Pawn Stars really put the History Channel on the map. Who would have thought that a simple Vegas pawn shop would captivate the hearts of millions of people around the world? The combination of interesting pieces and the ensuing negotiations really makes for good TV. Now, everyone knows the Harrisons: Rick, the Old Man, Big Hoss, and of course, Chumlee.
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But if you think about it, what you are watching is an actual business. Sure, there are a lot of scripted moments (it’s still a TV show), but you can actually go to Vegas, to the now world-famous Gold and Silver Pawn Shop, and try to pawn or sell an item, or even buy something from their store.
If you are starting your own business, it is an opportunity to observe how an actual thriving business is run. It is alright to be skeptical and think that their success was brought by the TV show. However, the truth is that their business has been around since 1989, and it actually was their success off-cam that compelled History to produce a show about them.
What you can do is separate the actual business practices from the fluff they produce for TV. To help you out, here are some of the business lessons you can learn from watching the show.
Know what you are doing
Hard work and passion for what you do is great and all, but knowing what you are doing is the better route to success. You can work hard all you want but if you do not have the knowledge and skills to run your business, you are destined for failure.
Just imagine if Rick and the Old Man are not well-versed in the value of the things that are being brought in by their customers—they would end up overpaying for items and there would be little to no profit gained in selling the items again. But Rick and the rest of the gang know the history and value of most of the items brought, and when they don’t, they call upon experts to help them, which brings me to the next point…
Build a network of experts
One of my favorite parts of the show is when Rick brings in an expert to assess an item for authenticity and value. The pawn shop has a slew of experts they can call on for help, probably for a fee. They have experts on classic cars, rare books, civil war weapons, toys, etc.
This should also apply to any business. As a business owner, you will be faced with challenges that are far beyond your expertise like legal, real-estate, accounting, etc. You could try to tackle it on your own, but that would waste a lot of time and resources. If there is an option to get expert help, for a reasonable fee, you should take that choice instead.
Know how to do tasks manually
The emergence of cloud technology has changed the way we do things. Now, a lot of business workflows can be automated without having to spend too much. You can automate the purchasing process with apps like KiSSFLOW, or get RingCentral for an incoming call auto-attendant. Automation is good because it is more efficient, more consistent, and more productive.
Problem is, most of these, are also dependent on a stable Internet connection. Without it, your business will shut down because you and your team do not know how to do things manually. This actually happened in one episode where, it turns out, Big Hoss and Chumlee did not know how to write a ticket manually when their system went down. They would not have only lost a customer, they might have also had to shut down for the whole day or at least until they could get the ticketing system fixed. Fortunately, the Old Man was there to teach them how to do it. Automation is great, but it is also based on the basics of manually doing things. Make sure you know the manual process first before turning to automation.
Buy low, sell high
While we don’t see much of the selling part in the show, we know they are still doing well because of how ridiculously good they are at ‘buying low’. They almost always end up buying an item with so much wiggle room for when they sell it on retail.
This again goes back to the first point about knowing your stuff. Most of the customers who bring items to the shop do not really know the real value of the object. They know what they paid for it, and that is all they want to recoup. That gives the pawn shop the upper hand because they are the ones who know the value of the item.
But knowledge alone is not enough. It also takes good negotiation and haggling skills to be able to get the price they want. If you watch any episode, you would notice that they never make the first offer. They always ask the customer how much they want for the item. Even if the customer throws an outrageous number, they will always counter with a price that is almost the amount they want to end up with, with some wiggle room. After that, it is all about getting the customer to go down as close as they can to the desired price.
Be willing to walk away
You see it in every episode: customer comes in with a great item and they haggle with Rick or the others. Eventually, Rick gives up on the deal and just tells them to come back if they reconsider. They even do this even if they love the item brought to the shop.
This should also apply to any transaction you are negotiating. The willingness to walk away from the deal is also a form of leverage. If the other side feels that you are all in and will do anything to get the deal done, they will squeeze every cent they can get from you until the deal is lopsided against your side. However, if the other side knows that you are willing to walk away, they will think twice about pushing you to your threshold, giving you an advantage in the negotiations.
So, if the price is not right, be ready to walk away from the deal even if you love it. You are running a business, and not feeding your own desires.
Mark Dacanay is a Digital Marketing Professional who has been working with a B2B company offering cloud-based services for more than 5 years. He is obsessed with anything about the cloud – the technology, not the fluffy stuff in the sky. You can reach him through Twitter and LinkedIn.