I’ve been shopping today. It’s my final day in Ethiopia and I’ve been buying everything from refrigerator magnets to an Amharic Bible that looks like a prop from an Indiana Jones film. As I have been popping in and out of various shops, I’ve seen a handful of inexperienced tourists attempting to buy souvenirs. It’s sometimes painful to see fellow countrymen failing to understand how to shop in a country that has a different set of rules. Often tourists will pay too much, get angry or treat the shop owners condescendingly if they don’t get what they want.
But shopping can be a fun experience if you remember that price = cost + profit. In other words, no one sells stuff to lose money and it’s reasonable to expect the seller to make a profit. However, don’t be stupid and pay the first price given, which I see people do all the time. It might seem like a pittance to you, but bargaining is the norm and a part of the culture. Almost every time I buy a conspicuous item, locals ask me what I paid. If I tell them a high price, they know that I’m an easy target to take to their “cousin’s shop” or that I’m a dumb tourist. Here are a few tips to help you get the best prices and be a responsible traveler:
Scan the market and ask for the price in several shops
Before you pull your wallet out, walk through the market and find the items you’re interested in buying. Resist the urge to negotiate. Just ask the price and tell them you might be back. If the price is too high, it might get lowered as you walk out the door. Remember the location of the vendor with the lowest price after you inquire at several shops. If the prices are uniform, there may not be a significant amount of tourist gouging. Maybe they’re in cahoots with each other, but usually it’s every man for himself.
Know the formula
This percentage is not true everywhere, but a good rule of thumb is to cut the price in half and add 10–20 percent. That’s been the markup in most countries I’ve visited. In my experience, the more aggressive the vendor, the higher the markup. I have seen prices inflated 4 or 5 times what the price should be. Asking another tourist what they paid for an item might help if they’re an experienced shopper.
Make sure you want the item
It's bad form to begin a negotiation when you’re not serious about buying, so make certain the item is what you want, the quality is acceptable, and you’re specific about the piece being discussed. There might be different sizes of the item, different levels of workmanship or other factors to consider. Once the bargaining has begun and the dealer has agreed on a price you suggested, the deal is done.
Ask for their "best price"
The seller has no idea if you know what something is supposed to cost and that's where the game begins. If you ask them for the “discount price” or the “best price” after they’ve quoted you, you’ll see immediately how flexible they are. If they try to group several items together, you’ll know that they’re more concerned about gross sales than profit percentage. Often this simple question can knock off 10–20 percent from the price before haggling.
Get the seller to invest in you
If you just walk in a shop, ask for a price and then leave, the store owner has no time invested in you. If you’ve been asking questions and spent some time in the shop, the owner will usually work on trying to find something you like. Even if you’ve left and come back three times, they’ll know that you mean business and a sale is probable. Once they’ve spent some time with you, they’ll be more likely to work a deal just to make it worth their time.
Let’s say the seller asks for 100. You’re guessing they might settle for 60 using the handy formula provided. So you start with half of the price you think you’re going to get, which would be 30. That may seem ridiculous, but it gives them a chance to counter with 80, you say 40, they say 75… finally you agree on 60. They might even say yes to 30. You never know. If they laugh, you’re usually on the right track. If it’s completely unacceptable they’ll just say no. Laughing means you’re getting close.
Don’t act superior and never get angry
Being condescending will seldom get you anywhere and will certainly not help negotiations. Treating everyone nice and keeping a smile on your face is not a sign of weakness, but puts you in a position of power. Never get angry. It’s just a game after all. You probably don’t really need what you’re shopping for. Don’t take that refrigerator magnet too seriously.
Act slightly interested
The less committed you are about an item, the less value it has on the bargaining table. Supply and demand are in full play, and if the demand is low, the price goes down. If you don’t need it, maybe the owner can persuade you with a cheaper price.
Use their cheesy lines to your advantage
I can’t tell you how many shops I’ve visited where I’ve been told I’m "like a brother" or "I give a good friend discount." Those lines work great when you reverse them. Looking sad and forlorn because your “brother” is unwilling to help you with a good price usually amuses the more clever ones. This is particularly effective with Turkish carpet and Moroccan leather salespeople.
Beware of perks
Did someone just bring you a Coke, offer you a free foot massage, give you a product sample or share tea with you? Did you get a free taxi ride? Remember TINSTAFL: There is no such thing as a free lunch. The bigger the perk, the higher the profit margin. Free factory tours are always designed to sell you a product and no one is going to spend time teaching you something if there’s nothing in it for them. If you know that going in, you’ll be in a better position to bargain or say no.
Spread the word
If there’s a chance you’ll buy more items from the seller later, recommend them on TripAdvisor or blog about the experience. Some forward-thinking vendors find value in that and you might find yourself as the recipient of a gift. Don’t be dishonest, but let them know that you appreciate them and want to spread the word.
Beware the middleman
The men who approach you and want to show you their shop or their family’s shop are often hustlers whose only job is to get you to a store where you’ll have to pay a higher price in order for them to get their commission. If you suspect this to be the case, politely thank them for showing you the store and tell them goodbye. Chances are they’ll want to stay until you pay (to get their commission) or until you leave. Another obvious clue is that their conversation with the vendor will no longer be in English so you can’t understand. If you do leave, they’ll probably want to show you the shop of another “relative." It’s best to ditch these “helpers” because you’ll almost certainly pay more. Even hired tour guides often engage in these practices. You might think they’re helping you when they stop at a factory or “help” negotiate a price or translate, but they’re more than likely getting a kickback.
Keep a separate shopping wallet
Nothing says “take my money” like a big wallet bursting with cash. I keep a small amount of local money in a separate wallet. Everyone knows I probably have more money stashed somewhere, but sometimes having just $20 in your wallet when the price is $25 can clinch the sale.
Group items together
Get the lowest price on each item, add the proposed total and then start haggling as if it were one item. It’s technically a new negotiation with the added value that you’ve already gotten the lowest price for the single item, but buying more things reopens the bartering. If there’s a language barrier, open the calculator app on your phone and start the bidding. There’s usually less of a markup if there’s just one price for everything. The vendor might just be looking at the bottom line and a combined sale will be less trouble for them and an easier way to make a few bucks and clear out some inventory. At any rate, you won’t have to repeat the process a dozen times and that’s a good thing.
If you’re in a stalemate, grab some little item like a refrigerator magnet or little wood carving and agree to their price if they throw that in. It’s not going to affect their profit much and you’ll feel like you won the game, even if you didn’t.