Oriental rugs aren't souvlaki. At prices from about $1,000 to more than $100,000, they have never been a mass market item and they don't appeal to impulse buyers.

But in the Washington area, vendors of oriental rugs have proliferated as suddenly as snack-food carts, bringing fierce competition and mass-merchandising techniques to a once-arcane business.

Discounts, sales, credit terms, public auctions, newspaper advertising and even leaflets handed out on downtown streets have overtaken a business once characterized by patient haggling between wealthy customers and long-established dealers.

A decade ago there were no more than six oriental rug showrooms in the Washington area. Now there are about 50, which on a per capita basis makes this the oriental rug capital of the western world.

The Washington area is apparently the only city in the country where there are so many oriental rug dealers they are listed separately from other carpet stores in the Yellow Pages. New York has more dealers, but many of them are wholesalers. Los Angeles has 17. The Yellow Pages in Kansas City lists three.

"How many rugs can Washington people buy?" asked Ray Ayoub, whose father, Hanna, founded a dealership on Wisconsin Avenue 54 years ago. "A rug isn't something you buy every Friday. I don't think the little guys can all last."

The proliferation of newcomers, and their adoption of modern marketing techniques, are putting pressure on some of the old-line dealers.

"We're giving 20 percent to 50 percent off the usual retail price on a rug. We can't go much below that," said Andre Peltekian, son-in-law of Neshan G. Hintlian, owner of a long-established shop in Cleveland Park. "The market is very sluggish. I've got good prices but people aren't buying. I don't know how these others do it."

He said refugees from the Iranian revolution who "don't know anything about rugs" are getting into the carpet trade because "they were looking for a place to put their money. They're ruining the business."

The newest showroom in the area, Bolourian Oriental Rugs, near Thomas Circle downtown, is just the kind of operation Peltekian was complaining about.

Bolourian is papering downtown Washington with leaflets offering "30 percent to 50 percent off" in a "grand opening sale." The owner of the store, Gholamhossein Bolourian, cheerfully admits that he got into the rug business because he had nothing else to do after the revolution that toppled the Shah's government in 1979.

Bolourian, who has the old imperial Iranian flag and silhouette portraits of the late shah and the empress on his ornate desk, was a lawyer in Tehran who worked in the Justice Ministry and--like so many of the shah's bureaucrats--made money running a trading company on the side.

In Iran, he said through an interpreter, selling rugs was "not a prestigious position for educated people. But here, I don't have any job." He said he "lost everything" in the revolution, but he has managed to stock his showroom in a new building with carpets he said are worth more than $2 million.

What baffles the established dealers about new entrants like Bolourian is that an oriental rug showroom requires a very large capital investment and heavy operating costs, and it may take years to develop any return. In addition to the cost of the carpets, in a business where wholesalers demand cash, the dealer must buy insurance on his stock, long before income covers the premiums.

Ayoub said his insurance premiums exceed $1,000 a month, and cash flow is unpredictable. "A rug may stay in this store five years before somebody buys it," he said. "We are making our payroll every month, but that's because we own our building, thank God. I don't know how people do it who have to pay rent."

Transformation of a once-sedate business here is a good example of the unique sensitivity of Washington's business ecology to political events in remote corners of the world.

Like the Vietnamese general stores in Arlington and the Ethiopian restaurants in Adams Morgan, many of the new oriental rug outlets are a byproduct of revolution--in this case, Iran's.

But the market here also has been influenced by events in Afghanistan and by relations between the United States and China.

Not only are there more and more dealers, but a profusion of sources for the carpets themselves has changed the entire product line, bringing in lower cost carpets that still fit the definition of a handmade oriental and sending prices for the best Iranian pieces well over $100,000.

According to several dealers, the Communist government of Afghanistan has increased the export of that country's rugs in an effort to earn foreign exchange, and a cut in customs duties on rugs from China, from 40 percent to 5 percent, brought a flood of Chinese carpets into an already saturated market.

