Your first year living in China will be seeking out those markets you've seen in travel photos, and you'll be wanting to get souvenirs to bring home. From traditional Chinese paintings to Chairman Mao watches, if haggling over prices seem too stringent, arguing over a few dollars like an old lady at a checkout counter, but with some basics you'll find it to be a fun game.
Know where to haggle
Before you go off to the supermarket thinking you can haggle for toilet paper and tooth brushes, bargaining is done in street markets and independent shop owners. A worker in Wal-Mart is not going to have the authority nor the care factor to haggle. When shopping at a market stall you're bargaining directly with the owner, and you're just negotiating the retail price.
Souvenir markets
You may be a backpacker traveling on a budget, but there's a stereotype working against you caused by tourists with deep pockets. Years ago the exchange rate was really strong for the US dollar and tourists found souvenirs pretty cheap when they were considering how much it cost in dollars. Not now, the dollar is weaker and if you're working and getting paid in RMB, then you need to consider everything in RMB.
Tourist traps
So you're off to see the Great Wall of China, and you want to buy a memento of your visit, the price is going to start extremely high to begin with. You're mostly likely going to haggle down to the price that is still a high margin of profit for the owner.
Stalls sell exactly the same thing
There will be a whole street full of stalls, and you'd think they'll be competing with each other, but most likely they're working together and helping each other out. Their usual response to why buying from them and not their neighbour is "my stuff is better." This is why you shouldn't get to excited in seeing Chairman Mao's Little Red Book in English, they're all going to sell it.
Fake goods markets
There's one thing I just don't understand about other buyers; why do they think getting cheap fake stuff is a good deal? Years ago I had a colleague who bought a fake North Face jacket from a market, he knew it was fake but thought it was a bargain. The North Face is synonymous with quality, such as keeping you warm in the snow, yet he must have thought the knock-off would do just the same. He wore it in pouring rain and was soaked underneath the jacket as it failed to do the one simple function of keeping him dry. My advice is don't even bother wasting your money and if quality is important then just buy the original.
Confronted by hawkers on the street
You'll be approached by these people in a shopping pedestrian street, they'll come up to you and show a catalog of fake watches or designer handbags. They want you to go back to a shop, but I've never had an interest in a fake Rolex so I actually don't know what happens next.
Paintings, calligraphy and crafts
Stores selling water colour paintings will hire students to find tourists off the street, I bought some a long time ago and I wasn't scammed. I told them I am only interested in buying a small painting and at an affordable price before I went back to the store with them. Only agree to go with them if you're genuinely interested, you'll be wasting the student's time otherwise.
Useful tips
The walk off
This is everyone's' favourite technique because of its simple effectiveness by just leaving the store. You don't do it straight away, but when the owner just won't budge any lower, then you walk off, and they'll chase you to come back and might give in with a lowered price close to your offer..
You can use simple English
In a tourist area they'll know very simple but broken English such as "looky, looky," numbers, "ok" and "too much" are understood by them.
Ask then scoff at their starting price
This is another simple technique, but not angrily and jokingly, and remember it's a fun game. I'm a bit playful when I negotiate, so I'm laughing and smiling, and I show that I know I've been overcharged. They'll then lower their asking price without me having to offer my counter price. After a few price drops I then state my offer, if I am too low, then they laugh until we'd agree on a final price.
Body language
Despite the language barrier they can read your body language and will know if you are too keen or not that worried if you don't end up buying. They deal with customers everyday and negotiating is second nature, you're dealing with professionals. Always act as if you don't end up buying it, it is no big deal.
Separate your loose change from your large notes.
You're trying to convey yourself as the backpacker on a tight budget, yet you pull out a wad of 100 kuai bills. Other vendors are watching, so when you try to buy something from them, they know you've got plenty of cash to buy. If you're not familiar with the currency - click here.
When buying from a market with fixed prices
They may list a fixed price with a little sign with the amount, yet in some places you can get a discount. It is sometimes good to buy more than one item to get a discount.
Don't show off with wealth an expensive phone
You can't say the price in Chinese so you use your latest Iphone to show the number, and now you just told them you're a billionaire. A common tip is to carry a pen and notebook instead, so they still think you're a cheapskate. They'll use a calculator anyway, and you can just enter your counter offer on their calculator. Learn how to say numbers in Chinese - click here.
Don't feel guilty
If you don't want to haggle because you think the vendor is poor and needs the money desperately, if they think your price is not going to be any profit for them, they will refuse to sell. Your eventual offer is still a good deal for them, they make an initial offer very high as they are pushing their luck to see how gullible and naive you might be. If you're buying things, you are putting money into the local economy, and that is a good thing.
Check the item before buying
Look for scratches and blemishes, make out that you're picky but also get them to take the item out of the box. If you do notice any defects, than you might want to use it as means to really lower the price.
Keep to your budget
My first year in China I bought a lot souvenirs, but I did so to a budget by allowing a limit to what I was going to spend at a market. It actually helps with the body language, they can see you mulling it over if it's really worth it.
Remember it is part of the experience and can be a lot of fun, you'll find they will enjoy you negotiating and you'll save a bit of cash as well.
Useful phrases
How much does it cost?
Duo Shao Qian          
Too expensive!
Tai Gui Le          
Make it Cheaper
Pian Yi Dian          
Give me a discount
Gei Wo Da Zhe        
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