Thai Business Practices

If you’ve been here in Thailand for a little while you’ll probably start to notice something. If you were an entrepreneur in your home country you will definitely start to see some things that are curious among Thai business owners and employees here.

It’s astounding to me that some businesses can open up and expect to survive any longer than their savings holds out. A storefront on a side street usually includes an apart ment above it or even 2 stories above it. The cost in this city is about 4000 to 5000 baht per month on average. A GREAT salary in this city is about 8000 baht. People can survive on 4000 on their own – without living with their families.

There are businesses that open on a main street or a side street that are selling things like drinks and snacks. They have a VERY limited selection and they don’t expand at all. They open and then they close in a couple months – sometimes less. These places have a lot of room and don’t use half of it. They work 7 days per week and usually same person(s) there everyday without fail. There are businesses that open a hair salon. In this city I’d be dead wrong if I didn’t say there were over 400 hair salons. This is not a big city, maybe 50,000 in city limits. I think MOST Thais don’t get their hair done and prefer to cut it themselves. The younger generation – in school probably are the ones that tend to get it done regularly. Older women are the other group and maybe a quarter of them get their hair done once per month. These are not good numbers. I’ve seen more hair places go under than anything.

The attitudes of Thai service workers is LOVELY. They are, for the most part , the most pleasant service people I’ve ever met. In America I’ve had my food tossed at me as I’ve gone through a drive-through. I’ve had arguments through the speaker as they’re taking my order. Western countries have the worst service at their fast food restaurants – maybe in the world? Not sure, haven’t seen the world yet…

So, the attitudes of people you’ll deal with are delightful.  There are very strange business practices though.  First of all, the price of nearly everything in Thailand is negotiable with the exception of big stores like Big C, Tesco, Robinson Center, etc. Any small store owner has authority to offer deals and go down on listed prices. Now, you might find 4 of something that you want to buy… The stated price for one of the items might be “140 baht”. If you say you want 4 they may bring out the calculator and you think they’re adding up 4 and multiplying by a percentage to give you a discount… sometimes yes, but many times, no. You may ask them, “Since I’m buying 4 of these, do you think you could give me a discount?”. A lot of times they will smile and say “no”… If you start to walk out of the store they will NEVER call you back and offer you a discount. The Thai business person seems to be only able to think in terms of immediate cash coming in.  There is no thought whatsoever to retaining a customer or for saving a deal… If you offer 500 baht on the 560 baht purchase they may just smile and say no… Sometimes they will come down 20 baht or something very trivial… but I think that they must be thinking – this is a westerner… he has money – he will buy it at whatever I’m selling it at.

Now, this might be true, and might not. In this city I’d venture to say there is not even 1 store that is unique and sells a large amount of things that no other store is selling. There are multiple stores here selling EVERYTHING. It’s the Thai way… So, knowing that, I can walk away from any deal. So can anyone here – the local Thai buyers know even more places than I do that sell duplicates of what is for sale at any one store. What are the business owners thinking?

Here’s another funny thing… I found a house for rent that was really quite nice. Peeking through the windows I saw it had large white marble tiles, hardwood cabinets and granite top in the kitchen.. 3 air conditioners upstairs (no full-house air here)… nice yard, bordering a rubber tree plantation and surrounded by other even more spectacular houses… I called the owner, she came… when I saw the inside of the house I was more amazed… I showed NOTHING on my face though. When I first called her she said she wanted to rent it to 3 families of westerners for maybe 5000 baht each. Laughing inside I knew her chances of that. Even for 2 westerners to live together with a roommate here is ludicrous because the prices for accomodations are so cheap. Nobody in their right mind will live with someone else here. Anyway…

So, her husband is watching me the entire time to see if I like it. The wife too – is talking about how much they put into it and the outdoor shower in the master bedroom upstairs and the furnishings and the this and that… They ask ME – “HOW MUCH DO YOU WANT TO PAY FOR IT?” I repeated that back to them – and said – “How much do I WANT to pay for it?” – and had a very confused look on my face. I repeated it a couple times to show that I had no comprehension why they’d ask me such a question. I told them after a minute – “I want to pay 1500 baht per month, can you put a refrigerator in too please?”

They got very serious looks on their faces and looked at each other… oh, no, no… they said… we have to pay the mortgage every month” I said, “oh, how much are you going to offer it to someone for monthly then?”  They both talked for 20 seconds and were very serious… The woman was part Chinese and the man – fully Thai as far as I could tell.  The woman said, slowly and clearly – “we really want 7000 baht per month.” I said, “Oh, OK, sounds good to me.”

And that was the deal. No money down for deposit and 7000 per month for renting the house with the NICEST furnishings and interior I’ve SEEN in Thailand. I was excited to get it for anything under 10,000 and I had the feeling they were giving me their lowest acceptable rate. It was fair – so I agreed.

Anyway – that’s one of the things they’ll pull – “How much do you WANT to spend?”  Wow. I want to spend as little as possible and I never give a meaningful offer when they throw me that curve.  Don’t you either!

Another thing… walking around Big C or Tesco and looking for food items.  There are many things you might want to buy more than ONE of.  So, you look at the packages… there will be big ones and small ones… you start to do some addition in your head… 100 grams of coffee for 240 baht…  or 50 grams for 110 baht…  It’s so funny, but the sales psychology is reversed here oftentimes – and for what reason I haven’t a clue.  They will offer you 2 smaller packages for less than 1 bigger package.  Now, in the USA they WANT you to buy more coffee so the big package will ALWAYS be priced better because you’re buying more quantity and they want you to buy the bigger one so they make more money. However, in Thailand, they make the biggest package the worst buy and so I buy a number of small packages. ANYBODY ELSE NOTICE THIS? I’ve had friends tell me the same thing -that they just can’t figure it out.

Thai business practices are really quite something to see…

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