Wednesday, 18 May 2011 01:20

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The Art of Negotiating

Through my travels around the world, I have learned a few simple rules to help get great deals and have lots of fun. For those of us that live in a world of fixed prices, negotiating can be an uncomfortable and strange experience. It often goes against what we consider to be a logical event. For example, even if you're willing to pay the full listed price, a merchant may still attempt to negotiate with you. If you think about this in terms of prices and profit, you're definitely going to walk away scratching your head.

Keep It Fun!

The most important thing to remember is that negotiating/haggling is more about the interaction with the local store worker than about the price. Think of the negotiation as a great opportunity to speak to a local, with a potential bonus of getting a great deal on an item of interest. Keep the conversation fun and smile. This is not the place for your boardroom/poker face. If you know a few words of the local language, definitely give them a try.

You'll also notice that the same questions come up over and over again. Your country of origin is probably the most common question. The vendor is asking this for a couple of reasons. First, you are going to be stereotyped based on the negotiating skills of your local country folks. Second, it gives the vendor an opportunity to break the ice and say something interesting or funny about your country. It's amazing (sarcasm) how many vendors have visited your country, have family in your country and love some of the local food/drinks and sports teams.

Do Your Homework

You are in a much better negotiating position if you have a good idea of what the price should be. Look for the item(s) you are interested in at a few shops. Chances are at least a couple of them will have a price tag. This is important as there really isn't a rule of thumb that you can follow. For example, I've heard many times that you should aim for 50% of the initial price. That rule doesn't always hold true. On my last trip to Morocco I found that there was a very wide variance in the opening price. It's also important that you understand how commonly available the item you want is. Like simple supply-demand economics, the more places that sell the item, the better your chances of getting a good deal.

Hide Your Interest

Look around the shop and don't focus only on the item(s) you want. The more a vendor feels you really want a certain item, the less likely you are to get a great deal. If you're interested in more than one item, try to see if you can bundle the items for a greater discount.

Know Your Price

Before entering the shop, think about the maximum amount you're willing to pay. A great tactic is to only have that amount in your wallet. As you negotiate a price, you can clearly show the vendor that you don't have as much as he is asking. Don't go asking every vendor what their price is. You should only engage someone when you are seriously prepared to buy.

Walking Away from a Deal

In many cases as you walk away from a deal that you have been negotiating, you'll hear a new low price as you walk away. If you get to this stage, you really have 2 choices - take the lower price or walk away and never come back. The reason I say never come back is that the vendor will certainly remember you if you decide not to take the price and re-enter the store at a later time. That gives them the upper hand, and it's possible that you won't be able to get that same low price because they now know you haven't been able to find a similar item or similar price anywhere else.

Where to Negotiate

When you think of where you can negotiate, the most obvious answer is the local market. Though this is a great spot for some entertaining interactions, it's not the only place you can negotiate. It never hurts to ask about the price at other places such as hotels or local tour operators.