Quality of Life

In the previous two segments we talked about the reality of discounts when pursuing a life of continual travel or expatriatism, and the basics of negotiation and being sure to educate yourself on local rates the moment you set down on the ground through some simple, baby steps. This post takes it a step further, as we delve into the actual art of negotiation.

I mentioned in the previous episode that negotiation is a skill, just like riding a bike or playing a musical instrument. It’s something that anyone can do, given the time to practice and the knowledge to utilize. It is a combination of charisma, local knowledge, people skills and the ability to manipulate words to your advantage.

Language immersion is key if you want to get the best deals, and it is just as much a part of successful negotiation as knowledge itself. If you are living or traveling in the middle of North Korea, it’s not going to do you a bit of good to try speaking English or French or German with the locals at the fish market or the produce market, or trying to buy a pair of jeans in some back-alley flea market. The local people aren’t going to understand what you are trying to say, and thus you will not be able to negotiate beyond pointing at someone and miming two for one and trying to baby-talk your way through a bartering scenario.

To put it bluntly, you’ll fail right out of the gate if you try to use your native tongue when negotiating for the best local deals. The only way to truly get the best prices is to meet the locals on their own level. Show them respect, and they will be more inclined to respect you in return.

But it goes beyond simply speaking to them in their native tongue. Bartering is, as previously mentioned, an art form. A skill. Something that takes time and practice to master. And even when you are a veteran barterer you will not win every negotiation, because there are those out there who will be better at the art than you.

In a market setting, the first thing you do is you research. Let’s say you walk into a shop that has a really cool bag that you like. You check the price, you look around, and then you leave. You never start off negotiations on your first visit into a merchant’s shop. Check things out first, then leave and go to the next merchant and check their wares and prices. You find other people in the same market selling bags and you look at the selection. You make notes, either mentally or on paper or in your cell or tablet or whatever.

Then, after you’ve spent an hour or so browsing the various wares and you have enough knowledge, you can go back to the merchant who has your favorite bag and you can start bartering. Firstly, you know the rates of the competition, so you have a ballpark figure to shoot for, and since you asked around beforehand in regards to the acceptable local rates of negotiation, you are ready to begin.

Start off with a line about how you really like the bag, and the color and the pattern, but the guy over there is willing to give it to you for X, where X is your starting bargaining point. Would this merchant be willing to match the other merchant’s price?

The merchant is either going to say yes, he’ll counter, or he’ll say no. So you have a 66% chance that the dialogue is going to be in your favor in that he’ll either say yes or he’ll be willing to negotiate on his price, which means you have nothing to lose by trying. If he says no you can either bite the bullet and pay his full price, or you go to your B list.

One of my favorites is to use the old “Brother/sister, please!” line when I’m opening a dialogue with someone. Let’s say I walk into a local shop and I want to buy an umbrella that is listed for 10 USD. I know for a fact that I can get it for around four USD if I buy from one of the street vendors just two blocks down, but they didn’t have it in the color I want, and this guy does. Plus his is slightly larger, which means I’ll probably have to pay a little more. So when I ask the price and the merchant responds with his ten dollar quote, my reply is to give the friendly, “Brother/sister, please,” with a little purse of the lips and a shake of the head, like “wow, really?”

After that, I’ll look around the shop for a bit, check out a couple of more wares, and then I’ll simply tell the merchant that I’ll give him five dollars (or the local equivalent), which is slightly more than what I would pay from the guy a couple of blocks down, but it’s also a slightly larger umbrella.

Now, the merchant has a choice at this point. He already knows what the guy outside is charging. He’ll either play ball or he won’t. If he plays ball, he’ll counter with something like seven, and then I wrinkle my forehead and give a huge sigh and tell him I really like the color black, which he has but the other guy doesn’t….pause, bite my lip, make him think that I’m thinking about it…then offer him six. He agrees and I walk away with my new umbrella. Or he says no and I head out and buy a slightly smaller umbrella from the guy down the street who I won’t bother negotiating with since I know his rates are cheapest in the whole area.

