Black Market Negotiation Lessons

It was really hot, like 42 degrees (107 fahrenheit) with 100% humidity. I have to carry a tea towel bought for .75 cents to wipe the sweat pouring off my brow. I’m in Shanghai for the week while backpacking around SE Asia for a year after quitting my corporate job.

Buying a gift in that heat at an Antiques Market reminded me of three lessons when negotiating for anything.

I wanted to get my Dad something for his office. I walked into small, dim store piled high with old dressers, privacy screens and knick-knacks. I picked up a beautifully embossed wood box.

The storekeeper ambled up. I wish I was making this up, but he had a long, wispy beard and was smoking from one of those cigarette holders a 30’s movie star would have. He spoke no English.

A lot of hand waving and mutual admiration for the box ensued. Then a younger woman appeared who was clearly a relative. Her English was broken, but she said the box was 100 years old and from a Hutong in Beijing. I dubious about the provenance, but I loved it and had to have it. The relative vanished behind a huge urn (seriously).

Suddenly a voice sounded in my head, “Aaron! What’s your BATNA?”

I hadn’t had heard that phrase since college after reading Getting To Yes for a class. It stands for “Best Alternative to a Negotiated Agreement.” Simply put, before you start a negotiation you ask yourself, “What would I be satisfied with if I don’t get exactly what I want at first? What’s my ‘walk away’ point?”

It might be a price range, a time something needs to be done or a result. You want to buy a car for $28–29k. You’re at a dealer and they have one for $30k and you’ve made an offer for $28k. They’ve come back with $29k. You know there’s a comparable car at another dealer for $28k. But you’ll settle for $28.5k at the current dealer because it means you don’t have to restart the negotiation at the second dealer.

My BATNA was $30–40 for the box. And that was Lesson #1, know what you really want and when to walk away.

The shopkeeper pulled a calculator and typed in “900.” That’s 900 Chinese Yuan, or $137 USD. I took the calculator and typed in “50” or about 7 dollars.

He looked at the calculator and we both started to laugh. Lesson #2 from my Dad, never accept the first offer.

We went back and forth for awhile, typing numbers into the calculator. Lot’s of hand waving, I think at one point I walked out the store.

Then we arrived at 243 Yuan, or $37 USD. We shook hands and he wrapped the box up in old newspapers. We both felt like we got a deal. And that’s Lesson #3, make sure everyone wins.

Too often advice on negotiating says “screw the other guy!” and “get the best deal for you!” The problem with that is when things get too adversarial people walk away. They’d rather not do the deal, even if it’s good for them in the long run, because they don’t feel acknowledged or valued. Having someone feel they “won” might just be they get to tell their boss “we closed the deal,” no matter the price. It’s your job to figure out what will make the other side happy and give them that, while still getting your BATNA.

What’s your biggest lesson learned negotiating?