Deal or No Deal

Anyone who has been to Southeast Asia (or anywhere outside the United States and Europe) knows that the price you are given by a vendor is not the price you are going to pay.  That is because we Westerners are an easy mark, perceived as a walking ATM machine that doesn’t know any better than to pay what they ask.  I’ve become a spendthrift since I arrived here, becoming agitated when I find a restaurant down the block that serves rice for a dollar or two cheaper than the one I just patronized.  When the proverbial spigot is turned off, you become acutely sensitive to the thickness of your wallet.  All this is a way of saying I try to bargain as often and as hard as I can.   I now have experience negotiating with people in three countries, all of which have a different profile.  But first, the rules.

You are not supposed to enter into a negotiation unless you have the intention of buying something, as it is considered bad etiquette.  Only start the bargaining process if you actually have some interest in buying the product.  I learned this the hard way in Vietnam, where I got some dagger-esque stares after walking away from a potential Brazilian football (soccer) jersey deal.  Also, remember the context of the situation.  You are representing your country, and probably make more in a day than the people you are bargaining with make in a month.  I am the exception, of course, since I have a steady income of $0.00 per month.  Still, while it is fine to bargain, it’s not always important to get the product for just over cost.  You don’t want to rake them over the coals and, in the process, reinforce a stereotype about your country being cheap.  Remember to smile and keep it reasonably lighthearted.  You will probably get a better deal that way anyways.  I started to read about Rational Choice Theory, Pareto optimality, and Nash bargaining solutions in preparation for this section of the article, but the opportunity cost of teaching myself game theory is too high.  As much as I’d like to learn about the mathematical theories behind bargaining, it’s going to have to take it’s place at the back of the line.  Now to the differences.

1.  Vietnam

A stall in Ben Thanh Market

Negotiations are fierce, as far as I can tell.  It was the first real stop on my tour, and I didn’t have the chance to buy much.  The first experience was in Ben Thanh Market, a violent battleground where the weak are chewed up and spit back out.  This is a place, however, where the hard-nosed traveler with the instincts of Morrie from Goodfellas thrive.  Many of the brand-name products that are popular in the West are manufactured in factories in and around Ho Chi Minh City.  You can buy authentic North Face backpacks for $10-$20 here, and they will last.  One of my traveling companions bought her Lowe Alpine (written as “Alpine Lowe” in this case) here four years ago and still uses it today.  I tried to bargain for a Brazil national soccer jersey (yellow and green).  She started at 330,000 dong ($16), down from 360K.  I countered by asking the price for two.  She said 500K dong – not a good deal.  I said I would look elsewhere, and she grabbed my arm and started to pull me back in, asking what I’d pay.  I said no thanks, and she grabbed my arm with two hands now, putting all of her weight into dragging me back into the stall, shouting lower and lower prices at me.  After prying her fingers off, I left.  As I was leaving, she shouted “100(,000) for two!”  At that point, I should’ve taken the deal, but I’d gotten there yesterday and didn’t feel like carrying around two shirts for the day.  She gave me the evil eye as I walked away.

Later I bought a pair of Ray-Ban sunglasses.  I got him down from 200K dong to 60K ($10 to $3).  I was proud of myself, until three days later when the lenses fell out.

Verdict:  Junior Soprano said it best when negotiating with Hesh about taxes for the new boss.  But if you walk away, you’ll get a good deal.

2.  Cambodia

Negotiating here is a little more pleasant.  Vendors will come after you and follow you around the block if you show interest, but a firm rebuke and they will leave you alone.  I came close a couple times to smacking a few around in Angkor Wat, but I restrained myself.  They say to start the negotiation process by countering at 40-50% of the initial price.  I usually started at 20-30% (it went progressively down as time wore on), and usually ended up at 40%.  You can probably go even lower for a lot of things, and it’s possible to find out their break-even point by checking with a few.  Still, the negotiation process is straightforward.  You bounce back and forth 3 or 4 times, start to walk away, and they give you your price.  Over the course of the week, two t-shirts for $1.50 each, a couple of kramas (traditional Cambodian scarves) as presents for the women at NWTF, a North Face pack for $10, a pair of sunglasses for $3, which I’m still wearing to this day.

Verdict:  Cambodia is a good place to bargain.  Easy for the uninitiated, straightforward.  Hold your ground and walk away and you’ll get a good price.

3.  The Philippines

As far as I can tell, you can’t really negotiate too much at the places I’ve been.  The caveat is that I haven’t bought too many things on the street.  When I do need something, I go to 888, the local Chinese super-mall.  It is a maze of used and knock-off clothing and jewelry stores.  Bootlegged DVDs, brand-name clothes, the works.  I have bought a couple of collared shirts with a map of the Philippines (trying to be professional), a Swatch wristwatch, and a pair of Sanuk sandals.  The sandals were 500 pesos, or 11 bucks, but that’s because they are “genuine knockoffs.” In the greatest marketing trick of all time, they go for $80 in the US.  Still, they are the most comfortable pair of shoes I’ve ever owned.  The watch lasted exactly 26 hours, before I knocked it off a table and it stopped working.  Fortunately, it was only $2, so I’m going back next week to get another.  I went with a Filipino, who did all the negotiating for me.  She was able to knock 20 pesos (50 cents) off the price here and there, but nothing big.

Verdict:  Probably somewhere, but not where I’ve been.

These are some thoughts on bargaining in Southeast Asia.  In March I head to Thailand for two weeks, Laos for a week, and back to Vietnam for another 3-month stint with a different microfinance institution.  I will let you know how it goes.

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1 comment for “Deal or No Deal

  1. Hank Reardon
    January 21, 2010 at 5:47 pm

    great post. I have found the same thing in my travels in Asia. However, one can never be sure whether what is purchased is a “knockoff” even if made in a factory and even if assured to be “the real thing” In China there is a hidden area of Shanghai with a higher grade of “knockoffs” of famous clothing manufacturers.

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