How To Be An Antique DealerThis week I have a question from a reader who wants to become an antique dealer. My answer explains the best way to start an antiques or collectibles business.
Hi Terry, My wife blindsided me today saying she wants to start her own antique business, and wants to run out and spend $400 a month to rent a little space at an antique mall. She loves antiques, and collecting things like old timey alarm clocks, etc. . . and realy wants to become an antiques dealer. She is smart, and has huge passion, but I think a much better strategy would be to specialize in small antiques (like alarm clocks) that she wouldn't have to rent space for initially, and would lend itself much easier to a worldwide audience via ebay, twitter, etc. Do you have any products/services that would be comprehensive enough to help her stack the deck to make the odds of success higher? What would you suggest? Thanks, This is a great question. First of all Patrick is correct about specializing. Specializing in a specific type of collectible makes everything easier. It's easier to advertise for specific antiques and collectibles. I run ads looking for toy trains. My students run ads for comic books, coin operated vending machines, children's books, dolls, dishes and hundreds of other items. These ads are always more effective than ads for general antiques or collectibles. One of the reasons for this is people like to deal with knowledgeable collectors. They think collectors will pay more. Maybe dealers who specialize do pay more? I bought a bunch of real railroad signals recently. The only other serious offer the woman had was from a scrap dealer who offered her 15 cents a pound! I willingly paid 5 times the scrap price, and I'll make a good profit after I get rid of the items I don't want. Here's another reason dealers should specialize in a specific type of antique or collectible. . . I did a yard sale almost 2 years ago. The majority of the shoppers seemed to be looking for anything they could sell for a profit. None of them said this, but I got the feeling they were asking, I know that line doesn't work as good as, "Do you have any "widgets?" Another reason successful antiques dealers specialize in a specific collectible is there are usually pieces that bring a large premium. The average dealer doesn't know about these pieces meaning we can buy from other dealers and make a good profit. Twice in the past year I've purchased really rare items from dealers for the price of their common versions. I kept both pieces for my collection, but could have quickly realized 5-10 times the amount I paid by reselling them. Also, when we specialize, networking becomes easier. All the antique dealers I know locally are aware of my interest in toy trains. I get lots of referrals, and lots of calls offering me items. But remember, dealing in a specific antique or collectibles category doesn't mean we walk past other items we can turn for a quick profit. While out looking at trains, I've bought everything from guns to books to bicycles. Let me make an important point here. When I buy based on my specialized knowledge, I'm buying money at a discount. I know what the items I bought yesterday will sell for, and have a good idea how long it will take to sell them. The woman I bought the railroad signals from also had an old John Deere bicycle. I don't know if it's worth much, but for $10, I'd take a risk. She wanted a hundred, and I passed figuring I'd do some research and go back and get it if it was worth buying. The truth is when I buy items I don't know about, I'm gambling. I'm willing to take a small risk, but only with the awareness of the risk. This is exactly what antiques dealers who don't specialize do. They gamble. They have houses and booths in antique malls filled with the gambles that didn't pay off. When you ask about their antiques businesses, they'll tell you about the deals they did with large profits, but not about their overpaid "inventory." Think about how much money these dealers are wasting. They'd make a lot more if they only did the deals with big margins. Now, I am sure I frequently walk away from profitable collectibles. But, I doubt the lost profits are nowhere near the amount I'd waste if I bought every antique offered to me based on whims. We specialize and then move into larger and larger circles of related items. I started dealing only toy trains. Later I started also buying old tin toys and Erector sets. Today I buy a wide variety of collectibles, but I still specialize in the trains. Successful antiques dealers learn as we go without gambling large sums. Gamble too many times and lose, and you'll become a former antiques dealer. Recently, a woman gave me an old cast iron handcart. I doubt it's worth anything, but it did come in handy for loading up my purchases. I almost put it back when I finished loading up, but decided I'd take it since she offered it, and see if it had any value. There's no downside to taking something offered for free as long as I'm willing to throw it out if it has no value.
Enough about specialization. . .
More on Becoming An Antiques DealerPart of Patrick's question is about the effectiveness of antique malls versus selling online. I go to antique malls frequently as a shopper. I've also tested renting space on 3 different occasions. The trains and toys don't sell well in malls. Train shows and eBay are more effective. I won't try it again. A few years ago, I filled a display case in an antique mall with fine china, Fiestaware, designer costume jewelry and other interesting items. After 6 months - from October to April which includes both the Christmas buying season and our snowbird season - I pulled everything out because I would have done better just selling the stuff on eBay. This was all stuff I'd inherited, so I had no costs except the mall fees. The items that sold would have quickly sold on eBay for similar prices. The antique mall charged $60 a month for the display case, plus 12% of the selling prices of everything sold. EBay's fees are much cheaper even when you factor in the additional paypal fees. One interesting note about the malls. Almost everything we sold was sold within 7 days of placing it in the mall. If it didn't sell in the first week, it didn't sell. Some of the items we sold ended up in other dealer's display cases. INSANITY. I sell a Fiestaware pitcher for $80 to antique dealer who moves it into her display case for $125. 22 months later it's still in her case. I'm tempted to say antique malls are a waste of time, but I do have students who do well in them. These students are all in areas of the country with large quantities of antiques and collectibles. They are constantly adding items to their booths, and mostly price their stuff so other dealers will grab it and try for the long dollar. The example above of the Fiestaware pitcher is a poor example of going for the long dollar. I say poor because the spread between cost and price is so low. The only way to find out if an antique mall will work for you is to try it for a few months. I bet you could also go into a mall 2 or 3 times a week for a few months and look at the items in your specialty to see if they turn over or just sit on the shelves. I've now answered most of Patrick's question. The only thing I haven't mentioned is what materials I have that will help his wife become an antiques dealer. I have a package called the Collector Strategies package. It explains 83 ways to get people to offer you their antiques and collectibles. The package also comes with interviews with antiques dealers and other materials to get you started dealing antiques and collectibles fast. The Collector Strategies package includes a book on doing eBay consignment sales. That's actually the best place to start if you have little knowledge of specific collectibles. EBay Consignment allows you to learn about items while you make money. I sold large collections of everything from collectible spoons (mostly worthless) to limited edition plates (mostly worthless) to antique law badges (mostly cheap, but some are very expensive!!) along with trains, toys and other items I already know about on consignment. I also spent years selling items for thrift stores on eBay. Everything from tools to dishes, basically I walked around in the thrift stores and took whatever I thought would sell on eBay for enough to make it worth my while. How I met and signed up the sellers is covered in the eBay consignment book. Right now in this economy, your consignment service would be profitable and help many people cover their bills.
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