I’m sure you’ve all heard about markets, whether from people (like me) who have shown you the DVDs, or 1st-hand on the streets of New York Chinatown. Lemme break it down for you:
Homogeneous products: everyone is selling the same thing. The branding isn’t distinguished between the sellers. Somehow, someone has a massive factory churning out folexes, t-shirts, and jewelry, from which all of the vendors buy their merchandise. I wish I was smart enough to be that person.
Large number of buyers and sellers: Boy, are those places crowded. Thankfully, most are smart enough to learn English to converse with the (dumb) westerners who come by, often in large numbers. Bustling place, especially now that they’ve moved inside (if I don’t comment on this at some post later in the week, comment if you care, and I’ll get to it). The shops are all very close to each other, so if you don’t like one, take two steps forward and try again.
Imperfect Information: Oh boy, is this one. It’s a market. You vs. them. Prices are usually inflated at least 200%. About 700% on some t-shirts, today. If you don’t know how much the items are worth, you’re going to pay too much, of which the sellers have absolutely no problem allowing you to do. Best hope you’ve improved your appraise and persuade skills before you come (at least 10 ranks =D). And remember: the best thing you can do is walk away.
Sellers are price-takers: This one I’m not perfectly sure about in my head, but I think I’m right. As mentioned above, the sellers are trying to get you to pay too much, but in the end, if you can get them down to what it’s worth, they know what it’s worth. And they’re going to stick to that value. If it’s too little, those are losses. If it’s too much, then the (smart) customer can walk on to the next shop.
So I ended up picking up t-shirts (not for me) and DVDs, though by no means splurging. Not like you can really splurge, with prices as they are. Back in NY, I ‘member people getting DVDs for $3-4 on the street. Definitely overpaying. Of course, the plane ticket is expensive, but when you move past that, you’re talking about much cheaper merchandise. 2 things make stuff really cheap:
1) Standard of Living: It’s just cheaper to live here. If you were here, you’d know why.
2) Exchange Rates: China had pegged the value of the RMB for quite a few years, since it’s good for international trade (mostly, I think). Ask any good econ student to explain if you don’t get it. Anyways, the exchange rate means that stuff is ridiculously cheap for us.
Here in China, it’s fair to pay about $.50 for a DVD, $1.25 if you’re looking for the real deal (as real as it gets around here ‘neways). Not bad at all.
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