Bargaining in China

Many western people are not used to bargaining. We go to the shop, see the price and make a purchase. How simple. Even companies such as Carmax, advertise that you don't have to bargain (as if this is a positive thing!) When we go to China, we have a couple of things working against us: language and asymmetric information.

Your natural inclination as a Westerner is to be kind and not bargain with Chinese people. After all, you just arrived, and you are not to sure of your footing. This is a mostly passing notion that goes away once you have spent more than a couple of weeks in China. The population density of China (I don't like to say overpopulation) is conducive to aggressiveness. However, before you learn the language; it is daunting using a calculator to convey everything you would like to say. In the future, this blog will deliver some key phrases for your bargaining pleasure, so stay tuned.

Second is, we stay in an American mindset when we travel for short periods in China. We imagine how much something like this would cost in Walmart. Walmart buys from China, and so they pay a lot less than we would at retail. We generally don't realize how cheap things are to produce in China. If we have the money to travel to China, traditionally you are either wealthy/middle class or the children of at least middle class upbringing, so we have no ability to comprehend the cheapness of labor in developing countries and the price level difference. This is especially true if you are going to China and staying at 5-star hotels and drinking your daily Starbucks. They know how much they paid for what you are buying and no matter what happens, they will come out ahead. Traditionally, Chinese have said you should offer 10% of the asking price, and pay no more than 25%. This rule (guide) is especially useful if you do not speak Chinese, because I assure you, if you do not speak Chinese you will pay a premium.

In the end, if you feel that you getting a steal from them, you probably are not. However, if you are traveling in search of a connection, there is nothing so primal and fun in capitalism as going to a street market and negotiating smart with someone from across the world. I promise the time when you fought for a deal in the street market and got what you wanted and what you considered to be a good price, will be one of your most treasured memories in China.