Over the years, the Oriental rug business has sadly earned a reputation several cuts below other "ethically challenged" businesses (the used car business comes to mind). Rug dealers have only themselves to blame if they do not treat their custoimers as intelligent buyers who might, in fact, be back to buy again if they are offered accurate information and quality rugs at fair prices.
Itinerant Auctions
Among abusive rug marketing ploys, itinerant rug auctions rank as perhaps the worst.
Most rug auctioneers acquire their inventory by taking on consignment for 60 or 90 days a selection of rugs an importer has found hard to sell (if the rugs were of good quality and in demand, the wholesaler would not need to send them on consignment, but could sell them to his regular customers at his full markup). Thus from the beginning the auctioneer has less than wonderful merchandise to offer. He must find "creative" ways to sell his stock, and the more creative he is, the more successful his auction will be.
Misrepresentation begins with newspaper ads announcing the auction with headlines like: "AUCTION OF PERSIAN RUGS SEIZED BY CUSTOMS" or "LIQUIDATION OF ANTIQUE RUGS TO SETTLE BANK LIEN." Most auction ads are laughably implausible on their face--but they are crucial to the auctioneer's "hook" by implanting the idea that he is under time or financial pressure to sell his goods at less than their fair market value.
At the auction itself, usually held in an area motel, the auctioneer tries to encourage selling activity in any way possible. Rugs are commonly misrepresented as older, choicer, more tightly knotted, rarer, more valuable (etc. etc.) than they really are. Every rug is a museum piece; every rug will last 150 years; every rug is a fabulous investment. It is still common to find an employee of the auctioneer acting as a "shill", pretending to buy with great enthusiasm one or two expensive rugs to get the crowd in a buying mood. The auctioneer tries to create in any way possible the classic auction crowd psychology that can lead an individual to disregard the protective, measured consideration he would bring to a normal purchase.
Of note is that fact that a successful itinerant auction rarely lasts more than two days. The auction must be down the road and gone before buyer's remorse sets in. This is perhaps the worst abuse of the itinerant auction: the dissatisfied buyer has no recourse but to keep his unsatisfactory purchase. When the auctioneer leaves town he is impossible to contact. Even if the same individual returns to the same
town and even to the same motel he will probably do business under a different name.
Going Out of Business Sales ("GOB"s)
As with other types of retail "going out of business" sales, Oriental rug GOBs have become a distinctive marketing technique. In a GOB's classic manifestation, an entrepreneur finds a rug dealer who is retiring or closing his business and arranges to use the past good name and good will of the business to unload quickly as many minimally desirable rugs as possible. The original proprietor of the business is
sometimes paid a lump sum and sometimes a percentage of the sales, but he is almost always replaced immediately with a manager trained to run a GOB. The manager's job is to make any representation it takes to close the sale. The manager has no interest in customer service or satisfaction, for the business is now only a shell that will exist for only as long as buyers can be found.
A variation on the classic GOB is the "perpetual GOB". In this manifestation, the rug store has been "going out of business" for years. "Going out business" is simply the theme around which the store builds an advertising campaign, hoping to create a sense of urgency among potential customers.
As in every other retail transaction, be a smart consumer. Don't be manipulated into buying something you would normally resist!
© JACOBSEN Oriental Rugs, Inc.
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