Theatrics also play a large part in negotiating. It’s part of the art. And there’s various forms of theatrics. In this case, I played the “hey, buddy, cut me a deal here” type of theatrics. But there’s also the shrewd bargainer without the jokes, such as being in an outdoor market and seeing a certain hand-crafted necklace I like, but the merchant is asking double what the other merchants are selling for after I’ve had a chance to look around a bit. But since he also has a couple of different earring sets I really like that I think my girlfriend/sister/mother/etc. would enjoy, I do some quick math in my head and just point blank ask if he’ll take X dollars/pesos/whatever for two pairs of earrings + a necklace + a ring. I offer him 30% below what he’s asking on each individual item, but since I’m buying bulk, he’s selling more. He’ll either counter and I’ll accept, or he’ll decline, and I’ll walk away.

Cash and your signature can also go a long way to affirming a better deal when it comes to accommodations. While a local person might be asking $600 a month (or the local equivalent) for their fully furnished, two-bedroom condo with all the utilities included, I always try to sweeten the deal when I’m negotiating for a place to stay. Because I always tend to rent for three to six months at a minimum, I don’t have a problem paying two or three month’s of rent up front if I like what I see and I think it’s going to be a place that I’ll enjoying staying in.

Of course I’ll have done my research by this point…looked over the property, talked with the neighbors about the landlords, asked around about previous tenants and the like (all in the local language since English would have gotten me nowhere), and when I have a meeting about the actual paperwork I’ll get down to business. Look, I really like your place, and here’s how much: I’ll give you three months of cash up-front and I’ll sign a six month lease if you’ll drop your price to $400 per month. Or $450. Whatever I think is a fare rate given what I know about the local environment from having asked around as to what is the acceptable negotiation rate.

The landlord/managers will either go for it or they won’t. Now, with me, I usually have two or three apartments lined up before I make a selection regarding a single one and go to make an offer, that way I can simply move on to the next one if I don’t get the offer that I want from the first person. The only time I ever pay face value for a property is if really, really like it and it’s in the perfect location with the perfect everything and I think it’s worth the money. But that’s pretty rare; I almost always negotiate.

These are just a handful of little things that I’ve used to my advantage over the years to get the best deals on the local level. Of course, none of these things would have been possible if I was trying to talk in English, because the local merchants at these markets don’t necessarily speak English. Plus there’s that whole respect factor. It’s buttering people up. It’s making them more amicable to negotiating in the first place. It’s just like gift-giving in Japan; you show your business partner that you respect him/her, and they are more likely to give you the same respect in return.

If you want to get the most bang for your buck while traveling the world as an expat or digital nomad / backpacker, you have to utilize negotiation to your advantage. Only then will you avoid paying the foreigner tax that is always tacked on to everything from services to goods to produce and beyond. But there is an art to negotiating with people on their home turf, a talent which requires a certain amount of finesse, charisma, language skills and knowledge of the local culture and how it operates.

Before we go any further, let me just say one thing: everything is open to negotiation. Everyone has a price. If you fail to realize this universal concept you will forever be paying double or beyond what the actual rates are for things. Everything that is sold by a merchant or a store has been marked up so that the merchant can make a profit above and beyond what they paid for the merchandise in the first place, and it’s your job as a traveler to navigate the fine line between acknowledging that the merchant does indeed need to make a profit, and keeping yourself from overpaying. There’s nothing wrong with paying a merchant for their time, but not when they are trying to rip you off.

Negotiation is an art form. It is a skill. And just like any other skill it must be practiced, honed, refined. But even the most seasoned veteran will not win every single barter exchange, especially in the early days when they are first getting started and learning the ropes, but once you have a few successful transactions under your belt you’ll have the confidence and know-how to walk into your next negotiation with the proper skills and knowledge to make your way through the transaction without losing your shorts.

Negotiation is not bulldozing someone by asking them to give you the item or service for free. I can’t tell you how many times I’ve been walking through a market around the world only to hear some clueless tourist in English telling a local merchant “I’ll give you a dollar for this” when the actual rate for that product or service was ten times that amount. Another example I heard one time here in Cancun was a taxi driver who offered to drive a family to the Hotel Zone for eight dollars (the going rate is six from Centro) and the father of the group fired back with “I’ll give you two dollars”.

