Hardcore Business Lessons I Learned From A Dealer

I learned six million dollar lessons at my first job. Working hot Summers as an 18 year old in a warehouse at a 5th generation fur coat dealer. And this business made it through two world wars, multiple recessions and these lessons I have taken with me for life. The first lesson he ever taught me was how to deal with angry customers. I stole my Apple Care that I could walk in the store and get in the car. This lady comes in and she is piss angry. She's like, where's Johnny? He sold me this coat and this button came off. This is so ridicul because I spent so much money on this coat, blah blah, blah. She's just making a scene. I didn't go in the retail store that much because like I looked like an 18 year old and I wasn't going to be selling any $25,000 coats. John, the owner of the store, I'm on the other side of the door so she can't see me. And he's walking towards me to turn out to go deal with her. As he's walking towards me, I see him roll his eyes. And then as he turns a corner, he goes right into character. Mrs. Johnson, that is ridiculous. I cannot believe that you had a coat that had a button that was missing. Who sold you that coat? I need to find them right now. We'll get rid of them. Did see you with the coat without the button. We're going to get to the bottom of this right now. All of a sudden her whole tone changes. She started backpedaling. She's like, I mean it, you know, it wasn't that big of a deal. Like it was, it was just a button. It probably. No, we need to get to the bottom of this. This is not acceptable. And she all of a sudden became calm as kid. She's like, you know what, I just want it to be fixed. If you could fix the coat. And he's, he grabbed it from me, he's like, we're going to handle this right now. He goes to the back, they fix the thing in five minutes. He hands it back to her and she's like, John, you're always the best. Thank you so much for dealing with this. I'm sorry. Bit over the top. I just, you know, I've spent so much in the jacket. And he's like, as you should be. She walked out the door, he turned him in, he was like. And he said there could only be one person in the angry boat. So whenever someone comes in the angry boat, what most people try and do is they try and Downplay them. And so they say, well, it's not that big of a deal. And what happens is the person doesn't feel validated. The person who's upset then increases how angry they are because they want the person to validate why they're angry. And so what happens is they just keep getting angry and this person keeps trying to make them less angry. And then it just creates more and more of a discrepancy between the two people. Now, the flip side is she got in the angry boat, and so she had to get out of the angry boat. And so whenever you're dealing with an upset customer, you need to validate their anger. And in a real way, if something was messed up and you have very high standards for your business, the moment you say it's not a big deal, it means you're not actually taking responsibility. Even if their complaint is ridiculous, it still is your responsibility. And so you have to take ownership of her, because the alternative is you don't and you never get better. The second lesson he taught me was about creating a new product. They realized that in the summer, they never had any demand because people aren't trying to buy for coats in the summer. And they're like, huh, what can we sell to people during the summer? And so they came up with a genius idea. We'll store and condition the coats for them. As they sold every single customer coat, they said, hey, every year, make sure during the summer when you're not using the coat, you bring it back here. We can repair any damages, we can sew things up, we can condition the fur, and we can make it last 2, 3, 5 times longer so you can pass it on to the next of kin. And then he would give this a little analogy. He's like, right, if you're going to buy a $50,000 car, you'd pay 100 bucks a month for insurance. It's the same thing here. So you created this analogy that compared fur coats, which people didn't understand as well, to a car, which was something they did. And so what happened is, overnight, he created what I would consider an insurance product. Insurance products don't actually have to be insurance. You can charge people for the safety that whatever they just bought will continue to provide value for a longer period of time. And the cost to deliver on this was so low because we had one 18 year old two air conditioning, three storage facility. And the upsell was lesson three was getting people to say yes by saying no. When I first learned no base selling, I actually learned it from this job when I was 18, storage is the first core thing, which is I just hang your coat up and I keep it air conditioned. And the upsell is I'll also brush it and I'll fix it and I'll do these other things. And so when they would call up customers and they'd say, hey, do you want to, you know, turn in your coat for the summer? What they did was say, hey, we're going to store and condition the coat. You don't want anything else, do you? And they would say, no, no, no, I don't want anything else. And so implied in that they got them to say yes to storage and yes to conditioning. The code, pretty slick. People want to just get the default option. We're so trained to say no to any kind of upsells that if you get someone to say no, but in so doing get them to say yes, you actually click into their subconscious automated response. Most times when they say no to salesmen, they save money. You flip the script and you align it so that them saying no actually gets them to say yes for you into the purchase. So lesson four, when they wanted to get people to actually take them up upsell that they had, they gave them a little piece of bait. And it was what I call sawdust. And so sawdust is anything in a business that has created an excess that you normally throw out. So a lot of famous things were actually made out of sawdust. Ikea pieces of furniture. They just glued together all the sawdust from lumber mills. Whey protein used to get scraped off the bottom of dairy centers because it was waste product and now is one of the most expensive products sold from dairy. What he did was he took the scraps from all the coats that they would make. In the back they made tiny little things that were made of fur. So think like little purse earmuffs. And so he said anybody who would turn in their coat would get this as a bonus. They gave away something that cost them nothing that people still perceive value as bait to get people to come in and actually take the upsell. What's even more, when people did come to turn the thing in, they would actually say, well, you want to store that too, right? And they would say yes. And then they would charge them for that. Even though they got the product for free, the storage didn't come free. And if people are listening to this, if you're listening to this and you're a consumer, you have to get around the, like, someone selling me something makes them evil. Capitalism is the only system where both people say thank you after an exchange, it means both parties are better. If someone threatens you, that's different. That's not. That's just a form of robbery. But if I say, would you like this thing? And the other person says yes, and they give me money and I give them the thing, no harm was done. If someone didn't want to store the earmuffs, then they didn't have to and they just got it for free, which is a benefit and for the business, just a cost of doing business to get the person in the door. How he was able to double the amount of coats people would buy, the first was he said, no dealers. Everyone who's a consumer thinks, oh, these must be great deals. That's why dealers aren't allowed. Once they got in, there was a sign on the door that said, limit to coats per customer. They're like, oh, there's a limit. I have to use up the scarce resource. On top of that, they would have multiple strikedowns on the price. It said final price. All sales are final. And he purposely let people in on a single file line and a fixed amount of people in the store at the same time. It created this huge perception of demand and you feel like you got to go get yours. By creating this continuity product where people would come every year to get their fur coat insured and fixed, you become the dealer for life. And so what happens is instead of them price shopping, you are going all over town. What they'll do instead is they go to you first. First instead of being that one salesman who sells one car one time, you become the car salesman for the rest of your life because of what you do between the sales. So in your business, if you have a one time product especially that's a little bit bigger in purchase, having little things that you can do even if you didn't make money on them. And then you know that on average you get customers to buy two more products from you. It more than makes up for the effort and cost of time that you put into it. And this leads me to my final lesson. This fur coat dealer was able to withstand all of the PETA pressures and all of the, you know, people being upset about animals even though they wear leather and they eat meat every day. He was able to weather that for five generations because he never stopped doing the boring work. What they do has not changed fundamentally in years. All they did was get better and better and better at it. One of the things that I found through all of the portfolio companies that we work with we own acquisitions.com to portfolio $200 million a year. The difference between small business owners and the big business owners is that the big business owners do the same thing for a very long period of time. They do all the things that right now you probably know you should be doing, but aren't in your business. They just do those. They just do all the basics every time, every day. And if you're like, man, but it's going to take me time to set up a blog, it's taking me time to do email follow up consistently. It's going to take me time to create content. It's going to take me time to build a sales team. Yeah, those are all the things that you probably know you should do. And they take time. Which is why building a business that's big takes big time, but it also creates even bigger outcomes.