Several years ago, I found myself at a global entrepreneur conference held in Hong Kong. There were nearly a 1,000 people from all over the globe at this week-long event.
Our Chinese hosts were incredibly gracious and did all they could to make the foreign guests feel welcome.
While the overall purpose of the conference was expansion of global business, many of the attendees were introduced for the first time to the diverse culture and rich history of Hong Kong through excursions and learning events outside of the conference center.
The week-long conference culminated Saturday night at a festive traditional Chinese banquet. At each table, there was a mix of local Chinese business people, local ex-pats, young students, and foreign visitors.
At my own table, there sat a total of 12 people; including two Hong Kong businessmen, three Chinese business students; two businessmen each from India and Germany and three business people from the U.S. (including myself).
While trying to make some polite conversation, one of the businessmen from the United States announced to the others at the table that he had gone to the local open-air market that morning.
He proudly told us that he found some great bargains there including this... (he stretched his hand in the air as the sleeve of his suit jacket recoiled back... revealing a shiny new watch).
"It’s a Rolex... and I only paid 18 dollars for it!!", he said boasting.
The Asian members of our table began to snicker... softly at first... and then a little louder. They began speaking in Cantonese among themselves... in between giggles.
After a moment, one of the students (who seemed to have been elected by the other four) spoke up.
"Dear sir, I believe that you might have been taken advantage of by the merchant at the local market."
To which the man defended his intelligence.
"I wasn’t born yesterday", he exclaimed, "I know that the watch isn’t a real Rolex watch... "
The young lady then countered, "yes... we understand... we are only laughing because this copy watch typically sells in the local market for only $2 NOT $18!!"
The apparent great deal turned out to be not so great (well, I suppose it was great for the merchant who sold the watch).
There are several valuable lessons I took away from dinner that evening.
Lesson #1 - Information is power
The first rule of successful negotiating is doing your homework first. Information is the key to getting the better part of any deal. The party with the better information is more likely to understand the true value of the product and/or service and therefore can negotiate the pricing to meet (or exceed) that true value.
The Internet has given us a great tool to quickly research markets and pricing (unfortunately for my friend... smart phones were not yet available when he made his purchase). Still... there are various methods that he could have employed to determine the true value of the watch.
Had my fellow countryman done a little research before venturing out into the marketplace, he could have saved himself some cash and more importantly some embarrassment.
Lesson #2 - Get an expert to show you the "lay of the land".
It was plainly obvious to me that our hosts had local knowledge that could have helped my friend navigate through the rocky shores of the "open air market". Had he been accompanied by one of our hosts, he would have most-likely found the best possible deal (or close to it).
The guy didn’t ask for help... he wanted to go at it alone...
This phenomenon happens every day, both professionally and personally (especially with us alpha males types). We think that we’re experts in everything this world throws our way (perhaps this explains why we never stop to ask for directions).
We somehow believe that we are actually saving money by doing it on our own... be it plumbing, electrical work, auto repairs, computer upgrades, room remodeling, and/or carpet cleaning.
Even after we go out and purchase all the necessary equipment and tools, the books and manuals, and the raw materials, we typically end up with a job that is at best described as "amateurish".
And even if we happen to do a good looking professional job, the project has cost us several times more due to our financial investment in tools and equipment as well as the time invested in learning how to do the job that most likely we will only do a few times in our lifetime.
Be it at the office or at home, becoming an expert will most likely cost several times more than just hiring a proven professional to do the job in the first place.
The experts already have the experience it takes to do the job correctly... the first time... saving us both time and money in the end.
Lesson #3 - In the eye of the beholder
The watch buyer was perfectly happy with his purchase. The timepiece looked good and he was proud to show it off.
To this guy, $18 was a fair price to pay for a replica Rolex watch and for the story he now gets to tell about buying it in an open-air market in Hong Kong. It was a fair exchange...
It wasn’t until the others at the table told him that he overpaid that he became unhappy. He let the opinion of the others effect his own happiness.
In the end, he wasn’t merely buying a cheap timepiece... he was buying an experience...
This is the true ideal of traveling to different places, making new friends, and/or trying something that you’ve never done before.
Ultimately you end up with a new experience, a story to tell, or a great insight into the nature of people...
The true value lies not in what you pay for something... but rather in the value that you receive...
Travel expenses to Hong Kong: $3,000
Experiences to last a lifetime: Priceless
Conference cost: $1,000
Price of Rolex knock-off: $18
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