Try to find the price range of the item first do not ever assume a price or take a (perhaps biased) by standar's word for it. Before you go out shopping, spot-check prices in your hotel shop. If a smaller hotel, ask your hotel proprietor, houseboy, driver, or someone not involved with the shop what the correct price for the item in question is. The Balinese them self are always swapping price information as a way of keeping down coats.
Do not stop and buy at the very first stall, vendor, or shop you come across. Compare prices first, learn about the quality and the differences. Do all your heavy buying your last week in Bali when you are the most knowledgeable and experienced.
Start by asking the seller his price. He will be apt to start out too high. Laugh heartily and in a friendly way, as if he were sharing a wonderful joke with you. Keep things light, smile a lot, and keep on saying terlalu mahal (too expensive). Then bring him down to earth by counter-offering with a reasonable price so the remainder of the exchange is more realistic. When the seller smiles, (see Body Languages in Bali) it means he knows that you know the items value. Sometimes, in the hope that you will be over-generous, Indonesians are fond of replying 'It is up to you' when you ask How much?'
For luxury items like carvings, jewelry, textiles, or paintings, alert at 50-60% of the asking price, then inch up. For services like transportation, start out with 50% the asking price. Sundries like canned goods, soap, toilet paper, and cigarettes are usually bought at a set price from small convenience stores or hotel kiosks.
A rule of thumb is to cut their first offer end then go up begrudgingly in small increments. For example, the merchant might ask Rp 200,000 for an ikat blanket. You counter with Rp 130,000, knowing that the final price should be around Rp 160,000. The merchant will then come back with Rp 190,000. From here on you go back and forth two or three times until you 'meet' at around Rp 170,000 or so. Do not feel bed about offering less than what they ask. Remember: On Bali this is a sporting event.
When the merchant reaches his final price and will not budge, try for some 'extras.' Throw in an inexpensive item and say that you will accept his offer if he includes this small item. Try getting him to accept your credit card without charging you a commission. Or try to persuade him to absorb packing and delivery to your shipper in the final price, or perhaps to at least share some of the freight and insurance costs.
Your position is strongest when you appear not to care. As a last resort, try 'the walk away' because feigned disinterest will make for many a good deal. This is almost always necessary with bemo and honda sikap drivers (before climbing in) but is just as effective in shops. Just smile, shrug your shoulders, and walk slowly away with cocked ears. Often the driver or seller will call you back, agreeing to your last bid.
In the very least, 'the walk away' will give you a true assessment of what price the seller is willing to let the item in question go for. Sometimes you will find that your own judgement is wrong and, after asking in other shops, you will return to the original shop to buy the item!
Remain flexible. There is a vest difference between the opportunistic tourist-oriented stores, markets, end street sellers, end those businesses that offer goods and services mostly to Balinese. You tend not to get overcharged as much in the country as in the city.
If you buy more than one item, you should quality for a bulk-purchase discount of at least a portion of the price off each item. On a large bulk purchase or on a multiple luxury purchase, many thousands of rupiah should be taken out the retail total, or at least the bill rounded to an amount lower then the total.
Another strategy is not fo show interest in the item you went. Do not hover around or fondle it; try not to give a clue of your true interest. If you show enthusiasm for it, the seller knows you want it and will be less flexible. Instead, include the item with other articles you went to buy, almost as if it is an afterthrought. Throw it in at the last minute before clinching your negotiations. 'Oh, how much for this too?'
Another trick is to bid for goods early in the day just as the shop opens for business. Balinese believe that making a sale right off will give them luck the rest of the day, so they are usually willing to take a lower price just to get the day off to a good start. The expression 'morning price' means a special price given in the morning to stimulate sales (there is even a verb, penglaris).