Serenissima: the culture of mediation

Bureaucratism, high taxation and high-rocketing spendings on the primitive needs have made it very expensive to produce in Italy. The benefit, still, is relatively close position to a number of countries in which wages are much lower, and the labor force exerts far less pressure on enterprises. In Italy, there is a wonderful prospect for exporting high-margin Made in Italy products and importing low-margin products, whose production in the country would be impossible. However, reaching the final consumer or a direct store in Veneto and Lombardy is very difficult because of the unique mediation culture in the world.

             So, since it is expensive to produce, jobs in the manufacturing sector are shrinking. However, there is no redistribution of labor to the services sector, as, for example, in the USA. A typical Veneto (a resident of the province of Veneto) is the heir of the old trading nation, and not a system corporate employee who builds his career in the light of changing market circumstances. For classical Veneto – trade, and especially international trade – have always been the main source of income. The risk, negotiations, buying and selling, exchange spur the excitement of the typical Veneto. Like a proof, here in almost every bar, cafe, tobacco shop there is a plenty of various slot machines that promise a quick profit, and at the cashier there is an opportunity to buy lottery tickets and quickly win a million euros. A typical Veneto comes to the bar in the middle of the day to have an aperitif and, like a part of the work, tries its 10 euros for luck in the favorite slot machine.

Entrance to the room of slot machines. Verona

        The desire to make money without effort and preferably to earn such money on an ongoing basis in the time of the Doges created the foundations, and in modern times cemented the culture of agency mediation. Having lost or left the previous job due to low wages, veneto is likely to become an international trader of everything in the world – from corn and olive oil to jewelry and real estate. The main rule is that the deal must be concluded quickly, the shipment should start yesterday, and the batch of something should be measured in thousands of tons per month. Promoting the same goods from the same supplier, the trader passes from the trader to the trader, from the intermediary to the intermediary – under the slogan “non essere scavalcato” (“non essere scavalcato”) – “not to be bypassed”).

                 And although the desire to bypass each other is extremely large and often determines whether the whole chain will work or not, the mediation code keeps this desire in check. As explained by an Italian friend of mine, the reason for the strength of mediation culture is the need to “feed everyone”. If the supplier has a direct relationship with the store – the consumer can win because of the absence of intermediaries. The culture of mediation allows you to “bite off” a portion of the pie, albeit a little, to a larger number of network participants. It is a kind of private mafia. If you bypass a colleague today, others tomorrow will not have affairs with you, as with an unreliable person. “Tutti devono guadagnare” ([tutti devono guadan’are] – “everyone should earn”). “You can not give a victory to the buyer, you do not give a damn about that,” my friend sums up.

Exhibitions in Veneto – general gathering of intermediaries

        Since everyone sells everything, the network of mediation overlaps on family ties. And, already often you can hear – it’s my “fratello” (“fratello” / brother), “cuggino” (“cudgino”), “genero” (“genero”), who deals with this product – go to him. In other words, bypassing the son-in-law and going out to a direct seller is a shameful act for the family. This overlap strengthens the culture of mediation even deeper.

               The most interesting thing about this culture is that the intermediary does not perform almost any function. His goal is to be the first to agree to associate the two counterparties and to earn the right to receive a life-long commission in this chain. The further work of the mediator should be reduced to several phone calls between morning espresso and a lunch aperitif at a local bar. The mediator in Italy, most often, does not have or will not agree to use its own working capital to manage the mistrust between the foreign supplier and the local buyer. He just knows two phone numbers from different trading banks. Such an intermediary scheme, according to one of my colleagues, should provide a balance in the market: 70% of the price is received by the producer, and the chain of intermediaries should get 30% (however, 30% is net earnings or seller’s margin, whereas 70% of the price includes all expenses of the supplier , including commercial ones).   

Veneto intermediaries in the office

   As time pass by, the culture of mediation turns an already experienced veneto into a trader based on his own connections. His asset is a phone book and a history of successful trading operations. Its motto is never trade own assets, commercial ties are a valuable legacy.

        A survival lesson in the mediation culture of Veneto and Lombardy.

It is hard to change the culture created by centuries, but it is alien to numerous foreign businessmen. Natives of India and China do not pay any attention to it, implementing their own networks and organizing their own points of sale “all for 5 euros.” And they act absolutely justified. A long chain of intermediaries in Veneto and Lombardy will destroy your trade. Each of the intermediaries will argue that you will never figure out how to get to a direct customer or direct store, that without a guide you can not cope. It is nothing more than a blowing up of an asset called a “network”, which is actually a soap bubble. Any store or client will be happy with the first opportunity to talk with you without intermediaries, because, like all Italians – they want to be the first.

Turolev Glib