I have learnt that tourism business is mostly about information asymmetry. Travel agents can charge you more since you don't have enough information on the actual costs. Sellers are no less different. Had you have similar information base, your losses can be mitigated. In Europe, they sell everything with a fix price. But not in many other countried. So, here is some tips:
1. Buying souvenirs when travelling are most likely to be a one-time game. That is to say, the relationship between the sellers and the buyers is not a repetitive one. Once you buy the souvenir, there is a minimal probability for you to return to the seller and complain for product defects or that he charge you too much. The itinerary is just too tight. Especially if you are travelling with a tour, the seller knows that within minutes, the tour leader will drag you back to the bus. Hence, you are a perfect target.
2. Never show that you are eager to purchase the goods. For you, its about the goods and your loved one. For the seller, its about the money. Different values are at stake. To get it on par, play with the game. Care not the stuff that you are buying, but about winning the negotiation. If you look too eager, you are on the hook.
3. If you look confuse, they will ask, "how much do you want to pay"? This means that their initial offer is absolutely still a high price. Don't immediately answer this question. See the next tip.
4. Always bargain at least half price or less. They will frown at you, but it is price discovery that you are doing. If they frown, its a good sign. It means you are getting closer to the actual production cost and the reasonable profit margin. If they still talk much, praising you, trying to speak using your language, saying you look fancy and handsome when wearing the stuff, that's a bad sign. The price is still too high. If they look a bit upset that is a good sign.
5. Pretending too leave is a good tactic. But always leave the impression that you are serious of buying and willing to negotiate.
6. When you are absolutely sure you are near the reasonable price, "show him the money". Say that if you sell Y for X, you will pay now. But if not, you will browse around, think a bit more and return. A good seller knows that once you leave their stall, you are off the hook. Thus, when you are that serious (already showing the money looking ready to pay) you are giving them a good blow. However, do this only when you are certain, preferably after making some comparison with other stall.
7. Sellers which sell similar types of items (same type of bags, different colors, likely originated from the same producer) with large quantity will likely to sell cheaper with those selling similar type of goods with lower quantity. This is because there are economies of scales in their purchasings and that they can cross subsidize the goods they are selling (sell 1 bag cheap to me, sell 1 similar bag to you with higher price).
8. The best times for buying: first thing in the morning when the shop has just opened, in the afternoon or night near the end of the business hour and when the rain will come. Study the market behavior. In some traditional market, when the rain pours, lesser people will come to the market because the street will get muddy, or simply because people won't have the mood to shop. The seller tactics sometimes is no longer in making profit but in mitigating losses.
9. If you are travelling with style: wearing gucci, LV bags, posh T shirt, sellers might have higher expectations. If you have a backpacker style, they might lowe their expectations.
Sent from my BlackBerry® smartphone
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