Recently my mission president, whose blog I read often, wrote about the business ethics dilemma. He has a very good blog for anyone who is interested in business, management, leadership, etc.
Click here to read it.
Here is the crux of what he wrote:
Is it wrong / dishonest / immoral / etc. to sell something for more than it’s worth? I know there are many who would say it’s worth whatever someone would pay for it. Therefore, you should get all you can. I know there are others who say that to consider yourself honest, you must seek a win-win situation, and not take undue advantage of anyone else. I have strong feelings on this one.
My wife and I talked about this for a while and we decided on an opinion. But first I want to share a story.
A few months ago, two friends of mine were on their way home from a day of snowboarding. When they stopped for gas, two men approached them in a white van, offering my friends a good deal on some home theater surround sound speakers. The men had apparently just finished a job in Park City, and when they had received the speaker shipment, the warehouse had accidentally sent an extra pair. They explained that the invoice only reflected the correct amount ordered, which was one pair, so they now wanted to sell them off at a good price. My friends (who are both salesmen) thought they would talk these two guys down in price and get some cheap speakers. The bidding started at $1200 and when all was said and done, my two friends walked off with the new speakers, having only paid $700, a snowboard, and two Park City lift tickets.
While driving home, and feeling proud of themselves, they decided to look up the speakers online to see how good of a deal they really got. They Googled the brand (which they had never heard of) and in the second search result, it said “White Van Scam.” They went on to read, in horror, a full detailed description of the very interaction they just had with these two men, and realized that they had just paid $700, a snowboard, and two park city lift tickets for a set of $200 speakers.
Clearly my friends felt that what these two men in the white van did was wrong. I agree. The reason it was wrong is due to one thing: lack of full disclosure. There was intentioned deceit, and the seller knew the buyer had not done his homework.
So that is the answer to your question: “Is it wrong/ dishonest/ immoral/ etc. to sell something for more than it’s worth?” Only if there is lack of full disclosure. A seller should fully disclose all information pertaining to the value of what’s being sold, being careful to not mislead the buyer by omitting information that directly effects value. The seller should disclose anything that could otherwise be falsely assumed, and be willing to disclose all information that is requested by the buyer. However, I think the buyer is responsible to do their homework so they know what questions to ask. If the seller offers full disclosure, and the buyer has done the required research and has received an answer to all questions, then the buyer is able to make an educated decision about whether the value of the item matches the seller’s asking price.
I think the worth of something is determined by each person. An item might be more valuable to one person than another, resulting in that person’s willingness to pay more for it. The key again, in my opinion, is having both parties clear about what is being purchased.
As a salesman, I sell my service at a fair price. Many times I give a discount. Sometimes I give a bigger discount than other times depending on how valuable my service is to a customer. I do not feel bad selling the same service to a customer at a higher price than to another when both customers are getting a good deal. I fully disclose the terms of the service so my customers are clear about what they are buying.
So there you have it. Disclosure is the key.
