BY AHMET DURSUN (POLS/III)
ahmet.dursun@ug.bilkent.edu.tr
What I Talk About When I Talk About Business
I spent the last three months working at a wholesale company. It was a midscale firm that imported kitchenware products and distributed them to local retailers; I was mostly responsible for sales. This was an opportunity to observe what happens in the “real world.”
The first lesson: entrepreneurship in the private sector is a tough craft. One invests a significant amount of one’s funds into a business, hoping that the investment will return as profit. In fact, the opposite is highly probable. For instance, bad checks happen to be a familiar phenomenon in business. Consequently, business owners can feel fortunate if they don’t take a financial bath, never mind make a profit! That is why the most popular expression I heard among the merchants I worked with was “the market is bad”—a red alert for possible fraud. This unfavorable market situation implies that one has to think strategically to survive in that dog-eat-dog world.
Secondly, I noticed that buyers’ decision-making processes might conflict with the teachings of some economic theories. The homo economicus that we know of is a rational persona who makes decisions based on his/her interests. But, as behavioral economics suggests, there are cases where one does not know one’s true interests. This causes people to make decisions that are at odds with their interests, as a result violating the standards for a rational economic agent. I observed, for example, that some retailers would buy an item from Wholesale Store A at a price 10 percent above that of the actual seller, Wholesale Store B. Note that Store A buys that very item from Store B, and both sell it to retailers. What’s interesting is that A and B are next to each other. Despite that fact, there are people who choose to buy from A, thereby paying more. It is crystal clear that paying more for the same item is not in one’s interests. Probably the buyer was not aware of the fact that this item was available at a lower price just two meters away. As this action indicates, human beings might not be as rational in their economic behavior as is assumed.
Finally, I observed that a new trend among retailers is the use of social media. Apps such as Instagram are functional as sale tools. Since the pay-at-the-door method is available, it is convenient for people to buy items using Instagram accounts. This makes retail firms very keen to sell their products via social media. Further, since every product is not available in every market, some sellers see this as an opportunity to go beyond their own market. For example, some merchants sell large amounts of Turkish-made goods to Middle Eastern countries via social media.
Additionally, social media are useful not only for sales but also for advertising. One of the problems for small businesses has been the lack of opportunity to promote themselves. If a customer does not know that a product she is looking for is available in a certain shop, the shop in question loses that potential customer. Some enterprising small business owners have found the solution with the help of social media. For example, they add pictures of their products on the Instagram accounts they set up for their shops. Then they add large numbers of people to their accounts, in order to let potential customers know that they have the high-end or specialty products they are looking for. Thus, they can advertise without incurring the high costs that would otherwise be necessary.
Using the limited tools one may have at hand in order to achieve success in the private sector is a relatively difficult task. And it is likely that this is the case in other areas of working life as well. Nonetheless, the potential to act according to a systematic method, be an innovator and thereby successfully reach a goal is, it seems to me, in one’s own hands.