If your customers buy two rooms from you, can you provide flooring for the rest of the house free and make a profit? On a personal note, do you truly believe you can buy one suit at Men’s Warehouse and get three suits free? I hope not, because you would be just as ignorant and greedy as many of our consumers.

Several people recommended the movie, “The Wolf of Wall Street.” My wife rented it and if it weren’t for some incredible sales lessons, I thought the movie was terrible. Supposedly, the film was based on a true story. I suppose there are people this crude and crass in the world, but I’ve never met them (maybe I’ve been sheltered for 75 years).

If it were not for the inclusion of a sales trainer telling a recruit to “sell me this pen,” I wouldn’t have given it as much as my rating of 2.5 out of 10. I have never viewed a movie so full of debauchery, treachery, greed and the rest of the seven deadly sins. People not in the stock market would be led to believe every brokerage firm is like this. Almost everyone I know is in the market and they all have experienced decent returns throughout the years.

What ties this to the flooring industry is the brokers portrayed in the film. While carrying on friendly conversations with their clients, they were making obscene and humiliating gestures to them behind the scenes during the sale. My mind switched over to the sales and marketing guys at Lumber liquidators, Empire Today, Jos A. Bank and retailers who promise “this weekend we are offering a never before deal never to be offered again when the sale ends this Sunday.”

To a lesser extent, the free install at the big boxes is similar. They also laugh at consumers who they see as so stupid and greedy as to believe their pitch and behave much as the brokers in the film. But they also laugh at us independent flooring retailers who can’t compete while selling at lower prices.

While the brokers pitch penny stocks at 50% commission that are guaranteed to go to $40 and, “Don’t be left behind as so many others have when I made a similar offer. What’s that? You’ll try $5,000 this time? Why not make it ten?” The difference is, these brokers are actually policed and we even see them go to jail. The film relates that even high-pressure selling is a crime.

Early on in my career, the Federal Trade Commission (FTC) would police flooring ads and if a big retailer had a sale, it would have to prove it sold the product at the regular price or be fined. Our floor covering wolves of today somehow undergo no such scrutiny. Don’t discount my assessment; these flooring retailers sell up to 50% of our flooring volume.

What would the regular price of “buy two rooms and get the rest of the house free” be? Have you even tried to figure it out?

First, unlike most small retailers, flooring wolves make money. They rarely sell for less than 50 points (that’s a 2x mark). Take an average 2,000-sq.-ft. home, and the customer selects an item that retails for $2 (cost $1). At their normal mark, the price would be $4,000 material only. However, they are going to give you 1,000 square feet for free. This means that in order to make their minimum 50 points they are going to charge the customer the same $4,000 ($2 x 2,000), but 1,000 feet is free. So they tell the customer the normal price for the carpet would be $4 a square foot—a big fat lie.

But wait, that is not all. The customer has to pay separately for padding and install and it will be far more than the $1 you charge. Then they have to add more fat in the price because if the customer rejects the offer, the salesperson has to make at least four more attempts to close, offering a lower price each time, with calls to a “manager” for “approval” before they can leave.

In reality they charge upwards of $7 a foot for a job while the average retailer would ask less than $3. The lesson here is that your customers pay these outrageous prices while you’re afraid to get a 2x mark. All of this makes it impossible for customers to compare price per square foot, so forget about it. Unless you are skilled enough to educate your customers the “out the door price” is what counts, you lose.

Free install at the big boxes is a scam as well. It only applies to “select” items. Consumers have to buy a pad where labor costs “plus” are built-in. Additionally, they charge for installation materials and supplies normally included in the job. Many locations allow installers to measure where they are able to add yardage to make the job easier and pad the low install prices the boxes pay them.

Moreover, the boxes aren’t stupid. They charge for the measure—not that it costs them anything—but they have the knowledge that once customers part with money, no matter how little, they rarely back out. It’s a psychological ploy. We should be so smart.

So now what do we do about this? Armed with this knowledge and wanting to educate our customer, we try to explain the situation, which gets complicated. It usually comes off, as I’ve written before, as sour grapes. The way to defeat these dishonest tactics is to become skillful in attracting people to your store and, once there, never let them “walk.” You do this by developing intimate relationships so they will trust you, which is what I teach. No amount of traditional skills will help.

In future columns, methods for getting consumers in the store and keeping them there will be covered. It will be worth it to keep these columns.