SPECIAL DEAL JUST FOR YOU

That’s a phrase many travelers have heard from many street hucksters in all corners of the planet. If you go along with that, the special deal is probably highly profitable for the guy offering it.

The trick that these guys pull off has to do with influencing perceptions. A good salesman will tell you that perception is reality. People want to have this perception of a bargain because it makes them feel good about their purchase, and it validates positive opinions they want to have about themselves. That is, that they are smart, perceptive, and able to influence people.

However, if everyone is always out there, getting the bargains, and beating the market, then nobody is. Markets tend to be efficient and if you are only motivated by chasing bargains, then you will probably be negatively impacted by this unless your knowledge level is extremely high because you can end up being lead around by your perceptions rather than facts.

Anyone who got blown out of the water by a penny stock on the stock market can attest to this (solemnly raises hand).

When I think about bargains, I remember all the stores I walked by for four years in Montreal as a student. I saw so many signs that had 50% Off! Liquidation Sale! signs up. Somehow that going out of business sale never completed and the store continued on at a merry clip for years.

Also, the Lobster Festival at the low to mid end restaurants was a year long affair. Tourists never knew it though, they’d see the signs and think oh great, I can get some lobster for a discount! So they go in. But that same deal was out there on the table every day.

The special Lobster Festival was only about influencing the customer’s perception. In fact I was just in Montreal a few weeks ago, and one of the restaurants still had that sign up… 25 years unbroken now of the Lobster Festival.

There is basically no margin for a low to mid end operator to operate. Customers demand bargains, and the reality of running a business is that you need to exceed your expenses or you’re done. So the end result is to cater to the customer’s demand, in this case, they offer the perceived bargain and the customer goes home happy even though there was no special price to be had in reality.

Sometimes I get requests for top quality items along with a statement that the buyer is not concerned with it being Juyo. Then the buyer goes along to describe a blade with top quality properties in all dimensions. They want top condition, 700 years old, by the best school, excellent activities and very healthy. Such a blade is going to be Juyo, if it is not Juyo now, it will be tomorrow. Any dealer handling such a thing knows this. The value of such a blade is not based on the papers, it’s based on what the blade is.

The buyer however is demanding this kind of excellence, but wants to pay only for a mediocre price.

They’re asking for Lobster Festival and eventually, someone will give it to them.

In other words, if you go around trying to get something for nothing, sooner or later someone will agree to that deal. An honest person won’t be able to agree to it, unless it is very special circumstances, because to do it every time means going out of business fast. When someone agrees to give you something for nothing, your grandpa or grandma will be able to tell you what is probably happening there if you stop to take their advice.

There are a few ways to get special pricing.

Distressed sales, emergency funds, maybe it is just something that has been on the market a long time and a dealer wants to cycle out of it to put his money into something else… those can be reasons that you can pick up a bargain. Sometimes dealers just want to cut down on inventory, especially of things they have had around for a while. If you catch the right moment, you can get a good deal.

Usually it is the special customer who gets a special deal, and repeat buyers often get the first crack at an unusually great piece or at a special bargain before it goes out to everyone else.

For the dealer, if they are going to take a hit on something, then the preference is to see it go to someone who they have had a mutually good experience with going back a ways. Or, possibly if you just happened to ask at the right time while that dealer was pondering cutting something loose.

Another example that has happened to me both as a buyer and a seller, is when the guy doing the selling has his eyes on something else and needs capital to make it happen. In this, timing is a lucky thing to have.

There are times to be concerned though and times to be careful. If it sounds too good to be true, it probably is. You usually can’t get something for nothing. I too would like to buy that 1965 Ferrari Daytona, with 10 miles on it, and pay $1,000 for it. But if I keep asking dealers for this, someone is going to sell me a Pontiac Fiero with a body kit on it and call it a day. Their rationale will be, if I can’t tell the difference, then it’s my problem, not theirs.

Be careful with bargains. If it is Lobster Festival for 365 days a year, it is never Lobster Festival.

Or maybe it is. Just that you will be the lobster.

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