Essential Skills for Expats 3: Negotiation & Barter

July 27, 2010 by
Categories: Expats

Mexican TradersBy Mexico Insight

Negotiation and barter are woven into the fabric of Mexican culture. In 1520, Hernan Cortes wrote to Emperor Carlos V of Spain describing a city with “many plazas, where there are continuous markets and dealings in buying and selling”. Since at least Aztec times, Mexicans have been devout traders.

Five hundred years later, whether you’re buying a piece of land, a home, a car, or a kilo of limes at the local market, you will need to exercise some negotiation skills, lest you may pay more, and possibly a lot more, than you need have.

How you negotiate (or barter) will depend upon the precise situation you find yourself in. In most cases—the notable exception being real estate purchases in popular towns and cities—effective negotiation will require the use of Spanish, so a basic conversational level of the language, as described in the first article of this series, is a prerequisite. Most Spanish language schools in Mexico include market trading as part of their course material.

There are some places and situations where barter is not practiced in Mexico. These include the local Wal-Mart (and similar establishments), department stores and gasoline stations. Barter is not practiced at tienditas (family-run corner stores) and it’s not practiced at pharmacies. Restaurants and comedores don’t usually barter, either; although they might agree to a group discount if you have a quiet word with the manager or owner before or upon your arrival.

Situations where barter is practiced (and sometimes expected) include shopping in open-air food markets, flea markets, art and craft markets and fairs; and buying from ambulant vendors on the street and on public transport. If you board a taxi cab that isn’t metered or doesn’t charge a zonal fee, you should always negotiate your price beforehand.

More formal situations where price negotiations are often entered into include the purchase of a vehicle (new or used), the purchase of jewelry or fine clothing from a specialist supplier of these products, the bulk purchase of almost anything from a trade supplier, hand-made furniture bought in volume from local manufacturers, as well as land and property—whether for purchase or to rent.

When you have lived in Mexico for a while—and especially when you have lived in one place in Mexico for a while—you’ll notice that the prices asked for many local things you buy every day can be very elastic indeed. There are prices for ‘locals’ and prices for ‘tourists’, and whether the tourists are foreign or Mexican might also create a further variation in price. Unmetered taxi cabs which are few in supply may quote you a higher rate when it’s pouring with rain, than they would do on a sunny day with two other cabs parked in the rank, waiting for custom.

Mexican traders, like traders everywhere, are opportunists. They will always try to make hay while the sun shines, and unwary foreigners (whether resident or just passing-by) are fair game. With some experience of living in a place, you’ll learn what prices should be for things like a taxi cab ride, a kilo of meat or fish, a bagful of oranges, a hat or walking stick, a stack of fresh corn tortillas, and so on. How? You start talking with people locally, you hear and see what others are being offered and gradually you get to know. Eventually, you don’t even ask the price for many things—you know what it should be and hand over that amount of money. The acid test is to hand over a coin or bank note that requires some change in return and see how much comes back. In fact, this level of local economic intimacy is a gauge for you—the more you buy without the need to ‘negotiate’ the price, the deeper you have become involved in—and part of—the local community.