How to Negotiate in a Foreign Country
You just arrived in China. You don’t know the language, you barely know the culture, you are only there for 2-3 weeks so you won’t have time to fully immerse yourself to learn properly. So you ask yourself, how could you possibly even try to negotiate with these people? Trust me, you can still negotiate just as well in a situation like this. Let me teach you how to negotiate in a foreign country.
How to Negotiate in a Foreign Country
First of all, negotiation is a game of push of pull. The seller wants to make the sale, at the highest price he/she can, and you want that item, at the lowest price possible. So how can you get to that balanced price where both buyer and seller are happy.
Have a maximum price in mind – I can guarantee the seller has a minimum price he/she would sell at, but getting to that price will be difficult. You need to be prepared and also have a maximum buying price in mind. This requires that you have an idea what the item usually goes for in the area.
Educate yourself on average prices – Should a kilo of rice cost 50 cents, a dollar, or 2 dollars? Although these margins are not high compared to when living in the Western world, the costs add up quickly if you are traveling for a long time. A few ways to educate yourself on the right prices include:
- Numbeo.com – use this website to get an idea of the average price of just about everything you would need in specific cities around the world. This website is continuously updated by travelers so it usually gives you a good idea of the price range.
- Ask your hostel/hotel owner – The prices they give you may be higher than the actual price at the market. This is completely normal as they are trying to help their fellow locals. Nevertheless, it still gives you a general idea of the prices around the area.
- Ask an expat – If an expat has been living in the area for more than 2 months, he/she probably is beginning to get things at the local price. As them for their insights.
- Don’t buy from the first quiosk you find! – Ask for the prices. Say thank you. Move on to the next one that didn’t see you speaking with the first quiosk. Repeat. By the end you will find out what the average prices are for everything.
- Best option is to ask a local friend – if you can manage to make a local friend, you will gain all the most accurate insights in the easiest way. In most countries, a lot of locals want to become closer to you to practice their English so as long as you are open minded and accept their invitations for a drink or whatever else, this is definitely a viable option.
It is important to mention that in many cultures, negotiation is at the very root of everyday life. For example, if you are in Morocco, taking an hour to have a drink and negotiate is a sign of respect. If you are in China, if you don’t negotiate you will often times be paying 5X to 10X the price, and every local knows it and negotiates down to the actual price.
Different Types of Negotiation
Often times when you are in a foreign country the negotiation consists simply of finding out the right costs of each product. I suggest you ask a few people for the right prices of a kilo of tomatoes, fish, and anything else you would want from a local market. Some people you can consult are your hostel/hotel owner, expats that have been living in the area for a few months, and random people you cross on the street who approach you to practice their English or simply say hi.
First international rule of thumb: NEVER buy from the first person you meet. It doesn’t matter how alluring the price may seem, you should always look around and do your proper research. I once made this error and impulsively bought a broken down motorcyle in Vietnam. I had to sell it back the next day because I realized that although the price was great, I had no knowledge of fixing up motorcycles, and ending up losing money on the sale as I had to move on to another city and get rid of the bike quickly. Please don’t make a similar mistake!!
Before taking a taxi or bus, try to negotiate your price ahead of time to avoid paying 3-5 times the price. I once had to pay a taxi $25 for a trip that should have cost me $5, because I didn’t check the meter and he had started it well before we entered the cab! Let’s just say I learned my lesson.
Now I always ask the price ahead of time, or check the meter if it’s a cab. This saves me money and time, and avoids the unnecessary confrontations at the end of the cab ride.
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I don’t know much (yet) about international business negotiations but I suggest you check out this great LinkedIn article for more info on this type of negotiation.
One thing is certain, you will need to know the culture enough to avoid making any faux-pas, and knowing some of the language is most definitely an asset.
Unless you are traveling in the most touristic areas during high season, the general rule is that you have the upper hand in negotiating a good deal. Think about it, other than during high season when everything is completely sold out, the rest of the year all these hotel, hostel, and homestay owners are doing every thing they can to fill up their place. The competition between businesses is fierce, and therefore some are willing to bring down their price.
There are 3 ways to bring down the price
After deciding what price you are willing to pay, go to an area where there are many accommodations that offer rooms in your general price range. Explain you are willing to stay x nights (the longer the stay the easier it is to negotiate), and that you can only pay x dollars per night. They will either say no, or ask for a bit more.
If you speak another language, now is the time to use it. Start conversing with your fellow travelers and by the end answer to the manager that unfortunately the price is too high. 2 times out of 3 they will bend and offer it at the price you asked.
In the event that they didn’t bend, then say thank you and start walking out slowly. As you are walking out of the building, they may say “ok we will give it to you at that price”.
If you put in the effort, these tactics will always work. In one of my first trips to Vietnam, my gf and I were only willing to pay $10 USD at most for a private room, so we often times had to see 5-10 places before someone accepted. But every time we put our minds to it, we were able to find great accommodations at the desired price.
I’m sure you can to! =D
So there it is, your friendly guide to how to negotiate in a foreign country.
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Until next time,