Pawn Stars and business lessons

Have you seen Pawn Stars?  It's basically a white-trash Antiques Road Show, but is oddly fascinating.

It's a reality show about a pawn shop in Las Vegas.  The folks on the show primarily come into the store to sell their items rather than pawn them. People sell family heirlooms, garage sale finds, and assorted things they have lying around the house.

There are reasons to watch it beyond the normal reality show train wreck -- the business lessons.  There are key things to learn about negotiation.

Don't name your price first.

When Rick buys anything from the customer, he always starts the negotiation by saying, "How much to do you want for it?" The customer names his price, and then Rick proceeds to talk them down.  Even if it was a price Rick was prepared to pay, he uses that as the benchmark to talk them down. The customer is never going to get the price they name.

Know the value of your item.  

Many times Rick has to bring in an expert to appraise and item because he's not familiar with it.  In some of those cases, the customer has an idea of the value, but is often wrong.  The only expert involved is the one Rick brings in.  Sometimes they're both surprised by the response.  Other times Rick might not even need and expert, but the customer has no idea what he even wants for the item.  Throughout most of the exchanges, the customer is at a disadvantage, and Rick controls the negotiation.  If you don't know they value of your item, there's no way you can be sure your're getting a good deal.

Be prepared to walk away.

Most of the time customers aren't in a position to say no.  Rick will often say no to a customer if he doesn't think he can sell an item.  Many of the customers are not willing to walkaway with  nothing. They will take as little at 10% of what they wanted sometimes.  If you can't walk away, you can't get a good deal.

Understand what your negotiating partner wants.

Rick almost always understands what his customers really need. They either need to quickly get money or they need to get stuff out of their house. His customers don't always understand Rick's needs.  Rick will tell customer what he claims he needs.  He needs to buy the item, at a low enough price to resell it. Based on the prices he cites, he expects to make 75% to 100% markup on the items he buys. And he expects items will often take a while to sell.  Customers are surprised at this, and they are not prepared to negotiate accordingly.  Whether or not that's a reasonable margin  may be a point to argue, but if the customer doesn't understand that, they are not as prepared.

There's a lot to learn about negotiating in this show. You can also learn some interesting things about the trinkets people bring in to sell.  And, of course, it's just plain good entertainment.

Are you a fan of the show? What lessons do you think viewers can learn from it?