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5 Tips on Negotiating in China
Shopping in China is much like it is in many less developed countries. Except in large supermarkets, prices are not necessarily fixed. Even then large items like televisions and air conditioners could be discounted if you are skilled at bargaining. When shopkeepers see foreigners, many are envisioning dollar signs in their minds. Foreigners are presumed to be rich and many tourists do carry around large amounts of cash. Although not all vendors do this, many do automatically raise their prices many times over for foreigners compared to what they would charge a local.
One friend was shopping in China and negotiated very hard on a souvenir. She thought she had obtained a good price, but when she was walking away saw the shopkeeper literally jumping up and down for joy at the price she got.
Sometimes bargaining is considered distasteful for Westerners. It is not very fun and we don't want to take advantage of sellers who are often poorer than we are. While this is understandable, knowing a few basic skills can enable us to get a good price both sides can be happy with. If you follow these skills, you may not get the dirt cheapest price every time, but you can be sure the price you paid is reasonable and that you didn't get ripped off. So without further adieu:
Negotiating Tip #1: Compare prices at multiple shops – Many times it is hard to know what should be paid for something. One of our “go-to” moves is to think how much it would cost in our home country. But prices are very different here and many items could go for much less. Instead of guessing based on how much we would pay at a mall in New York, visit several shops and compare their prices. It is likely that all of the shops will ask more than they intend to actually sell it for, but at least you can get a ballpark figure and make sure the asking price is not astronomically higher than it should be.
Negotiating Tip #2: Let the shopkeeper tell you the selling price first – One of the favorite tactics of local merchants is to ask you as the buyer what you want to pay for something. If they can get you to tell your price first, the battle is halfway won. Your first offer might be much higher than they even hoped to get (though of course they wouldn't tell you that, but would instead go even higher!) I always tell them that that as the seller they should tell me the price. This first price is generally much higher than it should be so I tell them this is unreasonable and that they should give their lowest price first. The lower you can get them without even making an offer the better.
Negotiating Tip #3: Make your first offer much lower than you think it should cost – Generally it is better if you do not offer what you hope to pay first. IF you know the price of the item and tell them “This is what it should cost. Take it or leave it.” that could work. But if you are unsure how much it cost, make your first offer a very low one. This will allow you to gauge their reaction. At the beginning they will feign shock and indignation. Don't let this phase you. It is a normal reaction that has been practiced on thousands of customers before you, and probably the mirror as well. Focus on how much they lower their price rather than gestures or words.
Negotiating Tip #4: Use Chinese – The absolute best way to negotiate in China is to use Chinese. Nothing will surprise a seller more and encourage them to cut to the chase than speaking a few sentences of well-placed Chinese. Speaking Chinese well shows the store owner that you live here, know the culture and customs like a local, and are not going to be an easy target. In Guangdong and Hong Kong its even better if you can toss out a few select phrases in Cantonese. Speaking their own language also shows a certain respect for their culture and can help you become friends like they so often call you during negotiating.
Negotiating Tip #5: Walk away – This is the most powerful negotiating tactic you can ever learn to master. If you do not know how much to pay, walk away. If their price is too high, they will chase after and offer a lower price. If they do not follow you, it means they already offered close to their lowest actual price. You can use that knowledge at the next shop. Walking away also shows that your life doesn't depend on purchasing the item in question. You can live without it. And this is in fact the key to negotiating. You get the best prices on things you do not care deeply about (or at least that you appear to not care deeply about.)
And there you have it, five simple tips for negotiating in China. Happy shopping!