Why Some Cultures Have to Negotiate

By Michael Lee

Did you ever notice that some cultures just seem to have to negotiate every transaction – big or small? You might even tell them that the price of your product or service isn’t negotiable and yet they still persist. Why don’t they get it?

The answer is simply, “cultural differences.” There are two types of countries in the world – negotiating and non-negotiating. The United States is a non-negotiating country where we only regularly bargain over the very largest purchases such as cars and houses because here money is relatively plentiful while time is a scarce commodity. In fact, we have a saying that, “Time is money.” For instance, in 2004 the average American worker earned $3,156 a month. We wouldn’t bother to haggle for an hour to save five dollars because it just isn’t worth our time.

Yet, most of the world is composed of negotiating countries where money is scarce but time is relatively plentiful. In 2004, the average annual income of a worker in India was $52 or about thirty-two cents an hour for a forty-hour work week. In places like India, Asia, Latin America, the Middle East and elsewhere saving five dollars can be significant because it could make the difference between a family eating well and starving so negotiating is not only important - it is essential. In these cultures people will haggle over almost everything they purchase or sell all day long so they become masters at it.

In fact, negotiating is an essential part of their purchasing process to a point where they feel cheated if there’s no opportunity to haggle. In America we regularly walk into stores and pay the sticker price without ever thinking of asking for a discount whereas in negotiating cultures this would be the definition of insanity. For instance, American auto dealers and retailers who refuse to negotiate the price of their products will often find Hispanics, Asians and others from negotiating cultures reluctant to buy because, without an opportunity to haggle, they just feel they paid too much.

You can see that when people from negotiating cultures come to America they bring a negotiating mindset with them and if we want their business we must learn to bargain more effectively. There are many ways to improve your negotiating skills such as reading a book, taking a class or just going out and practicing. Start by going to garage sales and becoming comfortable with the process and then graduate to flea markets where the sellers are more experienced. Next, visit establishments where prices are not set in stone like antique or collectibles stores and haggle. The masters’ course is going to places where prices are seemingly-fixed such as department stores and trying out your negotiating skills. The doctoral level is bargaining over cars and houses where the stakes can be very high.

As you hone your negotiating skills over time remember the three basic rules of master negotiators:

1) Never take “no” from someone who can’t say “yes.” A retail clerk who is being paid an hourly salary has no incentive to give you a break on price to make a sale. However, most managers have the authority to give at least a ten percent discount to keep a customer from walking out the door without making a purchase.

2) Never make the first offer. Once you name a price there is only one direction you can go from there – up. As a buyer, try to get the seller to make the first offer by saying something like, “I really like this but it’s just in my budget. How much would you really sell if for?” As a seller, you can simply say, “Make me an offer.”

3) If you must name a price always ask for more than you think you can get. If you’re the buyer and are forced to state a specific amount make it much lower than you think you could ever get it for. If you’re selling an item make it a princely sum just to get the talks started. The worst thing a good negotiator ever wants to hear when stating a price is the word “Okay” which means you could have done better.

If you want to get as good at negotiating as Asians, Hispanics and others you must make an effort to practice every day just like they do.

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