In an attempt to stop people such as Bolourian from exporting their capital by converting dollars into carpets and selling them outside the country, the government of the Iranian mullahs imposed restrictions on the export of rugs by anyone who could not prove he was in the business before the revolution.

This has cut the supply of high-quality Persian rugs, which was dwindling already before the revolution as village weavers abandoned their looms for city factories. But dealers here say some high quality carpets are being smuggled out of Iran.

"There are two ways to get rugs out of Iran," said Mohammad Mirsaidi, an Iranian who is general manager of Fame Oriental Rugs Inc., near Tenley Circle. "Legally, you have to do it at the official rate of exchange, which raises the cost five to seven times above their real value. The best way is smuggling."

Bolourian, who loudly proclaims his contempt for the revolutionary government, says the ruling mullahs are doing the smuggling, trading carpets for dollars in the bazaars on the Arab side of the Persian gulf.

While a shortage of the highest quality rugs from Iran has driven up the price of the best Persian pieces, the dealers say, the abundance of rugs from Afghanistan, China, Pakistan, India and Romania has brought down the overall price range of the colorful, hand-made carpets.

Dealers agree that Iranian rugs are still the best--"they have the best wool, the best color combinations and the best workmanship," Mirsaidi said--but they say the Pakistani, Indian and Chinese competition is good enough and cheap enough to bring them within reach of more consumers.

Beni Isfahany, who runs Pasargad Carpets Inc., near Dupont Circle, concurred with others who said the Washington area appears to have a large concentration of consumers who have worked or traveled in the countries of Asia and the Middle East where oriental carpets are made and used, acquiring a familiarity with them that makes this a uniquely receptive market.

According to Isfahany, it is this broadening of the market, in addition to the proliferation of showrooms, that has caused the dealers to adopt new techniques of discounting and advertising.

"American people like sales," said Isfahany, an Iranian whose relatives are still making carpets in their family business in Isfahan. "They like to think they are getting a bargain. You take a rug we used to sell for $2,000 when we opened here in 1978, that was a fixed price, we would not negotiate. But we saw our competition price the same rug at $3,000, stage a sale, and cut it to $2,300. It was still more expensive than ours, but the customer thought it was a bargain." Now Pasargad, too, advertises that its merchandise is on sale.

Ray Ayoub said that "in this competitive market somebody is always discounting. We used to have fixed prices, and no bargaining. The only discounts were two sales a year. Now people come and they want to match a price they got somewhere else. We have to do it."

Oriental rugs are notoriously difficult to comparison-shop. Differences of quality and workmanship are often barely visible to the untrained eye, and many pieces, especially the best Persians, are unique. Dealers interviewed last week, however, said more and more buyers are making their selection on the basis of price, without much attention to nuances of quality.

"It's hard to sell a rug now," Ayoub said. "People want price, they shop around. You take a 5-foot by 9-foot Ardabil, it might be $2,500 here and $1,500 somewhere else. But is it really the same rug? They'll find out in five years," he said, referring to the fact that good carpets improve in appearance with the passage of time, while inferior ones begin to wear out.

He and other dealers also complained that they are losing sales to department stores, such as the Hecht Co. and Bloomingdale's, which have established large oriental divisions.

Rugs sold in department stores usually cost more, the independent dealers say, but customers are attracted by their extensive advertising and, according to Ayoub, some buyers prefer department stores because they are reluctant to deal with what he described as "dark-haired men with strange names in shops like this."

Not surprisingly, dealers here say the intense competition among them, combined with the influx of good quality, lower cost rugs from Pakistan, India and China, makes Washington a good place to buy.

"Washington is the best place to buy. People are coming from all over," said Mirsaidi at Fame Oriental Rugs. He said he found a duplicate of one of his carpets selling for twice as much at a Virginia Beach store.

But these claims brought a laugh from John Davidian, a dealer in Cleveland who is founder and past president of the Oriental Rug Retailers Assocation of America.

"If you were to scout the market in more provincial cities, such as Cleveland, prices are lower," he said. "We have to scratch more, we have fewer people to deal with. Item for item, quality for quality, prices in Cleveland are lower."