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| Classic Indian bargaining? |
All
over India
One of the things you often hear from
people returning from overseas is how cheap everything is, but also how much
they had to haggle to get it. You know the story: such and such went to a South
East Asian country and was quoted a ridiculous price for some item or another.
Hah! I wouldn’t even pay that back home. Through smarts, cunning, and
information they have heard from various sources, they got the price down to a
third of the original asking price. Wallah! An imitation Ralph Lauren polo for
just under $10 (for the record, they are always
knock-offs).
We’ve bought all sorts of stuff while
we’ve been in India. I’ve also had the joy of shopping through markets in
Thailand, Philippines and a few other places. So it would be fair to say I know
a few things about bargaining in South East Asia. It would also be fair to say I
have often fallen victim to my own ‘smarts’ and have massively overpaid for items
that really weren’t worth much at all.
For instance, I once paid NZD$25 for a
pair of glasses in a Vietnamese market, which I later paid NZD$1 for after that
pair broke. Beak dipper paid INR500 for a massage and shave that we now
typically get for INR30, and he who shall not be named paid INR1,000 for some
postcards that were later found for … well, we won’t go there.
On the flipside, there are bargains. I
recently purchased a pair of reasonable quality (and road tested) knock-off
Adidas running shoes for about NZD$30. We generally get all sorts of things far
cheaper than we would pay at home.
I love bargaining in India. I don’t
love it because you can get yourself a bargain, I love it because it is a near
perfect microeconomics, human psychology, general wits, and perhaps, greed. You
could add desperation to that list, because we often don’t think that the
making of a sale could be the difference between eating and going hungry.
I’m going to borrow heavily from “The
Psychology of Influence” by Robert Cialdini here, because there is so much
interesting stuff in it, as well as add my own thoughts on the matter.
So first,
bargaining is a classic case of information asymmetry. You literally have no
idea how much an item cost to the shopkeeper. Normally, all you have to go by
is what you think it is worth, and some benchmark as to what you could pay for
it. So he holds all the power here, but this does not make him all powerful.
We’ll get to that later. Back home we can usually get an idea as to how much we
can get something for – check a few catalogues, browse the internet, ask your
friends – and you’ll soon know how much you should pay for something. Over in
India, you don’t have that advantage. It’s a bit easier with more common
things, but with some of the more obscure and abstract things, you’re estimate
of value might as well be a feather in the wind.
The human
psychology element is interesting as well. Reciprocity (principle # 1) is a
classic technique by the shopkeepers. They will say something along the lines
of ‘I normally don’t do it this cheap for people’ or ‘for you, I’ll do it at
this price, just this one time’. Human psychology says you’re then inclined to
pay a price higher than you’d typically pay – or your idea of value – because
he has done you a favour (by offering just you
a ‘special’ price).
Social proof
(principle # 3) is another good one. Shopkeepers will often mention how lots of
people have been buying these, at such and such a price. Well, that’s good for
you, because if everyone else is doing it…? In a starker example, Lonely Planet
holds all the power. They’re recommendation is the ultimate social proof,
because that drivers visitor’s, which in turn drives further visitors, even in
the instance there is a perfectly good (or even better) restaurant or shop just
down the road. There just happens to be no one in it, so you don’t go (we found
we could often feed the three of us for NZD$5, and have food just as tasty and
filling as the more upmarket restaurants).
The Indians
also have the annoying technique of asking where you are from then using an
authority figure (principle # 4) to persuade you to purchase an item, and
probably pay too much. I’m sure Ross Taylor of New Zealand cricket doesn’t shop
at a crappy shop in the backstreets of Jaipur, and I’m sure Mick Jagger didn’t
buy an item of clothing from a Jodhpur cloth shop.
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| Mag anyone? |
It is also common
practice to massively overinflate the price of something, then ‘reduce’ the
price to give the impression that it is on sale. In fact, the sale price is probably far above what the seller would
accept, and represents a decent profit margin (the classic Briscoes technique).
There is
also a place for ‘general wits’ in the sale process. I know this may sound
corny, but often a ‘hard-nosed’ approach employed by many isn’t the best way to
go. Sometimes to laugh, joke, and tease with the salesperson is just as
effective at bringing their guard down as is going in like a ten pound gorilla.
Have some fun, see what you can do.
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| How much for that there omelette? |
Greed is
perhaps another factor. How often will we see a shop and say ‘wow, I must have
that’ and when we take (or send) it home we think ‘why on earth did I ever buy
this thing?’ Think: will I really want this when I’m back on home soil, in my
natural habitat? Most things – you don’t.
