Sweating the Small Stuff - Negotiation as a Foreigner

Most of the time, negotiation about a transaction or sale doesn't happen very often in our lives. As a society, we tend to bargain mainly on large issues such as buying a car or house, or casually among friends. Negotiation for everyday items has mostly been eliminated due to standards and expected norms. This is not the case in many places around the world, however, and although the situation may be unfamiliar, the principles at play are quite similar.

I have lived in and visited a number of countries in Asia throughout my life, and as a foreigner it is important to understand when it is in your best interest to bargain. Being able to appraise the value of the item you are interested in and having knowledge of the culture and economics of the area are very important. More often than not you can expect even up to a tenfold increase over the regular price for an item, and not realizing it or not being willing to negotiate can cost you.

Such a dramatic starting price is indicative of what they expect to achieve. The other party wants to get the most possible from the deal, and they don't expect you to either push very hard, or negotiate at all. Usually a resolution is attempted quickly, and sometimes after a seemingly massive concession. Despite this, however, they may still earn a huge profit, and you would be none the wiser unless you knew more about the economics in the area. Personally I have seen items (fake shoes, bags, watches, souvenirs, etc) easily sell for ten times their real value. A half-hearted negotiation attempt might still leave you at five times what a reasonable price would be.

The strategy to negotiate, then, must be grounded in information about what the item is worth. Understanding the customs and culture of the area also helps but is not as crucial as you might expect, as it rarely actually arises as a problem. A strong competitive style is critical to push back as hard as you can. Often, you can easily push past further than you expect, sometimes past what you feel is reasonable. The other negotiation styles have little place here, especially in situations where you're almost certainly never going to see the other party again.

Although this type of situation rarely arises in modern times throughout most of the developed world, it still occurs in many parts of the world. Tourists are the main victim of these practices, as the stereotypes of overprice holiday souvenirs bears witness to. What they don't realize, or perhaps simply want to avoid, is that negotiation is key to ensuring you get a fair deal.