Fairness

Discussion in 'The Barber Shop' started by Alacrity59, Jul 8, 2019.

  1. Alacrity59

    Alacrity59 Moderator Emeritus

    Trade is how we all survive. As self sufficient as we can try to be / or not we all trade what we have for what we need or wont.

    So we negotiate.

    On a much broader level large enterprises have values as to how they do business.

    Ok . . . I've probably dulled you all out by now.

    So . . . darn . . . way loaded question. . . Do you shoot for the maximum today and screw everyone to your advantage? Or do you be "fair" to your customer?

    To put this into context I'm re-reading things I've saved over the years on "Game Theory" . . . and there is a major branch called "Rabin's fairness model".
     
  2. If you're not fair to your customers, you will lose them.

    But...if you're a mega-corporation you may be able to get away with it. Get a monopoly going and people don't have a choice. The big box stores have pretty much ran out some of the small businesses here. Not all though. That's why I shop the locally owned lumber yard and the old fashioned hardware store here. All of the local Mom and Pop grocery stores that were here when I moved here over 30 years ago are gone now.

    I'm getting ready to buy a window air conditioner that should be a bit quieter than the portable one we have to help out the central air (electric bill went way down when we got that) and I found one at home depot, but I also found an equivalent one, for about the same price, and also has free delivery and installation at a local furniture and appliance store. They also have a local repair place that will honor the warranty; the closest warranty service center for the home depot one is in Plano two hours away. Guess where I'm going.

    And yes...I've read about the Game Theory and Rabin's Fairness Model, but that's getting a little complicated. Trade always needs negotiation.

    I trade beads for your spear.

    No. I need five horses for it.
     
    Last edited: Jul 8, 2019
  3. Supply & demand? If you control the supply, you can demand.
     
  4. Kind of funny the timing on this thread. I have the cowpony channel playing on TV now, and the Big Valley is on with the episode of The Emperor of Rice. It's where a friend of the Barkley's tries to buy up all the rice supply coming into California to corner the market and set the price, and the Barkleys refuse to help and try to stop him.

    Very interesting. 1968 episode.
     
  5. Ask Sears if they can disregard the customer. Anyone remember Ashton-Tate and "If DBASE IV doesn't have it in it, you don't need it?" The same thing applies. Don't provide the customer with what he wants, and you'll lose him. That includes fair service.
     
  6. Needed to repair the doors for my 20 year old shed. All the big box stores could tell me is (go online to the manufacturer's site. Now, how am I supposed to do that, when my shed predates the internet (well, it's close)?

    Went to my local Mom & Pop, with an exemplar of what I needed, and found out they have a case on the shelf. We're renovating a bathroom this month and, if their prices are close, guess where I am buying the fixtures?
     
  7. I was just discussing this over lunch with a property developer. He re-iterated what a few books on negotiation say - you want return business. To do that you need to explain exactly why the price you are proposing is fair, what it depends on and how it could be altered by changing some of the elements. That way it's about the deal, not the person. When you just try and "screw the person" by trying to force through a deal which isn't directly related to value, people in your direct sector will pick up on this and note it, and they will prefer to deal on a more regular basis with operators who base negotiations around value factors that are clearly understood by both parties.
     
  8. emwolf

    emwolf Contributor

    I've been in sales most of my adult life. The teacher I've found that makes the most sense and has worked for me is a gentleman named Jeffrey Gitomer. One of his phrases is "don't sell for the end of the month, sell for the end of time." Most sales people (myself included) have monthly quotas that affect the paycheck. And I've been as guilty as the worst of them hustling towards the 25th of a month trying to sell something for bucket A and more for bucket B. As long as the corporate side doesn't mess with you too much (although that's becoming a larger problem every day) I do my best to ignore those needs and focus on the customer. If I sell him products he needs and appreciates he becomes a steady revenue stream. If I force them into one product or another to meet me goals, he becomes just some short term money. So, my goal is fairness. A good salesperson can orchestrate a win-win.
     
