Money Talk

“And they say money talks, well it’s my spokesperson…”

Lil Wayne, “Hold Up” (2010)

My bargaining skills are outstanding (shout out to 15 years lived in 3rd world countries). Unfortunately, my powers are considerable diminished over here. Let’s face it: my skin tone immediately gives away the fact that I’m foreign. The fact that I’m foreign and in Shanghai is an indicator to merchants that I [most likely] have Dollar or Euro purchasing power. And they are right. I therefore have to resort to theatricality and deception in order to not get ripped off:

– I try not to look like your typical, oblivious, annoying tourist who’s shopping for souvenirs. Vendors know this species and that is why most places don’t have prices tags: the prices vary depending on your ethnicity, body language and attire (which is why I hate showing that I have an iPhone because it is equated to a symbol of wealth, thus ruining my bargaining power). I try to look confident like I know Shanghai just as much as they do. I also give the impression that I’m in a hurry and don’t have time to lose which means that this transaction needs to happen fast and to my liking otherwise I will be out there in a blink of an eye if I’m unhappy.

– Ultimately my level of Chinese gives away part of the persona I previously described. So I need a backup plan. Recently, I’ve used my two closest friends on this trip (Shanel Tage and DJ) to help me out with theatrics.

– When bargaining for our gym memberships I made Shanel (who had no interest whatsoever in getting a membership) inquire about the price and even request a visit of the facility. Along the same lines, I tell vendors that if they give me a good price, I’ll tell my other American friends (“who have more money than I do”) to come shop in their store.

– I only keep a small portion of my money in my wallet because they look at how much one has when one pulls it out. If they see that one has a bunch of bills, further bargaining will be a waste of one’s time.

– The oldest trick in the book is to start at 50% the price and concede to pay a higher price incrementally. But they obviously know this trick so it needs a few enhancements:

A trick merchants like to use is one where they tell you they won’t have anything to eat or feed their kids if they lower the price. They usually use that once you have them in what I call their Comfort zone (or Orange zone, see graph):

In the comfort zone, they’re still making profit but not the amount they had expected to. This is where one uses the second oldest trick in the book: walk away. Indeed, at this point one starts to notice little signs of frustration and indecisiveness on their faces. They could just not make the sale and sell that unit to someone else at a price within the Yellow to Blue zone; but who knows how good sales will be that day? Maybe this is his or her only chance at selling that good today, and it would be irrational to not make any profit at all. In the latter case the vendor would not only be bearing the cost without any profit, but would also have to incur whatever inventory costs are associated with not selling the item.

If all goes well, they will come after you and try to keep the negotiations going. But even though they come after you, they will typically still pull out the empathy card and try to explain to you that you’re American and have money so it’s [basically] unfair for you to even bargain with someone poorer in the first place. This is where I pull out what I call the Reverse Empathy card:

I tell them I’m a student without my parents and I have no money. I attend Fudan University, which is very expensive. I then open my wallet and show them the [previously reduced] amount of money I have, and explain that if they do the math themselves, they’ll see that I won’t be able to eat tonight if I buy the item at their demanding price. In other words, I make it obvious that it would be illogical for me to accept a higher price. Finally, they give in.

Using these tricks, I was able to:

– Lower the price of 2 gym memberships from 1800¥ to 1300¥ ($300 to $215).

– Help Shanel get 4 pairs of TOMS for 380¥ instead of 480¥ ($80 to $60).

– Help DJ get a great Burberry windbreaker for 400¥ instead of 600¥ ($100 to $66).

I doubt Shanel’s purchase will result in 4 pairs of TOMS being donated to kids in Argentina as TOMS Shoes promises (see their website). And while the provenance of the goods remains a mystery, their quality is undeniably excellent. I do realize however that the graph illustrating my bargaining theory is flawed in that we have no idea what the original cost was for the seller. I may think I made a totally good deal, when in actuality the seller was still in his or her actual Yellow or Blue zones. I’ll never know… But after doing some math, I feel like that’s irrelevant: our total savings were ¥900 ($150) that day, or 30 succulent and generously portioned meals for one person. How much is meal plan at Davidson again? Yeah I thought so…