It's mid-January and we've now entered the dead of the year. Sales are down - even further - but this down-turn is a part of the natural cyclical down-turn that occurs after the New Year almost every year. Auction sales are minimal since mid-December, so inventory growth opportunities are fewer.
Now is the time to take a look at your booth/shop and consider if there are some changes that need to be made. Redesign of the shop should take place now. Take your stock and if your haven't cleaned it recently, take a damp cloth or dust pad and wipe things down. Rearrange things, make a nice display, clear things off of the floor so that the customer can get to the items behind it.
Do you have a display case? Clean the glass on it. Put a colorful cloth on the bottom shelf. Try to color coordinate it to the items in the case. In reality, all these things should be done all year long, but now is a good opportunity to take a fresh look at your sales technique and make any desired or necessary improvements.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
Sunday, January 27, 2008
Saturday, December 29, 2007
Is it the economy, stupid?
Over the past couple of years, I have heard many dealers observe that business has declined dramatically. Tias.com reported just today that the trade has "suffer[ed] through a major downturn over the past few years." Some believe that the collector group has aged with no younger replacements in sight.
I have been collecting since I was seven, and can tell you that I see no difference between then and now in the demographics of the collector. In the early 1960's, when I started collecting, the typical collector was in the late 30's through the late 60's. Today, I still see the average collector in the same age range. I do not believe that the collector is dying off. We need to look at other reasons for the downturn.
One thing we need to remember is that the antiques trade comprises the sale of a non-essential good. Therefore antiques and collectibles will be among the first things to be cut when consumer confidence is low.
Here in central Pennsylvania, everyone I talk to who talks about the downturn in sales says it happened to them in October/November of 2006. How serious is the downturn? An unscientific survey of vendors at the Nittany Antique Machinery Association's September 2007 flea market revealed a 40-60% decline in sales from the fall 2006 show for many vendors. Some vendors saw an even greater decline.
Lets take a look at what happened in the past few years that may have affected sales.
According to USA Today, "From 2001 to 2004, average family income fell 2.3%". Median family income rose by 1.1% from 2006-2007. However, "real, inflation-adjusted wages are down 1% the past four years" according to another USA Today article. So, wages have been stagnant or declining based on inflation. Remember, inflation figures do not include fuel or food.
In 2006, gasoline first approached $3.00/gallon. From May-August 2006, gasoline hovered in the $2.90 - $2.99/gallon range. Home heating oil was $0.60 - $1.00/gallon above what it was just 16 months previous.
According to the Bureau of Labor Statistics, the most recent Consumer Price Index shows energy prices up 21.4% between November 2006 and November 2007. Food prices has increased 4.8% during that same period. Housing was up by 3.1%.
Credit card debt doubled since 2001. According to money-zine.com "The average household in 2007 carried nearly $8,500 in credit card debt." Credit card delinquencies increased by 26% from October 2006 to October 2007. Credit card defaults increased by 18% during the same period. According to the Associated Press, "...what is coming into sharper focus from the detailed monthly SEC filings from the trusts is a snapshot of the worrisome state of Americans' ability to juggle growing and expensive credit card debt."
With this information, it is clear that the middle class, who are the purchasers of most lower to mid-range antiques and collectibles, are feeling the pinch. The whole picture is beginning to look bleak.
What does this tell us about the antiques trade? Well, it tells me that the trade acts much like a canary in a coal mine. It is an early foreteller of an economic downturn. It dies as the economy slows.
Will the business recover? I suspect it will. However, I do not expect this turnaround to come soon. Reports coming down the pike paint a picture of a stormy next few months or possibly even years.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
I have been collecting since I was seven, and can tell you that I see no difference between then and now in the demographics of the collector. In the early 1960's, when I started collecting, the typical collector was in the late 30's through the late 60's. Today, I still see the average collector in the same age range. I do not believe that the collector is dying off. We need to look at other reasons for the downturn.
One thing we need to remember is that the antiques trade comprises the sale of a non-essential good. Therefore antiques and collectibles will be among the first things to be cut when consumer confidence is low.
Here in central Pennsylvania, everyone I talk to who talks about the downturn in sales says it happened to them in October/November of 2006. How serious is the downturn? An unscientific survey of vendors at the Nittany Antique Machinery Association's September 2007 flea market revealed a 40-60% decline in sales from the fall 2006 show for many vendors. Some vendors saw an even greater decline.
Lets take a look at what happened in the past few years that may have affected sales.
