Last month I began to cover the topic of utilizing social media. It’s obviously a very broad topic, which I’m sure I will write more about in a future issue. This month I’d like to change gears and move on to another topic—branching out into new lines of business.
I’ve received a few letters from dealers thinking of investing in and selling new lines of merchandise within the antiques space. My first word of advice is to investigate thoroughly before diving in to anything new.
Here is an example of how not to do it. My wife and I started collecting antiques to furnish two homes we had bought in 1989 (one in Chatham, New Jersey, and the other in Stratton, Vermont). After doing some investigation into purchasing general furnishings at large retail establishments, we felt antique furnishings would be more fun to shop for and could perhaps even be a decent investment. It was money we’d have to spend anyway to furnish our homes, so why not furnish them with antiques? We started attending shows and stopping at every shop that had a sign saying “antiques” on the outside.
We were trying to educate ourselves by asking plenty of questions. In the process we were discovering new types of decorative and usable things that we liked. Blue Staffordshire and flow blue plates would look good on the wall or cupboard. Oak furniture was sturdy and could be found with attractive lines and hardware. I found that antique prints were of better quality and did not cost much more than those posters I had in my room when growing up. I found antique frames actually cost less than new and not so interesting ones from a quality framer. We began to buy and furnish our homes, and we continued to see new things we liked.
My wife began to take interest in finely made American splint baskets. She had just started looking at baskets, and I really paid no attention to them, so my experience in this area at that time was zero. We decided to attend a popular outdoor on-site auction in rural upstate New York that had more than a few items we were interested in. This auction was a first for us. What fun and excitement! We spent about an hour going through everything in the house and grounds. It was a bit overwhelming. “Will people really buy all this stuff today?” I thought.
When it came time for the auction to start, I realized my wife was a little intimidated by the bidding process, so she handed off that job to me. “Bidding seems easy enough,” I was thinking. Just before the auction started, my wife pointed out several furniture items and a basket she liked. We discussed the maximum prices we were willing to pay. She was willing to pay $10 for it, no more. Fair enough I thought. (Actually I thought to myself, $10 for an old well-used basket?)
The auction started and we waited and watched. Finally after about an hour the first item on our list came up for bid. The basket was held high in the air by the auctioneer’s helper. It started at five and began to move its way up. When the bidding got to about 30, I jumped in. The bidding went in increments of ten. It was my bid at 80; the other guy bid 90. Then the auctioneer said the first words that concerned me. He said, “I have ninety; who’ll give a hundred?”
One hundred? I thought to myself, one hundred what? Why would he say 100 instead of $1? It made no sense to me. So, before I raised my hand again to place my whopping one-dollar bid, I stood up and asked out loud, “One hundred? You mean one dollar, right?” The auctioneer was not amused and reprimanded me for not knowing what I was doing and slowing down his auction. He told me the current bid was at $90 and asked if I wanted to bid $100. I was shocked and sat down quicker than the roadrunner in those Saturday morning cartoons.
I looked at my wife and said, “What idiot would pay a hundred dollars for an old basket?” Just about that time we figured out that the couple who was bidding against us was sitting directly in front of us and heard my comment. Boy, did we have a lot to learn about etiquette, antique baskets, and the entire auction process.
I learned my lesson that day by coming home with nothing and just watching and taking it all in. I’m glad to report that from then on we were more prepared and never made any of those mistakes again. I made it a point to do my homework before jumping headfirst into anything.
It’s a good lesson for everyone. If you are not happy with the way your current inventory is moving, it may be time for you to branch out into new lines of business, but not before you study the trends and the merchandise enough to be very proficient in obtaining and selling that new line. Easier said than done, you might be saying to yourself. That takes time! And by the time I figure it out, the trend might be changing to something else! You’d probably be right.
A funny thing always seems to happen when I get interested in something new that never interested me before. I usually spot something that appeals to me and that I have not paid attention to before. The issue is that I don’t know what a fair price would be, so more times than not I will pass on the item, but I do ask to take a picture of it, and then I store that picture along with the date and the price. The not so funny part is that years later it always turns out that that first item was special, special enough to originally have turned me on to it in the first place. I sometimes feel as though I passed up a great buying opportunity. You always think about the one that got away. But in the end I can live with the fact that I did not start buying until I had gained a little knowledge in that area.
There are many positives in being in the antiques trade, including a unique and constantly changing inventory. One of the negatives is that there is no one tracking trends in this industry on a daily basis. Sales are not going through store scanners, and we don’t have AC Nielsen or IRI reporting on the category and telling us what parts of the market are hot and which are not. Following auction results can give us some idea, but it’s difficult to assess how much better one item is over another based solely on pictures and short catalog descriptions. Should it have brought double what someone paid? The research is very time consuming and not available in one place. (Hey, there is a new business idea!)
It’s not going to be easy, but through investigation you may feel there is an opportunity for some type of service to be started. Usually you are alerted to new lines of business by simply observing your surroundings. At the next show, make sure you walk around and simply observe. What are people stopping to look at? What are other dealers selling? What is the buzz at this show?
The biggest reason to get familiar with this new specialty area is that you need to be able to make educated buying decisions that leave room for your margin. The only way you can do this is to have studied up on the category. Don’t take other people’s words for it. Get out there and investigate it yourself, and when you feel comfortable, go ahead and branch out and test the market. Just as in trying new marketing vehicles, you need to continue to try new lines of business.
By joining forces with one of your competitors you’ll worry less about losing sales and be able to focus more on growing your business. Now, the question is, how do you generate new business that will give you both better results than you have now? For starters, make sure you do your homework before you jump into any kind of partnership with anyone.
Be clear about what you want to achieve with your partnership. Yes, ultimately it’s about growing your revenue and profits, but having more concrete, mutually beneficial goals is the first step in achieving them. Trust but verify. Even if you are very familiar with your prospective new “business partner,” you need to do a complete background check. My grandmother always used to say, “Better to be safe than sorry.” Regardless of who your potential partner is, always check him or her out before moving ahead. Remember it is not just about money; it’s also about safeguarding your credibility and your current assets.
Make sure you have different but complementary experience and work styles. If you feel you are strong in acquiring and selling your inventory but maybe a little unorganized and uninterested in “all that accounting stuff,” make sure you find a partner who has a stronger operational background, maybe a strong marketer who likes dotting i’s and crossing t’s. That marriage would work better than partnering with someone just like you.
Once that’s done, be ready to commit. If you’ve decided to team up, you must take it seriously. Always remember that your new partnership requires a high level of commitment for you to succeed.
Feel free to e-mail me if you have potential topics you want me to cover or if you have comments. I can be reached at <firstname.lastname@example.org>. I’d love to hear from you.
Originally published in the March 2014 issue of Maine Antique Digest. © 2014 Maine Antique Digest