I was working late last night and needed some noise in the background, so I flipped on the TV in my office and channel surfed for a few moments. Eventually I came upon a little gem of a show called “Pawn Stars” on the History Channel. Pawn Stars follows real-life Vegas pawn store owners Richard and Rick Harrison as they wheel and deal in everything from vintage Playboy magazines to extremely rare continental currency. At first I thought this show was going to be a bit of mindless entertainment (perfect for background noise), but after a few minutes of watching I was hooked as I realized this was no “Dog The Bounty Hunter”. I actually learned a hell of a lot. I realized very quickly that these guys were no dummies and many of the things that are second nature to them would be valuable lessons to anyone who owns a business or is starting one up. So what are these lessons?
1. Know Your Shit
If you don’t know your shit, people will take advantage of you. You may not think of a pawn shop owner as the smartest person in the world, but the Harrisons have an almost encyclopedic knowledge of history and objects that have helped shape it. In the show, a wealthy customer who collects rare cufflinks walks out of the pawn shop after making a purchase for $200, and says, “In most pawn shops I would have been able to pick these up for $30, but these guys obviously know their stuff.” Being extremely knowledgeable about what your selling and knowing its value will allow you to sell for $200 what your competitor sells for $30.
2. Know Your Market
Since pawn shop owners only make money when they actually sell the items in their shops, it would stand to reason that the successful ones really understand what people will want to buy. Ricks son Corey has a bit to learn in this department as was evident when he paid $38,000 for a used hot-air balloon. The balloon was probably worth $50,000 and could technically be sold at a profit, but as Rick explained to his “idiot” son in an incredulous tone, “How many people do you know in the market to buy a 12 person hot air balloon?” Just because your product or idea is valuable doesn’t mean anyone will buy it. ‘Nuff said.
3. Know Your Limitations
A guy walks in the shop with what he says is a 1960 Gibson Les Paul Custom guitar. These guitars have fetched over $400,000 at auction, so Rick was certainly excited. Rick has bought and sold many vintage guitars and to him it appeared legit, but was it really the highly sought after 1960 model? Unfortunately in the 60’s Gibson was really bad at keeping their serial numbers straight, so a serial number that appeared as if it was from the 60’s could really be from the 70’s at a difference of hundreds of thousands of dollars in value. Rick knew that his knowledge on this particular subject was limited, and brought in an expert. It turns out that there were extremely small clues (which only an expert could identify), that placed the guitar at a 1971 vintage and a value of a few thousand dollars, not the $25,000 the man wanted for it. Rick realizes that there is no way you can be an expert in everything, and that tricking yourself into thinking you are can lead to big trouble. He has assembled a crack team of advisors ranging in expertise from colonial period maps to rare handcuffs. Know your limitations and build a team of people who can help you overcome them.
4. Tell a Great Story
A couple walks into the shop and says they are interested in buying a clock that is set up high behind the counter. Rick says, “You mean the Death Clock?” The couple is instantly captivated. Rick goes on to tell the story behind the clock in that the process of casting the gold plated exterior in the 18th century required the clockmaker to evaporate mercury. The mercury vapors would cause insanity and eventually death. Many clockmakers died making these types of clocks, thus their moniker. The simple act of knowing and telling the great story behind the clock instantly made it more valuable in the customers eyes (I suppose in this case you could say as valuable as a persons life). Having a great story behind your products and ideas can instantly add value and give your customers something they can relate to.
5. Love What You Do
A man walks into the pawn shop and presents an exquisite example of continental currency designed and printed by none-other than Benjamin Franklin. Rick is instantly aware of the significance and value of the artifact and must have it. After haggling for a few minutes, the man agrees to a price and sells it to Rick. Rick then goes on to say, “This is the type of thing that I’ll put a ridiculously high price on, so that no one will buy it.” You start to realize after watching a few episodes that Rick is a history buff first and a pawn shop owner second. It’s clear that he uses his pawn shop as way to fuel his passion for history and the objects that helped shape it. This guy makes money on something he lives for. If you love what you do, other people will follow suit.
It’s always fun to find lessons in unexpected places. Bravo Pawn Stars for putting these lessons to work in the real world.
Cheers,
-jim