According to USA Today, "From 2001 to 2004, average family income fell 2.3%". Median family income rose by 1.1% from 2006-2007. However, "real, inflation-adjusted wages are down 1% the past four years" according to another USA Today article. So, wages have been stagnant or declining based on inflation. Remember, inflation figures do not include fuel or food.
In 2006, gasoline first approached $3.00/gallon. From May-August 2006, gasoline hovered in the $2.90 - $2.99/gallon range. Home heating oil was $0.60 - $1.00/gallon above what it was just 16 months previous.
According to the Bureau of Labor Statistics, the most recent Consumer Price Index shows energy prices up 21.4% between November 2006 and November 2007. Food prices has increased 4.8% during that same period. Housing was up by 3.1%.
Credit card debt doubled since 2001. According to money-zine.com "The average household in 2007 carried nearly $8,500 in credit card debt." Credit card delinquencies increased by 26% from October 2006 to October 2007. Credit card defaults increased by 18% during the same period. According to the Associated Press, "...what is coming into sharper focus from the detailed monthly SEC filings from the trusts is a snapshot of the worrisome state of Americans' ability to juggle growing and expensive credit card debt."
With this information, it is clear that the middle class, who are the purchasers of most lower to mid-range antiques and collectibles, are feeling the pinch. The whole picture is beginning to look bleak.
What does this tell us about the antiques trade? Well, it tells me that the trade acts much like a canary in a coal mine. It is an early foreteller of an economic downturn. It dies as the economy slows.
Will the business recover? I suspect it will. However, I do not expect this turnaround to come soon. Reports coming down the pike paint a picture of a stormy next few months or possibly even years.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
Friday, December 21, 2007
Pricing: The Right Time
"Observe due measure, for right timing is in all things the most important factor"
~ Hesiod, Works and Days, I, 694. (c.700 BC)
This quote is the basis of the old saw "Timing is everything". If you've been in the antiques trade longer than five minutes, you know that each type and period of antique or collectible has a period of popularity and a period of ambivalence.
This is one of many problems with price guides. Those price guides which are not attempting to modify the market or raise prices are usually a year or two out of date on the day they are published. Price guides need to be used as a guide only, supplemented with real life experience.
But why should a year or two be such a major factor in pricing accuracy? After all, inflation at about 2.2% - shouldn't I be able to add 2.2% to last years price?
Well, that's the difficult part people have in understanding about timing. Five years ago, depression glass brought good prices at auction. Today, you're lucky to get 30% of what was being paid for the same thing.
Other items sell for twice what they sold for just last year. Why?
First, fashions change. Martha Stewart (or replace Martha with whom ever is the latest fashion guru) may have changed focus towards a different collectible. Second, the economy can kill the market for some items. When the average income doesn't keep up with even the small inflation rate, less and less money is available for non-essentials. Lower end collectibles can be hurt, while higher end collectibles can go through the roof just by watching the collapse of the middle class.
There's not much you can do about the collapse of the middle class. That's for bigger minds than mine to deal with. All we can do is to keep this in mind when you make your purchasing and pricing decisions.
To keep an eye on the latest fashion trends, it is a good idea to regularly read magazines such as Martha Stewart, Country Living and Early American Life. This will give you an insight into fashions and demand for certain items.
Ebay will also give you an idea of what items are in demand. While prices in eBay have dropped recently, often being below the shop prices, they are a real time resource for demand calculations and can give you an idea of what is in and what is out.
Finally, if you sell in a group shop, check to see what the other members are selling and how much they are selling for. Trends can be seen in the books kept by many group shops and are much more accurate than eBay sales.
Next, we will explore locality and how it affects pricing.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
~ Hesiod, Works and Days, I, 694. (c.700 BC)
This quote is the basis of the old saw "Timing is everything". If you've been in the antiques trade longer than five minutes, you know that each type and period of antique or collectible has a period of popularity and a period of ambivalence.
This is one of many problems with price guides. Those price guides which are not attempting to modify the market or raise prices are usually a year or two out of date on the day they are published. Price guides need to be used as a guide only, supplemented with real life experience.
But why should a year or two be such a major factor in pricing accuracy? After all, inflation at about 2.2% - shouldn't I be able to add 2.2% to last years price?
Well, that's the difficult part people have in understanding about timing. Five years ago, depression glass brought good prices at auction. Today, you're lucky to get 30% of what was being paid for the same thing.
Other items sell for twice what they sold for just last year. Why?
First, fashions change. Martha Stewart (or replace Martha with whom ever is the latest fashion guru) may have changed focus towards a different collectible. Second, the economy can kill the market for some items. When the average income doesn't keep up with even the small inflation rate, less and less money is available for non-essentials. Lower end collectibles can be hurt, while higher end collectibles can go through the roof just by watching the collapse of the middle class.
