While working with entrepreneurs, I notice they develop an ability to make failure cheap. This idea is fleshed out by Scott Anthony a bit. Essentially it is ability to design a system so that if and when failure occurs it does not cost very much.
I naturally apply this method when traveling. When I went to India, it had been nearly a year since I had experience negotiating cross culturally. My negotiation skills were fairly weak and knew I needed to get the bad deals out of the way in a hurry. So I sought out some inexpensive items to being with and negotiate away.
The first deal was for these furry slippers that would be perfect for my dad. I casually look at them then begin to negotiate. I hit all the points of the deal.
1. Interjecting deal talk with relationship talk. I learned the young man was from Kashmir.
2. Grouping items, so that you have multiple elements within the negotiation. I added another pair of slippers and a hat. I would add volume and drop price, then drop volume and and keep price.
3. Force the deal. I put the money I was willing to pay in his hand.
Once I finished the deal and the Kashmiri guy accepted the money. He started packing my items in a nice bag. This was a bad sign. If you strike a really good deal, the vendor will just take your money and let you walk away with the items without a bag. By his courteous bagging of my items, I figured I payed about 15% too much.
After the slippers were bagged, the guy told me that if I was ever around I should enjoy tea with him. This was a further indicated that I paid too much. He was really happy with the outcome of the deal. After this invitation, I suspect I paid about 20% over what more savvy bargainers pay.
Then he said something I will never forget, "you are my friend. No, my brother. You are my brother." He probably said this because he will use what I paid for a down payment on his dowry. I must have really gotten taken.
It turns out that I had forgotten to walk away at least twice. I had also forgotten to bargain in earlier in the day, as I have more time to shop around. I was rusty. I am glad I got this deal out of way for inexpensive slippers.
only 20%? sorry dude. unless the guy gave you seriously dirty looks, he ate your lunch. we've found that you're never gonna eat his lunch cuz he just won't sell *it* to you. Unless it's a service, at which point it's harder to negotiate. when push comes to shove, my gut valuation of a service done poorly will still be higher than his valuation for top performance.
ReplyDeleteOne time I discussed well and argued a rickshaw down to the Indian price only to see that he had but one hand. I was smugly proud of negotiating the mandated 80 cent price only to be shamed by his actions and status since he uncomplainingly received what was agreed upon.