Negotiation is a cornerstone of business, and like business, it’s an ancient art. There are many books on the subject, from Robert Cialdini’s Influence: the Psychology of Persuasion to Trump’s Art of the Deal. But while watching the History Channel I realized that some key business essentials can be gleaned from the show, “Pawn Stars.”
In the program, a Las Vegas pawn shop is run by a cast of colorful characters including a curmudgeonly “Old Man,” his affable son Rick, and his rebellious grandson “Big Hoss.” The show incorporates a blend of historical insight, humor, and good old fashioned business wheeling and dealing.
Here are some takeaways:
Start with a firm number, not a “hope.” If you are interested in selling something, and asked for your price, don’t say, “Well I was hoping to get $5,000.” No one cares what you are hoping for, and right then and there they know to stick a pin in your balloon of hope and hit you with a lower offer.
Know all you can about a situation. These days there’s no excuse not to run a search on the item you want to sell (or buy) and the people or organization you’ll be dealing with. I’m amazed to watch people walk into the pawn shop without knowing anything about what they want to sell or what it might be worth. P.T. Barnum had a word for people like that and how there’s one born every minute.
Don’t be wishy-washy. Often, sellers on the show say they are “looking to get $400 or $500” for their flea market find. If you say that then the $500 is immediately off the table because you’ve already negotiated with the other side by saying you’re open to $400. Don’t let the other guy help you decide where to start a deal.
Remove emotional attachment. Do you want to sell something or not? Once you have decided to sell then you have moved into the realm of a business transaction, and any sentimental value the item has to you will be irrelevant to the buyer. (“Well, you know, my grandmother used to keep this in her kitchen…”)
Always be ready to walk away from a deal. The Pawn Stars guys regularly turn down unique, cool items not because they don’t like them, but because acquiring them makes no business sense.
Know your business. Business owners can only stay in the black if they can readily sell an item for more than they bought it. If they can’t do this they can’t buy your item no matter what you think it’s worth. Whenever they deviate from their core business and think they can invest more money in an item to fix it up, they increase the risk of losing money.
Retain SMEs (Subject Matter Experts). For Rick and his crew, the job is to run a pawn shop, not to be be experts on esoteric obscure objects of historical interest. That’s why they are quick to call in experts on vintage guitars, toys, currency, or antique weapons. Build your own network of subject matter experts you can call on, legal, tax, sales, marketing, real estate.
Finally…Never underestimate the power of a good poker face.