“Buy low, sell high” — this fundamental principle of commerce remains unchanged throughout history. But around 2,300 years ago during China’s Warring States period, one man took this concept far beyond basic trading to deploy sophisticated market manipulation techniques that made him fabulously wealthy.
His name was Lü Buwei (呂不韋, Lǚ Bù Wéi).
He wasn’t just a merchant. He was a pioneer of “scarcity marketing” — a strategy still used by the diamond industry today — and ultimately rose to become Prime Minister of the State of Qin. His story offers remarkable insights into investment strategy and market dominance that remain relevant in modern business.
This article explores Lü Buwei’s investment strategies and market control methods, drawing parallels to contemporary business practices that might surprise you.
Lü Buwei’s Origins: Building Wealth Through Price Arbitrage
The Grain Trade Between Wei and Zhao
Lü Buwei’s career began with an elegantly simple strategy.
He purchased sorghum cheaply in the State of Wei and transported it to the State of Zhao, where demand was high, selling it at premium prices. This was classic price arbitrage — what we’d call “reselling” or “flipping” in modern terms.
War also created business opportunities. When conflicts prevented food production in certain regions, he could sell grain at inflated prices to desperate populations.
Contrarian Investing Leads to Major Success
Lü Buwei’s true genius lay in his willingness to take calculated risks.
When sorghum prices crashed in Wei and most merchants fled the market, he did the opposite — buying up massive quantities at rock-bottom prices.
Later, when pest damage destroyed crops in other regions and grain shortages struck, he sold his stockpiled sorghum at huge profits, earning enormous returns.
Market disruptions and price distortions create the greatest profit opportunities.
This principle applies perfectly to modern stock markets. “Be greedy when others are fearful” — the investment philosophy Warren Buffett practices today was embodied by Lü Buwei over 2,000 years ago.
Pearl Business Market Dominance: The Same Strategy as Modern Diamonds
Lü Buwei’s commercial brilliance truly shone in the pearl business.
Here he moved beyond simple reselling to deploy sophisticated strategies that allowed him to dominate entire markets. His pearl strategy represents an early form of scarcity marketing and brand strategy still used today.
Lü Buwei’s Three-Pronged Pearl Strategy
1. Control the Supply Source
Purchase pearls in bulk at production sites to control the market’s lifeline — the supply chain itself.
2. Create Artificial Scarcity
Enhance pearl value not just through the product itself, but through packaging and promotion.
Position pearls as “rare treasures” and artificially manufacture scarcity. By creating a sense of shortage in the market, demand naturally intensifies.
3. Complete Control of Distribution Pace
Because he controlled supply to the market, he could manipulate prices at will. He achieved complete pricing power and market monopoly.
The Original “Scarcity Marketing” Still Used Today
Does this strategy sound familiar?
It’s exactly the same structure as the modern diamond business.
De Beers completely controls diamond supply, creates the perception that “diamonds are rare and valuable,” and stimulates demand. Yet because they control actual supply, they maintain pricing power — this is Lü Buwei’s pearl strategy in action.
Complete control over both price and quantity represents the ultimate business victory. And he achieved this 2,300 years ago.
Lü Buwei’s Next Stage: Entering Politics
After amassing tremendous wealth through commerce, Lü Buwei advanced to his next stage — the political arena.
He supported 3,000 retainers (a private army of advisors and specialists).
This wasn’t mere vanity or charity. Lü Buwei viewed talented people as “rare commodities” and applied the same strategy he used in the pearl business.
His Retainer Network: Investing in Human Capital
- Early Acquisition (Buying): Identify talented people as “scarce resources” and recruit them before they become expensive
- Value Enhancement (Packaging): Increase their market value through training and promotion
- Network Building (Marketing): Form extensive connections to gain political influence
- Leveraging Human Capital (Branding): Maximize their use as a power base
“Rare Goods Worth Hoarding” — High Risk, High Return
This approach achieved its most dramatic success with his investment in Yiren (later King Zhuangxiang of Qin).
True to the saying “qí huò kě jū” (rare goods are worth hoarding), his investment in a promising individual ultimately elevated Lü Buwei to Prime Minister of Qin.
The formula was simple:
- Buy low (recruit Yiren when undervalued)
- Add value through various support (packaging)
- Leverage his retainer network (marketing)
- Achieve maximum returns
From merchant to supreme power in a major state — an unprecedented career transformation.
Lü Buwei’s Investment Philosophy: 5 Lessons for Today
The essence of Lü Buwei’s success lies in a consistent investment philosophy that bridged commerce and politics.
Two Core Principles
1. “Buy Low, Sell High” — Capital Management
- The discerning eye to identify gaps between value and price
- The decisiveness to invest boldly in opportunities without fear
2. “Hoard Rare Goods” — Speculative Thinking
- Market dominance through creating and manipulating scarcity
- Strategic vision for long-term value appreciation
5 Lessons for Modern Business
① Never Miss Price Differentials Market distortions and temporary disruptions create the greatest profit opportunities.
② Control the Supply Chain Controlling supply sources grants you pricing power.
③ Create Scarcity “Rarity” and “limited availability” multiply value exponentially.
④ Talent is the Best Investment Early investment in capable people yields the highest returns.
⑤ Maintain Long-Term Vision Look beyond immediate profits to future value appreciation.
Conclusion: Why 2,000-Year-Old Market Manipulation Still Works Today
Lü Buwei’s investment strategies possess universal applicability — they work for goods, currency, human capital, and political positions alike.
“Scarcity marketing,” “supply management,” “human capital investment” — these concepts fill modern business books.
Human psychology and market principles remain unchanged from 2,300 years ago to today.
The ancient merchant-turned-statesman’s playbook continues to offer profound insights for anyone seeking to understand markets, power, and the art of strategic investment in any era.
Lü Buwei’s story demonstrates that while technologies change, fundamental principles of value creation, market psychology, and strategic positioning remain constant across millennia. His legacy lives on not just in Chinese history, but in every boardroom where scarcity drives desire and supply controls price.