How I Learned to Negotiate

I recently returned from a business trip to Shanghai.  While I was awestruck by its size (25 million people), modern look (75% of the world’s construction cranes are in action there), traffic (I’ll never complain about Chicago’s rush hour again) and friendly people, I re-learned how to negotiate.

Our firm has taught negotiation skills classes to professionals for over 20 years and I was in Shanghai to teach an advanced negotiation seminar to a client’s China sourcing representatives. I arrived a day early in order to acclimate, and didn’t return home until the following Saturday.

I got two opportunities to visit several markets, where just about any consumer product could be procured.  The markets were filled with locals and foreigners alike, all searching for bargains.  My wife had asked me to find a particular bag, although I learned that the Chinese government had cracked down on the famous “back rooms” where “designer” handbags could be found.

Serenaded with “Mister,” “Trench Coat,” and “Backpack,” I accompanied my client on the hunt for Tommy Bahama shirts.  She had visited one particular shop a number of times and was known by the clerk/owner when she arrived.  She said, “My friend is looking for a bag,” and the response we got (I have learned) is quite common…” Come see my sister.”

We were escorted to another shop and taken past the back room, to a back, back room. Here’s what I learned or remembered:

Tip 1 — Go Early

Merchants seem to feed off the mayhem of the crowd. The more people in a condensed space, the more crazed their attempts to lure you in, almost pleading in one or two word questions: “T-Shirts?” “Watches?” “Luggage?” “Suits?” “Scarves?” “Watches?” “Child’s clothes?” “Ties?” “Shoes?” “Watches?”

Tip 2 — Listen to the Rap

The rap revolves around a calculator, where the first offer is made by the merchant. “This would be your price.” However the number is always quickly erased, another number is punched in and you are told, “This is best friend price.” How did we get so close so fast?  Anyway, I was offered the “your price” of 1,500 RMB (about $240), followed by the “best friend price” of 980 RMB (about $156).

Tip 3 — Start Low

You’ve got to have a number in mind, and put it on the table no matter how ridiculous it seems. “I don’t think that’s worth more than 450 RMB (about $71). You will almost always be met with, “I’ll lose money on that.”

Tip 4 — Threaten to Walk or Walk

The game is afoot, and you will now start trading numbers.  “How about $600 RMB?” I respond, “How about if you add the matching wallet?” “I’ll give you that for $200 RMB.” I respond, I don’t think that’s going to work for me, and I start to walk out of the shop.  The next thing you know, someone is (gently) grabbing your arm.  The further you get from the shop, the lower the price gets. “OK, both for 750 RMB.” I respond, “How about both for 700?” “OK!”  (I’ve just spent $111.)

In negotiating, if you can live with the outcome or you’re thrilled (or anything in-between) you’ve taken part in a successful negotiation.  I brought home a bag and a wallet and my wife is thrilled.

That’s a good negotiation.

However, if the authentic looking, feeling and writing Mont Blanc pen I bought for just under $3 is any indication, I probably got hosed!

ZEHREN♦FRIEDMAN offers a full range of negotiation skills courses to help you negotiate better.

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