How to Negotiate, Chinese Style

In late September of this year, I endured the 15-hour flight to Shanghai so that I could see my beautiful daughter Madeline, the 6’1” blonde college freshman (NYU Shanghai) who has herself become the subject of weekly marriage proposals and daily photo requests from the locals (stories for another time).

No doubt you have heard of the counterfeit trade that exists in China. Watches, clothing, electronics, cameras, and just about everything else you can think of, complete with brand names and labels, all for sale at bargain prices. Trust me, the untrained eye would not be able to differentiate fake from real. Even the packaging is dead to nuts perfect.

When Madi said she wanted to take me to see them, I envisioned a dark alley and nervous Chinese vendors looking left and right as I examined their wares in the suitcase that they held open. Instead, we boarded the train, road a few stops, and disembarked to find what looked like an endless kiosk mall in every direction and as far as the eye can see, brightly lit, guarded by security, and completely out in the open. It was all right there at the train stop!

It was here that I learned the finer points of Negotiation.

I knew going into that Saturday that there was plenty of room for improvement in my negotiating skills. My daughter read up on what to expect and told me the following, “They will give you a number. Give them a price for 1/10 of that. They will act as if you’ve taken food from their children but don’t back down. Keep saying no and walk away.”

It was that last part that made all the difference. The vendors were chatty, spoke passable English, and reacted exactly as Madeline predicted. Funny, they never actually spoke any prices. Instead, everything is done on a calculator that gets passed back and forth. Not quite sure what that practice is all about. But eventually, all transactions came to an impasse. They claimed that they were below cost and I told him that I didn’t really want or need the thing that I was looking at. The difference maker came when we turned and walked away.

As a 30 year sales veteran, Bill has the perspective of a been-there, done-that sales rep in the commercial print arena. Following sales fundamentals and giving unapologetically "old school" advice, he writes and speaks in an entertaining fashion to make his points to sales people and owners who sell. "Bill Farquharson will drive your sales momentum."
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Comments
  • Norm

    Bill, I had a similar experience in Shanghai, while visiting my son. Toward the end of my 2 week visit (my son is an expat in private equity, fluent in Mandarin), we went to this massive 4 story warehouse-type building, filled with hundreds of merchants in makeshift shops resembling personal storage units. I wanted about 25 T-Shirts to bring home (along with 10 cashmere scarfs that my wife coveted). My son said "follow my lead". The young female merchant said "750 RMB for each shirt, locals price, not tourist price" and then went nuts when my son, speaking in Mandarin, said, "no deal" and proceeded to walk away (I am in tow, of course). She chases us down the hall. My son now sez…"200 RMB for all 25 shirts". She sez," too cheap, I will lose money" We continue walking, she continues in hot pursuit. She catches up and sez..225 RMB! My son turns to her and extends his hand to seal the deal. He later explained to me that the key element was not to move from your position as long as you knew that your position was reasonable. He also knew that there were 25 other vendors who could do that deal, so he had options. We left happy, although I kept staring at those knockoff Dr. Dre Beats Headphones at $10 US each. My wife got her cashmere after a similar headbanging.

  • Norm

    I meant to say…"750 RMB for all 25 shirts"

  • Marshall Hogenson

    Shame on you Bill. This is the worst blog ever.

    First this is B to C in a totally different culture. A culture where negotiation is a game of who can screw the other guy worse. This is the type of practice which has decimated the profits of printers and other businesses and is destroying small businesses who aren’t niche or have economies of scale.

    And then to brag of loading up on counterfeit merchandise?? Do you have no respect for intellectual property rights or even common honesty?

    What’s next an instructional on how to print currency during your presses downtime?