  9. Doc4

    Doc4 Moderator Emeritus

    One of you cuts it in half and the other one picks which half he wants.

    That’s how my father got us to divide stuff when we were kids. We like to think of ourselves as “fair”, but we still tend to skew things in our favour without thinking.
     
  10. Mr. Scruffy

    Mr. Scruffy Moderator Emeritus

    I'm not sold on the assertion that maximizing your profit = screwing the customer.
     
  11. It only works if the goal is to close out the business, anyway, and have no need for repeat customers. To steal a line from Douglas Adams, it comes from the "If it's take the money and run, I for one could use the exercise" school of business.
     
  12. That's what some of the hotel owners here (I won't say what country they are from) do to the hotels they buy. They don't make the franchise required repairs and upkeep to the property and push it to the limit. They do that to maximize the profits and usually sell the property after about 2 years then start over with another property. I know of one that had their major hotel sign pulled until they came up to requirements, then the hotel chain finally permanently pulled the sign. And that was after several owners had pulled that stunt over many years.
     
  13. Alacrity59

    Alacrity59 Moderator Emeritus

    If I recall correctly you are on the same end of business that I am. I'm fully in agreement with what you just said. I'll add that you will not maximize profit by screwing your suppliers either. For that matter you will not maximize profit by basically screwing anybody.

    That being said, there are huge consulting companies that will work on contingency that will improve operations by doing things that will get them their percentage of "improvements" in the short term without consideration of the longer term.
     
  14. My personal philosophy on commerce is:

    I do not have to make the last dollar.

    I just want to make more than anyone else who touches it makes.

    Buy low. Sell reasonable so that there is still some profit to be made by someone else
     
  15. Mr. Scruffy

    Mr. Scruffy Moderator Emeritus

    This.

    There will always be scoundrels and scalawags and history has proved that their shenanigans are not sustainable.
     
  16. That's the AAA video game industry right now (likely other industries, too). The executives of the major publishers only care about making all the money they can right now. It doesn't matter if the company collapses in five years, because they already get to bail out with their multi-million-a-year salaries
     
  17. Ad Astra

    Ad Astra Ambassador

    Wife and I will go a long way to work with a person we like.

    It isn't all about cost.


    AA
     
  18. emwolf

    emwolf Contributor

    I firmly believe that the "corporate" mindset is for the end of the quarter, for dividends to be maximized and that longevity is not a consideration. I know that's how the corporation that employs me operates. And I do know about consulting firms coming in and destroying something for a short term profit. A great example of that is Newspaper Services of America. They approached Sears and told them they could save millions of dollars in advertising expense. To do this, they simply need to stop getting the full circulation of the newspaper for their advertising flyers. If they maintain a radius of 5 miles around any one store they will save millions and not see a drop in foot traffic. Short term results is they saved millions and did not see a drop in foot traffic. Long term results was they lost millions because they lost previously loyal customers. There are many other factors that killed the foot traffic besides their decision to stop trying to reach everyone they could (the foundation of their original business model). However I work in a rural part of the country where this behavior alienated them from their strongest customer base.
     
  19. ackvil

    ackvil Moderator

    Ethics and fair business practices can matter. A friend of mine is in the lumber-milling business. His company sells lumber (particularly finishing trim) that goes into higher-end homes. There are only a few of these companies in the business in the area he conducts business. One larger builder of homes screwed my friend twice. In both instances, they placed large orders of trim which were delivered. The terms of the orders were 2% in 10 days, net 30. After 45 days the builder paid the invoice after taking a 5% discount.

    Word got around and now none of the building supply companies will deliver any building supplies to this builder unless they are paid in advance or on delivery.
     
  20. I never raised the price of my haircuts. Not once, and gave a senior discount of 2 bucks off an $8 haircut. My permanent waves were cheap too. But God was good to me. Never missed a meal, and I was always tipped well.
     

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