Nickel and dimed to death: A master's class in haggling

When I was in sixth grade, my parents took me to a conference in Mexico City. Wandering through the markets and buying things from street vendors, I was amazed to discover that prices weren't always set in stone. Unlike salespeople in department stores, street vendors expected me to bargain, to demand a better deal. I took to haggling like a fish in water.

Having gone shopping with some world-class hagglers, I won't claim to be anything but a rank amateur. Still, every so often, when I find myself in an open-air market, I like to try my hand at horse trading. Although I'm not all that good at it, haggling is one of those things that, if it goes well, makes you feel like you've won a little victory. Even if you've only shaved a dollar or two off the price of an item, the hard-fought battle makes it a little more dear.

Recently, I visited Tijuana Mexico for the first time and received a master's class in haggling, which is a nice way of saying that I ended up a little black and blue. Used to the relatively restrained tactics of Eastern European or South Asian vendors, I wasn't ready for the hard-knock, balls-to-the-wall methods of Tijuana's salespeople. To put it mildly, wheeling and dealing in Tijuana is a bloodsport. That having been said, I emerged with my skin (more or less) intact, along with a renewed respect for some of the basic rules of haggling:
Rule 1: Know What Things Are Worth: The standard technique for a street vendor is to offer you a "deal" that is significantly less than what he claims that he would usually charge. Thus, even before you've gotten your bearings, you've been hit with two prices, the "real" price of an item and the "bargain" price that he is offering you. In truth, however, the "bargain" price is vastly inflated. In Tijuana, for example, I generally found that the "bargain" price was five to ten times the actual price that I wanted to pay for the item.

The vendor will expect you to come back with a counter offer. However, by inflating the price so much, he is trying to ensure that your counter offer will be similarly inflated; after all, you don't want to offend him with an insultingly low bid. Ideally, he is hoping that you will offer half the price that he started with, and the two of you will work your way up from there. This is where a little market knowledge comes in handy. For example, if you know that a bracelet retails in your local department store for $10, then you realize that any reduction of that price will be an improvement. Thus, when he offers to sell you a bracelet for $50, you might offer him $3. He will come back with $20, you will offer $4, and you will go back and forth until you end up with a mutually agreeable price. The key here is realizing the maximum that you are willing to pay, which gives you a guideline for further negotiations.

Rule 2: Be Ready to Walk Away: In previous bargain sessions, I found that walking away from a deal was a wonderful negotiation tactic; in Tijuana, I found that it was vitally necessary. If you make it clear that you are willing to walk away, a motivated seller will often lower his prices considerably. After all, he's dedicated a certain time to making a sale and doesn't want to lose it. Generally, you will only want to employ this tactic when you think that the negotiations have reached a stalemate and the seller is not inclined to budge.

A word to the wise: this tactic only works if you really mean it! If you start to walk away, then turn back of your own accord, the game will be up. You will, essentially, convey to the seller that you can be easily swayed. Even if you don't end up paying the price that he is asking, you will definitely not get him to agree to the price that you want. So, when you walk away, be prepared to turn your back on the sale.

Rule 3: Use the Buddy System: If at all possible, you really want to have someone with you when you haggle. The friend's job is to tell you that you can find a better deal elsewhere, that the vendor is asking too much, or that the item in question is poorly constructed. Basically, he (or she) plays the bad cop to your stupid cop, "saving" you from making a particularly bad deal. Although this is partially a game, it is also somewhat serious: when you get caught in the middle of a spirited "negotiation," it can be easy to lose your bearings. The confederate keeps you balanced.

The buddy doesn't have to standing by your side. Before making a big purchase, for example, you can call your wife or significant other and ask if a particular item costs too much. By setting a maximum price, your unseen friend can help you control negotiations.

Rule 4: Make It Clear That You're Serious: In Tijuana, merely being a Yanqui is pretty much enough to ensure the vendor that you have the wherewithal to make a purchase. However, in many bargaining situations, you will want to convince the seller that you are serious. After all, if he is going to get into a spirited negotiation with you, he wants to be sure that you're actually interested in buying. For this reason, it might be worthwhile to tip your hand a little. Let him know how much money you're willing to spend, and make it clear that you are willing to spend that money today.

Rule 5: Don't Lose Sight of the Goal: While you might end up becoming very friendly with the vendor, you should be careful to remember that your purpose isn't to make friends. You will sometimes find (particularly in Tijuana) that the vendor will start playing to your emotions. He might tell you about his children, complain that he isn't making enough money off the sale to feed his family, ask you why you are torturing him, and so forth. A key element to remember is that the salesman isn't your buddy. He won't be there when your car breaks down, he isn't going to bail you out of jail, and he's not going to get you drunk when your girlfriend leaves. No matter how much he might try to play on your heartstrings, he is, in fact, a clear-eyed businessman and will use every tool at his disposal.

Having gotten knocked around a little bit in Tijuana, I've decided that it's high time to polish off my bargaining skills a bit. Next stop, Chinatown!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He once tried haggling at a tollbooth and only narrowly avoided getting arrested.
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