There's not much you can do about the collapse of the middle class. That's for bigger minds than mine to deal with. All we can do is to keep this in mind when you make your purchasing and pricing decisions.
To keep an eye on the latest fashion trends, it is a good idea to regularly read magazines such as Martha Stewart, Country Living and Early American Life. This will give you an insight into fashions and demand for certain items.
Ebay will also give you an idea of what items are in demand. While prices in eBay have dropped recently, often being below the shop prices, they are a real time resource for demand calculations and can give you an idea of what is in and what is out.
Finally, if you sell in a group shop, check to see what the other members are selling and how much they are selling for. Trends can be seen in the books kept by many group shops and are much more accurate than eBay sales.
Next, we will explore locality and how it affects pricing.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
Wednesday, December 19, 2007
The Right Price?
Is there a right price for an antique? Of course there is. The right price for an antique is the price for which an antique sells quickly and which puts more money in your pocket than the cost of the item and overhead combined. Seems obvious, no? Well, selling an antique is actually a little more complicated than that.
There are five rights that must converge to get that sale. Price is only one of them. The five rights that must be met to sell an antique are:
1) The right item
2) The right price
3) The right place
4) The right time
5) The right person
The right item is an item that someone wants. This can be a tricky thing at times, because rarity, condition, color can be correct, but if any of the other four rights are wrong it becomes the wrong item. We'll explore this a little later.
The right price is a range. Starting at free, it ranges up to a point where only one person in the world (in his/her right mind or not) is willing to pay for the item. In some (not so rare) instances, to get rid of an item, you may find that free is actually not the lowest price you can get for an item, but you may have to pay to get rid of the item. We will assume that all items discussed here have some value, so free is the lowest price we will consider.
The right place is a little more difficult to define. "Carrying coals to Newcastle" is something we need to keep in mind. An antique sold in an area of abundance has a lower value than if it were in an area of scarcity. While the Internet has changed the concept a little by making rare things common and common things rare, it has its own risks and rewards. For this, we will consider the Internet to be a place as real as, say, Philadelphia or Denver. Sometimes, though, Newcastle may be just the place we want to bring the coal.
The right time refers to fads and fashions. Selling Depression Glass in the 1970's was a different experience than selling in the 1980's or the 1990's or for that matter the 2000's
The right person - remember in the right price where we had some nut willing to pay almost anything for an item? Well, that person doesn't come along very often. But s/he does come along every once in a while. Most often that person has a budget of some sort.
Getting an antique sold is a balancing act where all five rights must be applied in the correct proportions. How do we do this? Let's consider this for a while and then come back to discuss more fully.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
There are five rights that must converge to get that sale. Price is only one of them. The five rights that must be met to sell an antique are:
1) The right item
2) The right price
3) The right place
4) The right time
5) The right person
The right item is an item that someone wants. This can be a tricky thing at times, because rarity, condition, color can be correct, but if any of the other four rights are wrong it becomes the wrong item. We'll explore this a little later.
The right price is a range. Starting at free, it ranges up to a point where only one person in the world (in his/her right mind or not) is willing to pay for the item. In some (not so rare) instances, to get rid of an item, you may find that free is actually not the lowest price you can get for an item, but you may have to pay to get rid of the item. We will assume that all items discussed here have some value, so free is the lowest price we will consider.
The right place is a little more difficult to define. "Carrying coals to Newcastle" is something we need to keep in mind. An antique sold in an area of abundance has a lower value than if it were in an area of scarcity. While the Internet has changed the concept a little by making rare things common and common things rare, it has its own risks and rewards. For this, we will consider the Internet to be a place as real as, say, Philadelphia or Denver. Sometimes, though, Newcastle may be just the place we want to bring the coal.
The right time refers to fads and fashions. Selling Depression Glass in the 1970's was a different experience than selling in the 1980's or the 1990's or for that matter the 2000's
The right person - remember in the right price where we had some nut willing to pay almost anything for an item? Well, that person doesn't come along very often. But s/he does come along every once in a while. Most often that person has a budget of some sort.
Getting an antique sold is a balancing act where all five rights must be applied in the correct proportions. How do we do this? Let's consider this for a while and then come back to discuss more fully.
Jon Boi
By the way, if you are in the trade and would like to get your 2 cent piece in on the discussion - if you have an expertise in marketing or business practices and would like to share with other dealers - drop me a line and I will do what it takes to get your voice heard.
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