The Art of Bargaining

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Since this class is about industry and spring break is coming up, I thought this would be fun. If anyone happens to go to a place where you can only purchase things through bargaining, then this blog is going to useful. I recall the time I was in China which was in 2001. Prices of everything was significantly low compared to the prices that we pay here in America, it makes me wonder after all the import/export taxes that we pay here along with government sales taxes, how much are stores really profiting from us? Meanwhile if they purchased many products from China at really low prices, they could profit by over 100%.

I'm trying to remember my bargaining skills since I was last there in 2001......

Beijing, China - Bargaining Tips

Bargaining is a part of survival in China and maybe in other parts of the world where prices are not fixed and people are just out to make as much profit as they possibly can while ensuring that they still have customers. Bargaining is a form of art at least in the many markets and back-street clothes stalls in China. If you're unfamiliar with the language, not a problem because as long as you can bargain your way through the markets, you should have a great time. I remember when I was in China, I was an inexperienced bargainer and at my first try, I bought a shirt for 80RMB which is maybe 10 USD and everyone was saying I overpaid for it but after the first purchase, I think I had it down-pat. By the end of my trip, many of the Americans that travelled with me had to buy a separate suitcase just to put all the neat things they were able to buy for under 100 USD. The tips here are Beijing specific but may help you at any place in the world where bargaining is practiced.

- DO NOT say or mention the price you are willing to pay for an item unless it's near the end of the process.
- Always try and drop the seller's opening price as much as possible before mentioning how much you're willing to pay.

- DO throw out really low prices like 5 RMB as long as you have a big smile. If they look angry and say you're crazy, just go with it.

- DO keep smiling throughout the bargaining process because a seller is much more likely to continue bargaining with a happy smiling face. Getting angry rarely gets you the price you want.

- BE AWARE the initial price offered by the seller is usually at least 40% over the general price acceptable. It can be up to 500% over.

- DO walk away once you've given them your final price, even before. If you get called back, you know you are close. If you do not get called back, go to a similar stall and try again with a slightly higher price.


100 RMB is about 13 USD.
1 USD is about 8 RMB.

Item (all fake brands) Price range (in RMB)
Pants/Trousers 50 - 120
Shirts/Tops 30 - 120
Jackets (non leather) 60 - 200
Shoes 30 - 150
Watches 30 - 300
DVD 6 - 20 (max)
VCD/CD 4 - 15 (max)


The Process (illustrated)

The English being spoken by the seller will often consist of "cheaper," "how much you pay," "good quality," "no profit," and "highest price." Numbers are tapped out on a giant calculator to avoid confusion. Your responses would be "too expensive," " I can get it somewhere else cheaper," sometimes a simple gesture to motion it's too much would make them laugh. Usually when the seller is desparate and you start walking away, they will most likely give in if the price is reasonable. I remember I bought a traditional Chinese silk dress (qi pao) for 50RMB which is maybe about 8USD.

Your best bet is to keep repeating the phrase "cheaper" to them as much as you can before revealing your price.

Decide on your price based on the chart above, how much you like it, and your perception of the quality of the item.

Once you've decided the price, you then tell them a figure about 40% of the price you're willing to pay, then go up in 5% increments until they give in.

A Successful Beijing Bargaining Example
You: (looking at a nice pair of fake Calvin Klein pants) How much ?
Seller: 500
You: (You look and decide the pants are worth about 100 to you) Cheaper !
Seller: How much you want to pay ?
(never answer this straight away, just look the pants over many times, ask why such a high price, remind them its a fake, find holes etc.)
You: Cheaper !
Seller: 300
You: 40
Seller: No. No ... these are real Calvin Klein pants, good quality .. 280
You : 50
Seller: 200
You : (laughing)

60
Seller: Ok, ok, last price, last price 160
You : Ok, ok, last price 70
Seller: These good pants must be at least 100
You : 80
Seller: No, no, sorry, no profit.
You : Ok, sorry ... (start walking away)
Seller: (calls you back, put items in bag)
Ok 90 !
You : Ok 85 !!
Seller : Ok sold... wow, you good negotiator.

If you think back and look a the situation above, then you will know that you've broguth down the price from the initial 500 to 85 RMB. Never think that because a shirt costs 100RMB it's reasonable because you usually would pay that amount for a shirt in the US. In China, you must know that they are willing to sell at a much lower price. The fact is, if the seller still has a smile on his face, you have not gotten the best deal possible. A real expert in bargaining in Beijing would the seller with a look of real pain on his face. In the above example you could have got them for 50... but what the hell, you had fun and you got a great deal by western standards. Also, you'll be happy to know the seller and their family can eat a little better tonight.

Just a word on how NOT to Bargain. Here are some of the common mistake deals I've seen.

A Bad Beijing Bargaining Example 1
You: (looking at a nice pair of fake Calvin Klein pants) How much ?
Seller: 500
You : Ok. Great. Thanks.

As Homer Simpson would say ... "Doh !".


A Bad Beijing Bargaining Example 2
You: (looking at a nice pair of fake Calvin Klein pants) How much ?
Seller: 500
You: (Ha ! thinking you are going to show him !)400
Seller: 450
You: 425
Seller: Ok. Deal. You're killing me !

The way to avoid the situation in Example 2 is to have a much better idea of what the item is worth. Remember, once you state any price, the only place you can go from there is UP !

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