It is an insult to the merchant when you try to cut their profits by 90% because you think that just because you come from a country where your currency is worth more that the natives will jump at your offering of pennies. It’s like throwing copper coins at the beggars and expecting them to hail you as the Messiah for your so-called generosity. It also shows your complete lack of respect for the local merchants and the local culture when you don’t even take the time to learn the going rates for your given city or part of the world.

Your first task, no matter what part of the world you are traveling to, is to find out what the local rates are. As a general rule, most countries hover the line between 15% and 30%. This is the acceptable standard rate you can use for negotiation. It means that most of the services or merchandise you will be purchasing will have been marked up 15 to 30 percent. It’s a simple matter of finding out and it doesn’t require any special skills. If you lack the local language and cannot ask someone on the street, just ask the hotel or hostel staff wherever you are staying when you first arrive. Locals always know the going rate for discounts in their home city, and it’s your first responsibility to find this out so you can avoid getting ripped off.

Once you know the acceptable negotiation rates for your city you can use them to your advantage for street vendors, at the local markets and beyond. For example, if you see someone selling scarves on the street and you like what you see, you’ll know from your previous conversation that the item has been marked up 15 to 30 percent or higher, based upon which country you are in. After you shop around at a few other vendors in the same area, you’ll have a better idea of who is offering the best rate, and then you can begin your negotiation armed with the knowledge you need.

Find out the local rates for transportation. Then find out what is an acceptable negotiating rate. For example, here in Cancun, Mexico the going rate for a local taxi is 20 to 25 pesos; collectivos are 6 pesos. Any taxis to the Hotel Zone will be a minimum of 60 to 80 pesos, and the buses to the Hotel Zone are 8.5 pesos. But without fail the taxi drivers will always tell people they suspect are tourists double those rates. 40-50 pesos for a taxi, the collectivos will tell you 10 to 12 pesos, and the buses to the Hotel Zone always tell the tourists “one dollar” for tickets, which is 12 to 15 pesos. Taxis to the Hotel Zone will usually ask 120+ pesos.

While you can’t negotiate for a bus, it’s important to know the rates so you don’t get scammed. You can, however, negotiate for taxi services, and knowing the rate in advance allows you to ask a driver for his fee, hear their price, and then determine if you want to counter or walk away. For example, if a driver tells you he wants 100 pesos from Centro to the Hotel Zone, you could counter with 50 pesos (knowing that the local rate is 60 to 80 pesos from your earlier conversation/fact finding mission) and see if he bats the ball back into your ballpark range. You wouldn’t, however, counter with an insulting rate such as 20 pesos, because you’ve done your research in advance and know the acceptable negotiation range.

Unless you know the current rates and have a frame of reference to know where to negotiate from, you will find yourself in the position of the aforementioned tourist who offered his taxi driver an insulting counter-offer when the guy was actually giving him a fair, reasonable rate on a ride from Centro to the Hotel Zone. Do your due diligence when it comes to the lay of the land. The Internet allows you to be more than just another ignorant tourist, as does a little good old fashioned asking your fellow man/woman who actually live in your host country.

Next, find out what is the going rates for accommodations are. This applies to expats more than backpackers, because those of you who follow the immersion travel route like myself are always looking for local digs to use as a base of operations for the next 3 or 6 months or beyond. I find the best source of information on this is taxi drivers, maids, serving staff and people working the low end of the totem pole in any given city. They are usually making around the minimum wage for the city and will thus know the cheapest prices for accommodations. You can use this knowledge to your advantage when you find an apartment that you actually like, because you’ll know what the going rates for basic standards are and from there you can negotiate up accordingly.

You can also use the local classifieds if you speak the local language. Never, in any circumstances, rely on Craigslist, Google or any publication or service which is offering you rates and descriptions in the English language, because anything written in English when the local language is something else is a targeted ad specifically designed to market to the tourist crowds, and thus the rates will be jacked up beyond what the local prices actually cost. Be especially wary of places who want their money in dollars or euros or pounds when the local currency is something else; you can pretty much be guaranteed that they are scamming you with prices that are double or triple or beyond the actual, going rates.

