I took a negotiation class this past semester at Vanderbilt and came into the class confident that I could bargain and negotiate for myself. I thought that I knew how to be firm in keeping my foot down and probing for the counterparty’s interests. I quickly realized how wrong I was after the first negotiation. Nevertheless, after finishing the class this semester, I felt like I gained practical knowledge that I could apply to future negotiations.
As I thought about the Maymester, I realized that in markets we would be negotiating a lot, especially in Cusco, where the economy revolves around tourism. Of course, during our time in Cusco so far, you couldn’t negotiate the price of food at a sit-down restaurant, but you could leverage the fact that with a big group, you should get free drinks for the table or an appetizer. For instance, the second day after class in Cusco, our group ventured to a restaurant down the street, and one of our classmates convinced the host to give us free maracuya since we were a big group that the restaurant would benefit from.
After water rafting during one of our excursions around Ica, we stopped at a place for lunch where Prof. Falconi negotiated for us to have lemonade for free with our meal. There were multiple markets and jewelry stores where Prof. Falconi successfully brought the price down significantly, refusing to buy something unless the price was lowered. In most cases, it was successful. This observation reinforced that most of the time, the price could be driven down, and as a foreigner, you would have to take twice the time to ensure that you weren’t being bamboozled and that you could get a decent deal.
As a foreigner, oftentimes, I heard my classmates say that they were not tricked in terms of US dollars, but in terms of soles, they certainly paid more than what was necessary.
In Lima, I mostly did my shopping at Larcomar at chain stores where I found good deals, but I could not bring the price down simply by being a customer. My first experience negotiating for myself was at a store in the Plaza Mayor de Cusco, where I liked a pair of sunglasses but was not willing to pay 40 soles for them. Certainly, in US dollars ($11), it was a very fair price for these sunglasses. However, I knew that for a small shop that we walked into and considering the low cost of production here, the sales associate was trying to get me to pay more than what those glasses were worth.
I didn’t have to do a ton of bargaining. Rather, I set the glasses down and told her that I was sorry, but I would not be purchasing those glasses. Our group remained in the shop for another 15 minutes while I kept trying on different sunglasses. The sales associate realized that it would be a missed opportunity not to sell them to me for a lower price. I ended up paying 30 soles.
In Pisac, I had my first real negotiation where I had to really put my foot down so that I would not get tricked. We walked into the market with multiple vendors (just me and two of my classmates), looking to buy an accessory as a souvenir. Quickly, we noticed that there were a lot of rings, which would be a nice souvenir to bring back for family members or friends. We walked a bit further into the market to stop by a salesman with a nice variety of rings. He tried to sell us a sterling silver ring for 60 soles and up. From our experience and going to other markets, we knew this was overpriced.
We anchored really low, offering 15 soles. He was very firm, saying that because this was silver and it would not tarnish and he would be giving us a guarantee, the rings were more expensive. I was not willing to pay more than 20 soles, and he failed to recognize that we did not care for the guarantee as we would be leaving the same day. No matter how much he tried to justify the price, we made up our minds that we could find a better deal with very similar products.
Sure enough, we found another vendor that sold the same kind of rings that were also sterling silver for 35 soles. She looked more willing to negotiate, and that made me feel hopeful. I walked out with the ring for 20 soles after some bargaining.
Looking back, we made one principal mistake in our negotiation that would have allowed us to drive the price down even more. We negotiated the ring with the smaller stones first and then the ring with the bigger stones. The owner then justified the price of the ring with the bigger stone to be higher because of the size. In reality, non-precious stones don’t add all that much value to a piece of jewelry. It is the type of sterling silver and the size that matters. Nevertheless, I liked the ring, and sterling silver for $5 sounded like a pretty good deal to me.
Comments