It should be played like a charade and with good humour.
Never go to the markets wearing heaps of jewellery. You give out the message that you are rich and the prices will start very high. Even just being a tourist you are considered as being rich. Any one who can afford to travel in Balinese eyes is rich.
There are several levels of starting price depending on where the tourist is from, the highest price to the lowest :- Japanese, American, European, Australian and then local. Tourists will never get local prices.
It is a good idea to go to one of the supermarkets or large souvenir shops that are now open to get a rough idea of the price. Of course this is difficult to apply to original paintings or carvings.
Play it "cool". Don't look over interested in the item you want to buy. Certainly never say to a friend or to the seller, "I like that." The price goes up straight away. If there are two of you, one should play the part "You don't want a ......", give the impression you don't really want to buy.
Here is the drama of bargaining:-
Shopper casually asks, " How much is this ....?"
Seller, " 500 000Rp"
Shopper, with an amazed look, "Wow that is expensive."
Seller, " It is good quality."
Shopper, " How about 150 000Rp?" ( Many people suggest starting at 1/3 of the original offer and working up to 1/2 the original asking price.)
Seller, usually laughing, " I can not sell at that price I will be bankrupt. I'll let you have it for 400 000Rp."
Shopper, still smiling, "I have seen them for 200 000Rp. I'll give you 200 000Rp."
Seller, "my best price is 250 000Rp."
Shopper, carefully checking the item, "Humm, not really the colour I wanted." ( here the friend can say " We saw some that you liked in Kuta")
Shopper, "Last price 220 000Rp"
Seller, "250 000Rp. I can not sell for less. Honest."
Shopper, losing interest and walking away.
Seller, "OK, OK, 220 000Rp"
At this point the seller agreed to the Shopper's price and the shopper is morally obliged to buy as the bargain has been made.
If the shopper has offered a price too low then the seller will let the shopper walk away.
The shopper can try again at another place.
Somehow stall holders seem to know the second a shopper takes an interest in something and the whole market will offer the same item.
The first sale of the day, is extremely important to sellers. Balinese are very superstitious and if the first contact of the day with a tourist results in a sale they consider they will have good luck all day. Conversely if the first contact of the day does not result in a sale the whole day is ruined. Sellers therefore offer what is known as "Morning Price" to ensure a sale as soon as possible. Sometimes Morning Price can be below cost - just to get a sale.
After the first sale of the day the seller will brush all their stock with the money from the sale to further increase their luck.
Always act out the play.
Almost all sellers are honest however the sellers at the look outs at Kintamani are less than honest.
Even an old Bali traveller like myself can get caught out.
The sellers crowd around the tourist buses or cars.
They show tourists beautiful carvings at ridiculously low prices.
Once the tourist has handed over the cash the seller switches the carving for a very inferior one that looks as though the apprentice made it. This is done quicker than the eye can see. The seller has a friend standing behind them. This is easily done as the sellers usually crowd around. As the seller pops the beautiful carving into the plastic bag it changes into the dud one - quicker than a magician can produce an ace. The buyer opening the bag realises they have been had. The seller has vanished like the Phantom.
If you buy a carving at Kintamani, get it in your bus or car and then give the seller the money.