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| Endless haggling over a drink...shall we drink to that? |
Okay, so
that about does it. I’m sure I’ve massively over complicated the process. But
what I will do, is quickly offer my 4-step process for getting a bargain:
1.
Determine, with relative precision, what you
think an item is worth and what you will pay for it. Take into account the
generally cheaper prices in South East Asian countries, and the relative
satisfaction you will generate from it. Ask: would I be happy paying $20 even
if I later found out it only cost $1?
2.
Initiate the bargaining process. The time it
takes to get to a serious negotiation will generally depend on the
circumstances of the sale in question, and the relative experience of a person.
For example, if salesman sees a ‘green’ person, they will generally offer a
very high price, knowing all the while they will accept much less and still
make a handsome profit. They will quickly sense when a buyer knows what they
are doing.
3. Maintain bargaining process with a series of
bid-offers. Start below your pre-determined value and do not go above it. Be prepared to walk out. Employ a series of tricks and techniques to
bring the price to, or below, the price you are prepared to pay. For instance,
you could say ‘the guy down the road had it for this price’ or ‘my friend paid
this price’ and so forth. There are often dozens of shops filled with the same
crap, so you can shop around if time permits, and it’s unlikely that the
inventory is worth very much, because the sellers often can’t afford the
capital investment – translation: the stuff isn’t worth very much, so you can
get it cheap.
4.
Turn the ‘close’ around by saying, “I’ll take
it for this, you are happy and I am happy,” or something like that. Add a smile
if you like. If it’s not working, just leave, and realise your disappointment
and not having purchased the item will quickly be replaced by a sense of
satisfaction at your negotiation prowess and not having paid too much. And
besides, you’ll probably not even want the thing after you sleep on it.
I bought a Rajasthani
police jacket for NZD$20 in Jodhpur. It’s been my constant companion throughout
the trip, and has protected me from the cold. For all I know the shopkeeper
picked the jacket up off the side of the street. Doesn’t matter. I determined I
would pay no more than INR1,000 for it. First he said INR2,000, I countered
with INR800 and quickly got to INR1,000, to which he said INR1,500, to which I
said, no INR1,000 and so on. I’m not sure if he was happy (he probably was) but
I sure was.
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| What bargains lurk down these alleyways? |
So the next
time someone tells you about the bargain they got, and the haggling they had to
go through to get it, why not delve into some economics, some human psychology,
and some general bargaining techniques, and maybe the value of the education
will be far in excess of the value actually paid for the item.
And finally,
good luck!
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| Errr, can we negotiate over that blanket? |
***
There is
another side to this. Whilst I think I am a smarty-pants, an able enough
negotiator and so forth, what I also am is a continual sucker who doesn’t
follow his own rules and falls too easily for any old trick. My desire for the item in question eventually overrides all.
There was
one little incident in Myanmar – about a month or so after the conclusion of
the Indian trip – that truly bought home what a sucker I am.
I was on a
busy street corner in Yangon. The sun was still very hot, even though it was
late in the day, and the traffic had started to build up for the past half an
hour. As usual, I was waiting for Swags to sort his life out. I believe in this
particular instance he was buying some underwear. I sat down on the curb,
realising that the man had to make a decision and it might be a while, and I
just happened to start scratching at my digital Casio watch, which by now had a
few scratches in it.
A man
spotted me an offered me a plastic film to put over the watch face, and thus
conceal the scratches, and preserve for future generations (future son: don’t
be disappointed with a Casio digital instead of a Rolex). He took what was
basically duraseal out of a shoe polish tin, and offered me 1,000MMK. That’s
about NZD$1.25. I said no, and wistfully requested he stop hassling me.
Nevertheless,
intrigued, I stared to play with the watch again. He placed the film over about
a third of the watch, and began peeling it back from the white paper backing it
was on. I hummed and erred. He said 500MMK, which is about NZD0.60. I hummed
again. He started peeling back even further, and when it had just about come
fully off, I said “okay.”
He employed a
classic sales tactic and bargaining tool: put in the customer’s hand the object
they desire (money, or object), thereby almost forcing them to accept.
Whilst I was
outwardly chuffed at my smooth new watch surface, I saw the gentlemen who did
it for me turn around and show his friend the shoe polish tin. They laughed
mightily together, with frequent pointing to the ‘2000’ cello-taped on top of
the tin, and the 100 or more ‘watch surfaces’ inside. And, after Swags returned
from undie shopping he said:
“Why did you
buy that for?”
Lesson
learnt. Sales tactics are effective, and it’s inevitable that you will fall for
some. I know it was only 60 cents, and in the end I guess it was a pretty cheap
lesson; and besides, to this day, I still have my shiny watch surface J
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| Somewhere north of Yangon... |
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