions with people center around commercial transactions, and in many parts of the world this means bargaining.
Some people consider bargaining to be in bad taste, especially in developing countries where the difference in income between the seller and the buyer can be substantial. However, in many places there is no fixed price for any item; the bargaining process is necessary to determine the value of the item. Often foreigners who overpay enormously are seen not with affection or respect but rather with something closer to disdain. Sellers who get a far higher price from you than they would have accepted may wind up being very friendly to you, but it is the friendliness of a con man.
Here are three common but false beliefs about bargaining:
- “We don’t bargain prices in developed countries.”: It’s quite common to ask a shop owner if he doesn’t have something “a little cheaper”. Consumer Reports magazine in the U.S. publishes an annual report on how to bargain for new and used cars. Any store that posts a sign saying “We will beat any competitor’s price” is saying, in effect, “My friend, I make a good price for you.” Even when prices are absolutely inflexible, we often look for a relative or friend “in the business” who can get us a special deal.
- “There is a “true” price for any item that is somehow being hidden from us when we bargain.”: We know, in developed countries, that different stores charge different amounts for the same item and that the same store may change the price of an item during seasonal sales or when the store is in need of ready cash. The only difference in bargaining situations is that people usually don’t bother with the idea of a “Manufacturer’s Suggested Retail Price” or MSRP. Prices are decided by supply and demand, how much the merchant thinks you will ultimately pay and how much he thinks you want the item, the merchant’s situation at the time including his mood, his need for cash, how many sales he’s made that day, whether you arrived with an “agent” who needs to get a commission, whether you have a personal connection with him, and (this is often very important) how much he likes you. These factors can vary from buyer to buyer and from day to day.
- “There is some kind of formula you can use to bargain with.”: Such a formula usually sounds like this: “You should offer 30% of the asking price and settle for 50%.” It is immediately obvious what the flaw is: having figured out the formula that people use the merchants will simply double their prices again so that they end up with twice what they would have accepted. In reality, some merchants may ask ten or twenty times what they would accept while others ask only ten percent more.
Research the value of the item you are buying. The easiest way to do this is speaking with a knowledgeable traveler or local person who has no interest in the sale. When speaking with a local contact, remember that they may never have occasion to buy the type of item you are interested in, nor will the conditions of sale that apply to them necessarily apply to you. Also, you must consider whether they have some motive for exaggerating (or underestimating) the price. If the item is a common one, you can casually ask the price every time you see it, say twenty or thirty times, before seriously trying to purchase it. You can also try to find out what materials the item is made from and how much time is involved in the manufacture, and from this calculate a very rough idea of the labor and material costs.
Take your time.: In tourist mills, or when bargaining for small day-to-day purchases, you can sometimes do a deal in a minute or so: “Ten!” “Three!” “Seven!” “Five!” “Four!” “OK!” But for any significant item the seller is unlikely to reach a rock- bottom price without a protracted bargaining session and probably several visits to the shop. Certainly the best option is if you have several days during which you can casually pass by the shop, allowing the vendor the opportunity to drop his price a little bit each time. If you do make multiple visits, when you leave each time don’t stomp out in anger or disgust but leave things on a friendly footing.
Get the seller to make several offers before you counter.: In almost every case the seller’s initial offer will just be a fishing expedition. You should not reply to it in any way, just keep asking, politely, if they can offer a lower price. After you make your first offer, there is no obligation to “trade” figures; there is no reason why the seller shouldn’t come down two or three times before you make your next offer.
Deal with people you are comfortable with.: Since you will be spending a lot of time with the person you are bargaining with, and possibly giving them a lot of money, it’s a waste of your time to deal with people you don’t like.
Speak a little of the seller’s language.: In any transaction in a foreign country, the effort you make to use a little of the local language will be returned many fold. Oddly, it is often true that the worse you speak the language, the better you will be received (because you are making more of an effort).
Maintain a friendly demeanour. For me, the value of the item is enhanced by a fun and educational buying experience. Your relationship with the seller may affect the final price you’ll pay. In many parts of the world, such as Turkey, bargaining for a substantial article is an involved process involving the sharing of tea, food, and personal information.
Make sure both the buyer and seller understand the price: When you agree on the price, make sure that everyone understands what the price is by writing it out or typing it on a calculator, before any money is shown. Also, be aware that there are a few places in the world where the base 10 system is not in common use. Once, in a Hmong refugee camp in northern Thailand, we were bargaining for some cloth with a group of people who were quite cavalier about adding zeros both before and after the price we wrote down. In this case it was necessary to use the actual paper money to agree on the price.
Don’t be rude: Under no circumstances should you be rude, or question the validity of any price the seller names no matter how absurd it seems to you. Your attitude should be apologetic and a little self-effacing: “I’m sorry, but I can’t pay that much.” If you feel the seller is really trying to rip you off, just apologize for taking his time and leave: there is no need to bargain further with him, rather you should seek the item elsewhere.
Don’t show too much or too little interest: You don’t want the seller to feel that the item in question is one you cannot live without. However, most people go too far to the opposite extreme, acting as if they don’t really want the object. In this case, the seller has no incentive to actually try to close the sale. A better attitude to project is that you like the object in question, and would certainly buy it if only this minor matter of the price could be settled.
Don’t use logic to argue merits of the item or try to justify your offer: This is a losing game for you. The seller spends all day, everyday, playing and he’s bound to have an argument to counter any justification you can give. Certainly you owe no explanation as to how you have arrived at the price you wish to pay. After all, the seller is very unlikely to give you (correct) information about how he has arrived at his selling price (“Well, sir, the item cost me 10, and I have to give 15 to my friend who brought you into the store, and 5 to my cousin at your hotel, and I know that Germans are embarrassed to bargain and pay more than Australians, but you’re wearing old shoes, but I have a date tonight and I need the money, so the price is 72”).
Don’t start too low: On the surface, it makes sense that if you start very, very low you have more “room” to bargain down the seller’s very, very high starting price. But this tactic serves more to signal your lack of knowledge of the actual value of the item. Most successful negotiations I have been involved in have seen me start close to the price I am determined to pay, and make occasional small concessions while the seller comes down in leaps and bounds.
Don’t be confrontational: A bargaining session is a cooperative endeavour in which both the buyer and seller are working together to a common end: agreeing to a price that will satisfy both parties. It is not a competition in which you are trying to “beat down” the opposition and “triumph” over them.
Don’t be embarrassed: The worst that is likely to happen to you if you make a ridiculously low offer is that the seller will smile sadly and say no. Usually, no matter how low your offer is, it will be the start of a friendly bargaining session. (This is not necessarily true: I was once physically removed from a shop in Morocco where I had made a ridiculously low offer on an item I had not researched at all).
Don’t be too frugal: In some countries where your living expenses may be only $10 or less per day, items that are great bargains seem less so in comparison. It’s a mistake to pass up purchases that you will treasure long after you return home in the name of false economy. About 10 years ago I was travelling with a friend in Hong Kong when we came across a man who carved stamps (chops) from soapstone blocks. My friend hesitated to have one made with his monogram: it cost $5, the same as his share of our room in Chungking Mansions. In the end he did it, and of course he’s gotten constant use out of it ever since.
Also don’t get caught up in the bargaining in a third-world country and forget how much home-currency you are bargaining over. I’ve seen tourists badgering an old lady doing laundry because they thought the price was too high. It may she wasn’t giving them the best price for locals, but they were arguing over a dollar or so in price.