Last month I had the good fortune of travelling through Thailand. It was a fascinating experience that got me thinking about how different cultures negotiate. In Thailand, there aren’t many fixed prices when negotiating with the locals, especially when it comes to taxi rides, new suits, jewelry or other items commonly picked up by tourists. Everything is open for discussion and the price can fluctuate significantly depending on how skilled you are with negotiation. Over the past couple weeks I came up with five tips that when followed, will allow you to realize your potential during any type of negotiated situation, whether it is in a Thai tailor shop or at home when discussing your remuneration at your new job. Ultimately similar principles always apply.
Get a baseline on a fair price before even entering the negotiation.
Information is God when it comes to negotiating. In Thailand, in the old days, vendors had a significant advantage over newcomers. The currency they were talking about was their own, the quality of the product was only known by them and information for the buyer was scarce. The internet has changed all that. Nowadays, fair prices for just about everything are posted online, so you should be able to enter into negotiations with a fair range in mind. Same goes for negotiation around salary. Consider googling similar roles to get a baseline on where you should start in your negotiations. The more information you have, the more able you are to explain to the other party where you are coming from.
Breath, consider, breath again and if you need to, take some time and come back later.
Pressure selling is a ubiquitous tactic that can push you to accept an offer that you shouldn’t. In Thailand, because there is so much competition on the streets of cities like Bangkok, many vendors (quite rightly sometimes) figure that if they don’t pressure you into a purchase, they’ll never see you again. If you have the time, use this to your advantage in the negotiation. Ask what their best price is and let them know that you plan to check with several other retailers and will come back. By bringing multiple parties to compete for a lower price, you can gather more information on your product and make a better informed decision when it comes to a fair purchase price. Same goes for negotiating a salary. Take some time to consider the offer. You usually won’t be pressed into immediately signing on the dotted line if it is a fair salary. If you are pressured, take that as a (bad) sign.
Smile like you’re on Candid Camera.
Staying calm and friendly is important in any negotiation. It’s all too easy to have the adrenaline shoot through your system and make you think and act more aggressively than you may wish to. Be sure to slow it all down and (especially in countries in Southeast Asia) stay smiling. Even at home in Canada, if you’re negotiating on a bigger ticket item (like a new car), staying friendly and not taking the back and forth personally are important in the long run. Using win-win language described in Getting to Yes will keep everybody smiling.
Remember, you get what you pay for.
While it’s easy to spot the scams of less sophisticated operators (ie the street vendor selling Rolex watches for $10), more established shops also have their own gimmicks aimed at encouraging impulse buying. While you should expect discounted costs, don’t expect it to be too cheap. Also, be aware that you’re likely to pay more than locals regardless of how good your negotiation skills are because you’ve been marked as a foreigner (and thus a walking ATM) the moment you walk in the store. This rule applies even more in developing countries. After all, if you paid $2,000 for a used car, would you expect it to be anything other than a lemon?
Both sides should have walk away prices. What’s yours?
Any vendor you are negotiating with has a very clear price point that they can make money with. So why shouldn’t you have a similar price point you’re willing to pay? While your walk away point may be much higher than the vendor’s at least it’ll save you from making a bad impulse purchase in the heat of negotiations. Ultimately whether travelling or at home, it makes sense to go into a negotiation knowing what your bottom line is.
Ultimately if you follow these tips within your own negotiations, be it travelling in Southeast Asia or striking a deal back at home, you’ll hopefully avoid any future second guessing about whether you got a fair price for your latest purchase.
Creative Commons photo courtesy of Mikhail Koninin