By Morey Stettner
Investor's Business Daily
June 28th, 2004
While vacationing in China in 1996, Jeremy Shepherd bought a strand of pearls
for his girlfriend. When he returned to America , a jeweler told him they were
worth 20 times what he paid for them.
Soon after, he launched Santa Monica, Calif.-based PearlParadise.com to sell
pearls online. Shepherd has returned to Asia more than 200 times to research
pearl farming and make deals for farmers' crops.
Shepherd, who has traveled around the world 12 times and lived in Japan ,
Micronesia and Mexico , says a key to his success is his ability to negotiate
with Chinese pearl farmers.
"Because I've lived in many countries, I have experience with different cultured,
" he said.
When negotiating with the Chinese, Shepherd takes the cultural differences in
stride. For example, he's used to facing a team of six or more negotiators.
"I'm always alone and they're always in groups," he said. "There's one main
negotiator, be he doesn't make the big decisions. They confer constantly."
Shepherd expects some theater during negotiations.
After he makes his first offer, the group often erupts in laughter and packs up
the pearl to signal they're too far apart to continue.
Yet the same people who haggle with him all day take him to a karaoke bar at
"Suddenly we're best friends doing shots," he said. "The next day, it's all
Shepherd shows patience. He might spend six hours examining a single strand of
pearls and sparring over its value.
He finds the Chinese "don't take kind" to yelling, he said, so he maintains a "surface
friendliness" at all times.
When anger flares up, he'll excuse himself to take a break or he asks for a
He also controls his positive emotions. He has trained himself to say "That's
acceptable at this point" in a monotone when he finalizes a favorable deal.
Shepherd enrolled in a Berlitz course to learn Mandarin Chinese, and he role-played
with his instructor to simulate the give-and-take of real negotiation.
He practiced his favorite dealmaking phrases until he felt totally comfortable
speaking the pearl farmers' language.
He confronts cheaters in a firm but polite manner.
One farmer, who repeatedly called Shepherd his "dear friend," switched the
product just before shipment and sent inferior pearls. Shepherd responded, "The
only reason I'll ever buy pearls from you again is because I like you. But if
this ever happens again, I'll stop doing business with you."
The farmer apologized and gave Shepherd a 25% discount on a new purchase. Today,
Shepherd spends $500,000 a year with this farmer.