Why do so many personal finance sites focus on spending LESS
instead of making MORE? Sure, managing your spending is important, but too many
people get tunnel vision on cutting costs.
I was working at Shelby's Pro Shop, a golf and tennis
retailer in Deerfield, where I grew up. I sold shoes and tennis rackets. I
didn't play tennis, but I learned how to be a very good tennis-shoe and
tennis-racket salesman. That's because I made the discovery that people's
reasons for buying things often don't match up with the company's reason for
selling them.
Manufacturers used to dispatch reps to the pro shop to
educate us on their latest and greatest technologies. They'd tell us about the
new ethylene vinyl acetate midsoles that made shoes more comfortable; the
Goodyear-brand rubber outsoles that made the shoes more durable; the new
variation of Nike Air that was miles ahead of the competition.
They thought they were arming us with facts that would
impress the customers. But, it turned out, none of that stuff mattered. In
fact, it had a negative effect. When you describe things in terms people don't
understand, they tend not to trust you as much. Trust is important. You can
bluff your way into money, but for only so long.
Once I stopped slinging the technical terms, I realized that
when customers shop for shoes, they do three things. They consider the look and
style. They try them on to see if they're comfortable. And they consider the
price. Endorsements by famous athletes help a lot, too. But the technology, the
features, the special-testing labs—I can't remember a single customer who
cared. I sold a boatload of shoes and tennis rackets that summer.
After a couple more summers at the pro shop, I decided to
start my own business. It hadn't taken long to notice that retail was pretty
simple: The store bought stuff from distributors, marked it up, and sold it at
a profit. Why couldn't I do that, too? It turned out, I could. I got a
reseller's license from the state of Illinois. This allowed me to buy stuff
cheaply from distributors.
I originally got the reseller's license so I could buy
stereo equipment, computer equipment, a cordless phone, and a radar detector.
(My rusted-out Datsun 510 was held together by bungee cords and duct tape, but
I still liked to drive fast.) I soon realized that if I wanted these things, my
friends probably did, too. I could sell them stuff below what they'd pay in the
store and still make a profit. So I picked some prices that seemed reasonable,
pitched my peers, and the orders came in. I didn't sell a lot, but picking up
an extra $100 here and there is a big deal when you're a teenager.
