The Risks of Investing in Oriental Rugs – Overpayment

(The following is an edited excerpt from Warp, Weft & Weave: A Life Collecting and Investing in Handmade Oriental Rugs by Sam Ramazani)

Something I see often, especially in new clients who are just getting “into” rugs, is concern over what I like to call the “risks of investing.” These risks can be many and daunting. But with a little education and knowledge, you can enormously reduce this risk. Let’s take a look.

Overpayment Risk

Trying to mitigate overpayment risk is extremely difficult. The Oriental Rug market is so opaque that you can and likely will get taken, quite frankly, here or abroad. In all my years of being in this business I have heard clients say they intend to travel overseas to score great bargains. I haven’t had but one client in 40 years successfully travel abroad and negotiate a bargain on an exceptional rug. This is a pervasive and enduring misconception that traveling overseas reduces risk. More often, trying to purchase rugs this way increases it. You might think that traveling to a country where handmade rugs are indigenously produced, and the weavers desire American dollars, will be to your financial advantage. But I can say unequivocally you would be wrong.

The rug trade is an ancient trade

Understand that the rug trade is literally over a thousand years old and Westerners have been traveling to these lands in an attempt to buy beautiful rugs on the cheap for just as long. Keep this in mind. It’s an ancient industry as old as the city walls. A crafted network. From the taxi you take from the airport or train station to the hotel and to the bizarre. You’re not the first, not by a long shot. This is not to impugn the reputation of these dealers, taximen, hoteliers and tour guides. They just know what the market will bear and they know Westerners are lambs to the craft of negotiating. Knowledge of the rug market, how rugs are distressed or made to look antique, how to negotiate, and the dealer markup is their purview, not yours. Their trade is not rugs – it is parting Westerners from their dollars, euros and pounds. Think of it as a great game and do not be discouraged or angry, it simply is. I don’t say this to dissuade you from traveling to rug producing countries. Please do and with great joy. Make memories you will cherish for the rest of your days. Visit the bazaars. But rather than trying to buy a rug at discount, buy something as a keepsake. A reminder of that wonderful trip you took with the love of your life.

It’s not hopeless!

Now I’ve been telling you that you must start purchasing rugs to really understand what you’re doing and yet you shouldn’t go to rug producing countries in search of rugs – well then, what are you supposed to do? How on earth will you be able to create a collection?

This is precisely why you need a trusted merchant/dealer to work with. Of course it will seem like I’m recommending this for my own benefit, but ultimately, it’s for the customer’s benefit. A buyer of Oriental rugs needs someone who can help navigate this market. When you find a great dealer – one who listens to what you are looking for, helps you select based on your tastes, pays attention to what you like, who works with you and respects your budget, and who tries to educate you about your purchases – you will be able to create a beautiful, and valuable, collection.

Value is often in the eye of the beholder

Also, know that if you love a piece and it is a joy to have in your home and life, you have found real value. This itself transcends money in many ways. Our happiness and joy is very difficult to put a price on, and I would say paying full retail for a rug you desire and will have for generations is not risk, it’s a good investment, regardless of whether or not it’s a “bargain.”

Sam Ramazani is an Oriental carpet educator, appraiser, broker, and skilled repair craftsman. With his daughter Sara, he owns Sara’s Oriental Rugs in Louisville, KY, providing beautiful handmade rugs, as well as expert rug cleaning and repair.


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