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An American in China

Archive for December 20th, 2009

How Much Does That Cost?- Pricing in China

Posted by w_thames_the_d on December 20, 2009


Many developing countries do not post prices on goods, there are historical and practical reasons for this. In a country like Brazil, who battled with hyper inflation in the past, it just made no sense. The prices changed so often that it was impractical to do so. During the hyperinflation of the 80’s, prices had to updated every hour, so the consumer constantly had to ask about the price.
China is like that, no real hyperinflation, but no prices posted either. In a country like China, or Mexico, they dont price goods. The reason is to analyze you before you make a purchase- good Chinese, you probably know the score, they elevate the price maybe 50%. Shoddy Chinese- raise it 100%, no Chinese 1000%. What they do here, is ingenious, instead of calling out a quote, they merely tap it on a calculator and show you. The result is although you are surrounded by customers, they don’t know just how much you are paying.
It goes like this, foreigner comes in, charge him 20x the amount and in dollars. Lets take a ‘repilica Rolex’. The item probably cost the store 25 RMB, and sell to locals for 60 RMB. They will quote you around 450US, but they just say 450, you act surprised and say dollars, then they shoot you a distance, but have anchored the price at this elevated level ( oh yeah, most of the shops, especially in the silk market are owned by the same people so the lowest prices are relatively fixed (upper prices have no limits). You then dicker and they will stick around 400-600 RMB. The result is that although we expect this, it further instills in us, the notion that equity and justice are non existent in this country. Your best bet, tell them you live here, talk to almost all of them, in a loud voice tell them that you have a limit, and then eventually the most desperate will accept you offer (they all basically have the same goods.)

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