How to negotiate like an Indian.

Bismillah, How amazing is this- Indians have founded more engineering and technology companies in the U.S. during the past decade than immigrants from Britain, China, Taiwan and Japan combined (Source: Where The Engineers Are, Vivek Wadhwa, 2007). The entrepreneurial abilities of Indians in general has amazed people for years. Indians and Pakistanis know that their culture produces an uncommon blend of innovative thinking, business-minded aggression, and comfort with numbers. Acording to Bob Compton who wrote the book 'Blogging through India' Indians have one other key skill that is needed for success- NEGOTIATION!

In India, every transaction — EVERY transaction — is negotiated. From tomatoes and onions, to taxi fares, to chess sets to the wedding doweries — the list is endless. I remember going to India in 1996 and it took over 20 minutes to buy 1 kilo of tomatoes- that negotiation will stay with me for life!

Hotmail founder Sabeer Bhatia, a Californian origionally from Bangalore, credited the bargaining skills he learned in vegetable markets in India for getting Microsoft to push its acquisition price for his company from $160 million to $400 million. Bill Gates’ eye teeth were floating in tea with that deal.

Here are a few rules for negotiating like an Indian, and getting the best deal:
  1. The true price of any item is what you pay — There are no suggested retail prices in India or Pakistan. Nothing is labeled, so it pays to talk with several suppliers before making a significant purchase.
  2. Try for 70% off — Don’t accept less than 30%  
  3. Make them show lots of merchandise — If you are buying a washing machine, you want the guys in the showroom to  sweat profusely before you make your first offer. Get the vendor to “invest” in the transaction — emotion, time and energy.  
  4. Make an offer on one item at a time – If you plan to buy a few things DON’T let on at the beginning. Act like you only want to buy one item. Get the seller to give you prices on each item; play one item off another to show you are looking for the lower price point. 
  5. Wait for the pad of paper — Every Indian sales person has a pad of paper and a pencil that they pull out when the bargaining gets a bit more serious. Though they write down the price for an item, this is only the starting point – remember rule #2.
  6. Say “TOO HIGH”, a lot – Don’t even start negotiating until the salesman has scratched through the initial price and lowered it at least twice. By staring in silence at the pad of paper for a long time the price gets cut.
  7. Imply a bundled purchase — OK, now that the price has been cut 25-30%, ask the salesman what deal he would give you if you buy two items. Expect 5% off. Ask for three items; get another 5%. Then add a very expensive 4th item — one which you do not intend to buy. This will excite the vendor and he will do a bunch of calculations which you will be unable to follow. The price will come down for the expensive item as well as for the other items you intend to buy. Lock those prices and drop the expensive item. At this point, you be able to shave close to 50% off the initial price. Most people in the West are generally are satisfied at this point and close the deal.    
One final point – no matter what price you pay — if the salesperson is smiling when you leave — guess who won. . . Is it a stereotype that Indians are good at negotiating? Sure. Is it accurate? Just neglect to prepare next time you match wits against an Indian entrepreneur and you tell me. 

Do you have your own negotiating strategies, tips, or stories? If so, please share in the comments, and feel free to build on or borrow from the recommendations. 
(adapted from the 4 hour working week and personalised)

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