For example, in Sofia, Bulgaria the going rate for a fully furnished, fully equipped and kitted out two-bedroom apartment should never cost you more than €400 to €500 per month on the high end. A fully furnished and all-utilities included single bedroom apartment or a studio should be around €250 to €300 per month high end. But as a foreigner you will always be quoted nearly double that rate, especially if you are from the United States or the United Kingdom, where they automatically assume you are loaded with cash. The same thing applies here in Cancun; local rates range from 4,000 to 6,000 pesos for a decent two-bedroom place, but if you look to any English-speaking advertisement they will have their rates in English and they will always be double the actual, local rates for accommodations, and they will usually be asking for the rent in dollars.

These are just a few of the tips you can utilize to ensure you get the best prices when you are visiting another country as a digital nomad or planning to live there as an expat. Stay tuned to the next installment, when we’ll be talking about the actual art of negotiation and how to combine charisma with conversational skills and your newfound local knowledge to get the best rates on everything you need to settle in as an expat living like a local. You can also read the first installment here.

The number one rule rule of thumb when you leave your home country behind to pursue a life of location independence as an expat is this: if you don’t ask, they won’t tell. And I’m not talking about sexual preferences here. I’m talking about discounts.

Once you leave the Western world behind you will quickly find that anything which doesn’t have a barcode attached is entirely negotiable, and everything from local accommodations to produce at the local market to shoes and clothing to transportation and beyond is open for negotiation.

This is where language immersion comes into play more than anywhere else in the expat lifestyle. While local merchants may be willing to negotiate with you if you are trying to do so in English or your native tongue, there is an inherent level of respect that is automatically given when you make the effort to approach a local person on their own turf. It’s like a new dog who comes into a house where he knows another dog is king; he bows his head in respect and tucks his tail a bit to let the senior know that the other is still head of the pack.

Those of you who have been on the road for awhile know that the moment someone sees you with a backpack on, or that your skin is a different color from the natives, they automatically assume you are a foreigner and that you are must inherently be loaded with cash. After all, you can afford to travel, and that smartphone/tablet/backpack/pair of North Face hiking boots cost more than many locals in developing countries make in a year.

As a result, unless you specifically ask you will never receive the local rates on anything. There will always be a foreigner tax applied. In Latin America it’s known as the gringo tax, but it exists in just about every country in the world. In some countries, it can actually also be an official federal tax above and beyond the market setting, such as in Mexico or Bulgaria, where entry into local museums, national parks and other areas is free for locals, but costs foreigners extra.

For example, when I lived in Bulgaria I would always have to pay 20% more (minimum) than my friends for ski lift tickets, museum entry and the like, and before they joined the European Union there used to be a foreigner surcharge on all hotels, which means I always paid 20% to 40% extra than Bulgarians would on excursions to the Black Sea. It’s the same thing here in Mexico; for example, the national parks and ruins like Tulum or Chichen Itza have free entry on Sundays for Mexicans, but not for foreigners.

In market scenarios it’s not so much official as just a given; anything you see will generally be offered to you at anywhere from 30% to 100% above and beyond the actual, local rate. And unless you ask or attempt to negotiate the price down you’ll be paying the extra fee without even knowing it. It can also sometimes it applies to official stores in the plazas and shopping malls, such as when I was with a friend in a mall in Bogota, and he was buying some jewelry for his girlfriend back in the States. He merely asked the girl if there was a discount on the item he was interested in and she said yes, there is….but if he hadn’t asked, she never would have said anything.

I get the most benefit out of negotiation when it comes to my long-term accommodations. Often times if you are willing to pay a few month’s in advance, or you are willing to sign a lease term for longer than six months, you can get a significant discount off the asking price on your apartment/condo/house. It might be listed for $600 per month but if you are willing to throw the owners three month’s up front and sign a six month lease you can usually get them down to $400 a month or even less unless they are absolute sticklers.

There’s a certain art form to negotiating with people, but we’ll be saving that for the next episode in this series, when I talk about negotiation protocol and the right way/wrong way of handling a negotiation with someone, regardless if you speak the local language or not. Contrary to popular belief, you can’t just walk up and demand someone cut their prices in half or give you a 75% discount. That’s not negotiating. Stay tuned for next week’s episode as I explore the art of getting more bang for your buck around the world.