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How To Be An Antique Dealer Part 5
Avoiding Eleven Common Mistakes Made By Antiques Dealers
This is part five of a series on how to be an antiques dealer. Part one explained the best way to start an antiques business. Part two explained how to act at antiques shows. Part three covers 7 habits of succesful antiques dealers.Part four examined successful dealer attitudes. This article talks about mistakes that are made when you are a collector in addition to being a dealer.
Collector or Dealer?
Many of us are collectors in addition to being
dealers. We buy things for our collections, we upgrade items,
and we even buy items strictly for resale.
This can cause problems.
In this article, we will
discuss some of the most common problems faced by collector
dealers, and how to avoid them.
Even if you are not a collector, you might be making some of
these mistakes. This is a fairly short issue so take a few
minutes to skim it and see if it's relevant.
Eleven Common Ways Collectors Damage Their Collectibles Businesses.
As you read over these common errors try to think about
examples familiar to you. Maybe something you've done in the
past, or seen someone else do. You'll get more benefit if you
can identify with these mistakes, and relate them to your
buying and selling.
- Keeping everything. This "collection creep" creates cash
flow problems. This is normally due to poorly defined
collecting. All collector/dealers have this problem at some
time or another. I solve it by giving my items priority. When
I need some cash, I liquidate items with low priority.
- Spending cash at shows. This also creates cash flow
problems. I have done this too many times to count. I attend a
big show and spend a few days looking at something I'd really
like to have. Then I blow my entire receipts on it, and have
to start building my cash reserves back up.
With eBay and Paypal this is easy too. I see the money in the
Paypal account and spend it on items for my collection. The
only way to avoid this problem is to set a reserve target and
then exercise willpower.
- Buying emotionally. This increases costs, and lowers
profits. I have done this too many times to count. I go out
and see a bunch of trains with one item I want for my
collection. Then I get so excited at finding something for the
collection, I end up paying more than I had to.
For the past
year or so, I have been stepping back and taking a few slow
breaths before jumping in. It's important to remember these
were mass produced items and you see them again. This is discussed in my interview on Negotiating while buying antiques and collectibles.
- Rejecting items due to non economic considerations causes
lost profits. I don't have this problem, but it's quite
common. I hear people say, "I would be embarrassed to try to
sell that piece of junk." Last month I bought some toy trucks
that were filled with mud decades ago. I hosed them off and
sold them in all their rusted, dented glory.
- Buying items because they are impressive rather than profitable
creates cash flow problems. This is usually a problem with
more established collectors than with beginning dealers. The
primary reason for buying items is profit. All purchases
should be made based solely on the expected return and
estimated time to sale.
- Forgetting your profit is made when an item is purchased,
not when it is sold increases your selling costs and can also
create cash flow problems. I've harped on this in the past,
but it fits here too. I've seen many eBay sellers spend large
amounts on reserve auction fees trying to get a few dollars
more.
If you focus on buying items with a large expected profit,
some will sell for more than expected while others sell for
less. Don't get caught up trying to meet your expectations.
Instead average your sales. If you are like me you'll probably
see you're getting more than you expected overall.
- Focusing on inventory rather than cash flow also creates
cash flow problems. Many dealers with stores or mall spaces
fall into this trap. I call it the inventory trap. Remember,
while your profit is made when you buy something, you have to
sell to get your money out.
- Over-specialization causes lost profits. This is similar to
number four, but more specific. I see people who collect
Lionel trains refusing to buy American Flyer trains. The
rational for this is "I don't know what they are worth."
Chances are the seller doesn't either. Rather than walking
away from something, make the owner an absurdly low offer.
You'll be surprised how many times you can make the deal.
- Not researching items causes lost profits. I talk about
eBay arbitrage frequently, (that's buying items for resale on
eBay) and failure to research items is probably the number one
reason for these lost profits. It's not hard to find the best
eBay category for an item. If you come across something you
are unfamiliar with, spend a few minutes learning about it, or
consult someone. I once bought a 1500 car for my collection at
a large train show from a respected dealer for $115. Any quality price
guide would have told him he had something special if he had
bothered to look in it.
- Considering your collecting interests to be a good
representation of other collectors causes lost profits.
Collectors are different. What excites one person might bore
you. I once saw a collector buy an item from a man who had a
wanted ad for the item next to it on is table. The ad offered
to pay $500 for the item and the seller said that's insane and
after laughing about it sold the car for $30. (If I had gotten
there first I would have paid $500 without hesitation.)
I have also seen people do restorations using extremely
desirable color variations that still would have brought a
significant premium even in poor condition with the rational
that no one would want something that beat up. (FYI - restored
toys are generally worth no more than 60% of the value of the
most common version with excellent original paint.)
- Failing to take responsibility for your mistakes causes
cash flow problems. I frequently see dealers trying to sell
items for outrageous prices. Note the word trying. When asked
they usually reply with something like that's what I paid for
it. When you overpay for something, take your loss, and
consider it a learning experience.
Did you see anything you do?
If so, don't feel bad. Remember, I said these were common
mistakes. I have done almost all of these myself.
After all, It's only by being honest with myself and being
willing to learn from my mistakes that I've increased my
skills.
Knowing you are making a mistake is the first step in moving
past it.
Even after I realized I was buying things emotionally, I
continued to do it. I'd drive away with my purchases and a big
smile on my face, then realize I had gotten excited and
over paid again.
After a while I started realizing I was getting emotional when
I blurted out offers much higher than needed.
Later, I got to the point where I can usually - that means I
can still do better - calm down and make a better deal.
In The Collector Buying Strategies package you'll learn 83 ways to
find and buy antiques and collectibles. While the package
explains the strategies I use in my toy train business, most
of the strategies will work for any type of collectible.
If you've been relying on garage sales and are having
problems due to the weather finding items, the package will
help you find and buy antiques and collectibles right out of
people's homes.
Articles in this series on Becoming An Antiques Dealer:
Additional Articles about Antiques Dealing:
PS. Don't get me wrong about the emotional buying. Showing
people you appreciate the items they offer you is a great way
to close the deal. What I was doing wrong is basing my buying
decisions on my excitement rather than what the seller was
willing to take.
PPS. One new mistake I see too often. . . Publicly gloating about purchases.for example, I recently saw an antiques dealer buy something at a show for about 1/10th of it's value. He walked away laughing at the seller. The seller will never sell him anything again. I buy stuff for resale at antiques shows, and no one ever knows what I do with the items I buy.
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