Most cable and satellite television services offer shopping channels. Many of the channels are specialized: jewelry, furniture, cutlery, exercise machines, men's and women's clothing, lawn care. cosmetics, cooking equipment, toys and more and more and more.
How, I wondered, can shopping networks make a buck? Are there that many people out in TV land getting sucked into credit card purchases after a half-hour pitch? The answer is yes.
But more to the point, the spirit of the men who peddled snake oil from the back of covered wagons is alive, well and far more sophisticated.
I have a friend who graduated from one of the best MBA programs in the nation. He and a partner (graduate of the same school) recently got into the business of developing shopping shows for cable and satellite television. He's young, smart, hard-working and is making more money than even he thought was possible. He and his young family recently purchased a $3 million home in a California town where he counts movie stars among his neighbors.
He attributes his financial good fortune to television shopping shows -- or more precisely, to the "fine folks" (his sarcasm is undisguised) who watch the shows and buy the products.
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How does he do it? Well, he unapologetically says the formula is simple: "We sell junk to stupid people." Indeed, that maxim is nicely framed and hanging on his office wall.
Junk? Oh sure, he says. He identifies a market niche for some product -- a food chopper, for instance. A prototype is tested and then goes into mass production, usually offshore -- China, Korea, Thailand -- where workers are paid small pennies to make a gadget that will sell for big dollars.
If everything comes together -- and it has several times for my friend -- a half-hour show is produced and then sold to one of the many 24/7 shopping networks, all of which are hungry to find shows to fill the hours, day and night. That food chopper sells for several times the cost of development and manufacture, and everyone along the line makes money.
So, I asked, where do stupid people come in? Are you kidding, he says. Got to have 'em.
Without viewers making that 1-800 call, there are no sales. They have to buy the pitch: ("Do it now and get two -- that's right two -- amazing food choppers for the low, low price of one! And, if you act in the next five minutes, we'll throw in the amazing oven glove...."). And they call by the thousands, and the young businessmen who "sell junk to stupid people" buy $3 million homes in tony southern California suburbs.
I wondered: If the stuff they sell is junk, don't buyers object, send it back and demand a refund? Very few, he says. Rather, he depends on the very human tendency to avoid the embarrassment of having been duped.
No one wants to admit they were fooled, he says. No one wants to admit being stupid.
"But they are," says my young entrepreneurial friend, "so it's not all that hard to sell 'em junk."
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Zaleski can be reached at jzaleski@forumcomm.com or (701) 241-5521.
