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Do You Believe in Bargaining?

By Edited Mar 30, 2016 0 0

I find it very frustrating and rather annoying that people in the West really do not think to bargain more. They therefore can fall victim to the greed of others who are clear at comparing economic situations and capitalizing on this.

It seems to me here in India that the system of bargaining has always been a simple one when it comes to foreigners. The tourist asks the price and the vendor asks then how many they will be buying. It is this question that makes me realize that the price will be negotiable however many you are buying!

OK so you tell them only one – so they ask you for a price 2 – 3 times more than they expect to get anyway. I offer a third, we haggle up and down and settle normally around half of the original price.

Unfortunately, here is the stupid part – Some foreign tourists will pay the first quoted price! Others may say it is too much. The vendor then may offer 10% off and they decide to accept this as a good offer. Vendor wins big money.

This also happens in shops when you have already agreed to buy something and the vendor tells you that he is giving you a further 10% off as a favor. Ha - As a favor? You should now realize that the price has been inflated by much more than 10% so you have now agreed to pay for his greed.

The bargaining system is ingrained in Eastern countries and they have grown up with it. It is like a game they love to play as well. Otherwise, isn’t shop-keeping rather boring? After all, all you are doing is tending a stall of fixed prices – anyone can do that. But a real shopkeeper is trying to line his pockets with as much as he can – it is his livelihood after all – but he does really love the game.

Bargaining IS fun for all concerned and I love it. It always ends in smiles as well as a real sense of satisfaction and a handshake once the deal is done.

However, in a Western society we tend to be pressured, rushed and just want to get in and get out in the fastest time possible. We are used to being sold and accepting without querying prices. Thus we tend to bargain hunt by searching a few shops to find the best price for what ever we want. But this is not participating fully in the interactive game of real bargaining.

In India I have seen Westerners take whatever inflated price they are happy to pay if it seems reasonable and is cheaper than they would pay at home. They don’t bargain back home so they don’t want to here. Maybe they feel uncomfortable bargaining for some reason.

This is why so many shops in India now display the “fixed price” sign. The shopkeepers realize that some people prefer to shop without personally bargaining,  so they attract people in them by telling us we can get a "fixed" price - it will no doubt STILL be an inflated one! The tourist then roams from shop to shop to find the “best” price (as they do in the West) but rarely experiences the fun game of true bargaining.

Everyone in a business environment expects that the client will want to get a good price but many will not ask for discount or negotiate their prices. Thus the Indians capitalize on this when it comes to foreign tourists.

Shops are making a good mark-up whether fixed price or not, but you are deprived of the really fun experience of bargaining in the case of fixed price shops. The vendor never loses either as they will not let you pay less than they know will cover their overheads or they would be totally crazy. There are odd exceptions to this but they tend to only allow articles to be sold for cost price if they know you and undersatnd that you will give them further business. It is a gesture of good faith.

Not bargaining is madness when you see the results. Just because it is cheaper than at home does not mean it is a good price for the tourist and this is where the more knowledgeable or long-term tourist or local can suffer.

I have seen tourists pay MUCH more for an item than they would pay in a shop like Primark in the UK - where the goods originate from India AND are better quality than the item just purchased here!!!! I thus work on the principle that if I can get it in London for that price at Primark then OK – if not – forget it or bargain further!

Unfortunately of all the seven sins I feel that greed is the most prevalent in this day and age. Greed breeds more greed and when the Indians in Goa see someone paying 2 – 3 times more than he knows it is worth, he will then EXPECT everyone to settle for a higher price. This is not just with shops though – this crosses over to accommodation and hotels booked through the Internet.

Prices in fair business should really always be cost + a mark-up – this is acceptable business practice everywhere. Several years ago when I ran employment agencies we budgeted on an AVERAGE mark-up of 29% for temporary worker supply. This then accounted for our pay rolling, tax and small profit. Our clients knew it and accepted it also.

Thus we could negotiate some prices when it came to bulk business and I did this effectively on a regular basis, so that eventually I was promoted and responsible for the national account handling of large multinational businesses such as IBM, Honeywell and Wang.

In fact, even in the shops in the West most prices do seem to be negotiable – I recall one year when I was in London I negotiated with an Optician from whom I was buying contact lenses – for a pair of glasses as well as the lenses I secured a 15% discount on total price.

So it strikes me that if we are too timid or proud to ask for a reduced rate then we have to settle for the price displayed. If however, we are prepared to have our request rejected then we can bargain and often get a good result.

After all, in the worst case scenario we will only be denied the bargain!

Thereby possibly hangs the real problem with some people – they take rejection personally and can’t handle it…………….. so don’t risk asking in the first place!

Thank you for reading

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