More business wisdom from Fat Frank the Persian carpet dealer: this time- how to laugh with others on the way to the bank.
"It is important to establish the spirit of co-oporation with a new supplier or a party you want to do business with. Call it win-win. The question is, sometimes you have to train people to go from screw-you to win-win.
There are those who want to make money from you and there are those who make money with you. Someone might give you merchandise to sell. The chances are that that person already is fully aware of the retail market for that merchandise- he knows how hard or easy it is to sell. If the guy is smiling at you (because you are buying it expensively) than he is most certainly laughing at you.
When I started out the Afghan’s I dealt with brought me very saleable goods- at a price- $1200 a piece. I made money, but over time I knew this was too much to pay. I went to Peshawer and did not call their bluff or make them defensive. I merely said, " You had your laugh at me and I am grateful because you gave me a chance to check the market."
They invoiced me the same goods for $480. To which I answered, "Now we can laugh together."
The early high price of Afghan stock gave me a great chance to market the goods expensively. I had to be creative- but it worked. If I’d got them dirt cheap I might have just let them go for very little and not seen the great HIDDEN value within them. Remember price is not value. A businessman doesn’t trade in prices he trades in values. He finds the value in an object and then gets a good price for it.
I had to laugh when I read of a US company that is devoted to providing high quality cotton waste rags… but with a full back-up service of washing and delivery. They were very profitable. The money in a waste rag is almost zero, but add a good service to it and it becomes full of value.
The Afghan experience enabled me to find the hidden value, make money, then, when they gave me a better supply price I could discount my carpets and make even more money by shifting even more rugs. Ever since they have been laughing with me.
Where’s the catch? Only this- they knew that sooner or later I would find out the real price and if they didn’t cut it I would eventually get another supplier.
Fortunately there is never a monopoly in rug supplies.
I have a rule for a new supplier. At any one time I have 12 suppliers. The first supplier is the one who is most keen to laugh with me. The 12th supplier is the one who has only just learnt to start laughing with me. The punishment for laughing at me is that if you are the 12th supplier you are likely to drop out and be replaced.
Someone who doesn’t understand shared laughter is taught through the threat of pain not the promise of pleasure. Remember he has already turned that down when he started laughing at me. He might have his goods returned and the account terminated for the time being. With the middle-eastern market people don’t leave on good terms. There has to be some symbolic rage and discontent. The 12th or the 11th supplier from our point of view has the least loyalty. So I might turn nasty on him if he shows no sign of learning how to laugh with me.
I know that I am not very good at turning on people and I don’t pretend I am (I am a good businessmen, I employ people better than myself) so I have employed a man who can really bark and I just approve of the barking.
People learn that they cannot get our first or second account without having earned that position with a lot of shared laughter."