As machinery dealers, we are constantly evaluating when we should trust the people we are attempting to work with. Fortunately, the United States has a solid legal system that keeps people straight for the most part, and we live in a culture with relative social trust, despite our ever-growing divisiveness. Social psychology studies have shown that people naturally default to trusting each other, and for better or worse, I consider myself one of those instinctual trusters.
Most of the people we make machinery deals with don’t try to screw us over, and through the years, Graff-Pinkert has dealt with only a few very costly incidents of theft.
The worst happened when a Taiwanese dealer did not send the Swiss machines to us that we paid a few hundred thousand dollars for. Another time, we put some machines in storage at another dealer’s warehouse, and tens of thousands of dollars in parts were robbed from them, rendering them worthless.
But usually, if we get screwed over in the machinery business, it means a customer went around us to a seller, or we bought a machine that was not in the condition it was promised, or another dealer didn’t pay us a commission we were owed—that one happened this year, and we will never call him again. That stuff stinks, but I consider those scenarios as more deceitfulness and backstabbing rather than significant pain inducing robbery. The lasting harm is more to relationships than anything.
The following is my advice to folks reading this to not get cheated in a deal, for what it’s worth.
If you ever encounter someone who says you “you can trust me,” or lectures you about “honor and integrity,” be VERY careful. The people who have cheated us in the past often said those exact things.
Does writing this blog make me one of those people? I hope not.
Another important thing I remind myself is that “getting to know people well” is not necessarily a great way to evaluate trustworthiness. My favorite social psychologist, Robert Cialdini, says that people will trust you when they know you and when they like you. I went to Asia to “get to know” the guy who would soon steal a lot of money from us. I spent several days bonding with Mr. Lin, traveling around together, looking at machines. He brought his wife on the trip, and we talked about their young daughter over dinners. I felt like we had developed a close relationship.
As I mentioned before, I am not talented at deciphering who is lying and who is telling the truth. But that’s not my fault because studies have shown that nobody is good at it. The supposed professionals like the criminal justice system and intelligence agencies get things backwards all the time. So why should I do any better?
The pity is that being cheated could been prevented if only we had done a little quick research about Js Precision. After the deal’s disaster, many people told us Js Precision Co. was notorious for scams. We never asked around about them before we made the deal because we were so hung up on keeping our amazing new source for machines a secret.
You’re probably not good at spotting a liar. After you realize this, you can figure out a better way to protect yourself.
Questions: How do you protect yourself from fraud?
When were you a victim of a fraud?
As always Noah, thank you for your content.
In response to you question – yes, as hope and positive intentions can get a person in ‘deep kimchi’ if one is not aware and careful.
I have found that if a situation make no logical, financial or operational sense – pay attention to it. It means something.
Thank you for commenting!
That is definitely the case. Don’t get me wrong, we have made some blockbuster deals before, but we need to not be seduced when deals are too good to be true.
By far the best book I have ever read on how to conduct business relationships is “The Speed of Trust” by Steven M.R. Covey (son of the famous 7-habits author, Stephen Covey). I cannot recommend it highly enough. The basic premise is that the highest efficiency and competitive advantage can only be achieved to the degree that all parties in a transaction are able to trust the honesty and intent of the others. The most obvious effect of this is that the parties don’t have to price in extra for the risk of losses due to possible lack of integrity of the others. After 35+ years in the metal stamping industry I have seen this play out in many ways and so many directions. Once you understand this principle you can never not see it in action.
I will check that out.
Was blessed, never got screwed big time!
Knew some people in the 80s that paid good money for VCRs when first released for boxes of wet newspapers.
Michael beat me to “Caveat emptor” that I learned from the Nun teaching Latin.
So an old Rabbi once told me the the Yiddish translation of “Trust Me” is something I cannot post here, but starts with “F” and ends with “U”…
As President Donald John Trump said in his book “Art of the Deal” :
Some of the best deals, are the ones you walk away from…
I love the scene in Monty Pythons’ “Life of Brian” about haggling.
Don’t ask, Don’t get.
Life is a game, the rules vary far and wide!
Gotta learn to play and win!
Still be fair, and be able to sleep at night knowing you did not screw someone over.
It is said, the best deal is when bot parties walk away slightly dissatisfied.
That is balance…
May you all Not Get Screwed!
In my early 20’s and looking at buildings to expand my shop, I met with a part time real estate agent- part time preacher. Right off he told me ‘I am the most honest person you will ever meet’. Being young and naive, who wouldn’t trust a preacher? Well, something didn’t seem right with this guy, and he -almost- scammed me on a property that had a lien he knew about but handily didn’t mention in conversation. My gut feelings and doubts served me well. I learned some ‘street smarts’ then, and many more over the years. I don’t like to have to be cynical but it can save your butt.
I’ve heard about these guys from JS Precision in Taiwan, scamming dealers, and not producing what they advertise and promise. Fortunately, I did not get scammed by these guys, but I know a good friend who did.
WHY have not anyone put a stop to these thieves?
And: BTW: Thanks for the advice, such “perfect timing”, I just had a customer from Louisiana Circumvent me on a small $25K deal, by contacting the shop owner after an inspection in Houston, Texas on an engine lathe. I understand, after the inspection (Tuesday this week), he immediately contacted the seller to negotiate the deal directly.