Dec 7, 2013

Inventory Pricing Has Nothing To Do With ‘Fair Value’

I’m a sucker for a bookstore. I can’t seem to walk past one without going in, and I seldom go in without buying something.

This has been a lifelong affliction of mine. When I was a teenager, my mother once asked me, “Why do you buy more books when you haven’t read all the ones you’ve got?”

To which I replied, “What’s the point in having a library full of books that I’ve already read?”

Occasionally I read a book that’s a real game-changer for me; a book that rings so true it forever changes the way I think about a particular subject. I’ve recently read such a book, and I enthusiastically recommend it to my friends and colleagues in the antiques business. It’s titled, “Priceless: The Myth of Fair Value (and How to Take Advantage of It)” by William Poundstone. This book should be required reading for anyone who intends to buy or sell anything. Read More

5 Ways to Finance Your Antiques Business Without a Bank Loan

Applying for a bank loan for your fledgling antiques business is a quick and easy process: you fill out the loan application, and the bank says “No!” It’s sad but it’s true. Bankers just don’t understand the antiques trade. Unlike most bankable retail businesses, the antiques trade has no published operating benchmarks, too many variables in valuing inventory and is overwhelmingly undercapitalized.

These days, even well-established antiques retailers and auction houses can be turned down for a loan. Since the banking crisis of 2008, the standards for small business loans have become so stringent that 70 percent of all small business loans are turned down. It’s no longer enough to have good credit and cash flow. In most cases, loan applicants must also have adequate collateral and show strong revenue growth and profitability for the past three years. How many antiques businesses do you know that have had strong revenue and profit growth in the past three years? Read More

What Antique Dealers Can Learn from Junk Mail – Part 2

In the last edition of Behind the Gavel, we discussed the criteria for developing a good display ad. This week, let’s apply the guidelines to our sample ad and see what we can come up with.

The most important part of a display ad is the headline. Headlines, whether online or in print, are written to grab the attention of “scanners.” Consumers read headlines first, then sub-headings. If the headline piques the readers’ interest, they will read your sub-heading. So, your headline must be strong enough to attract attention away from all the competing ads on the page.

The sub-heading is the second most important part of your ad. In fishing terms, the sub-heading is where you “set the hook” – if you don’t, the rest of your ad won’t be read. So, let’s first focus on how to write a good headline and sub-heading.

What will grab your reader’s attention? Read More

Dec 6, 2013

What Antique Dealers Can Learn from Junk Mail

I have a confession: I am a junk mail junkie. Unlike most sensible people (you, perhaps?) who throw junk mail into the trash, I read everything. Offers for credit cards and insurance, car dealership flyers, coupon mailers, newspaper ads, and long-form sales letters get read from beginning to end. I’ve been doing it for 40 years. My mother would be so ashamed.

It’s not that I have nothing to do and lots of time on my hands. My problem is that I am addicted to advertising. When I started my first business, I couldn’t afford to hire an agency to develop my ads. So, I let the newspaper write my display ads for me. Big mistake. Perhaps The Washington Post had a good ad department, but my hometown newspaper did not. The ads that my local paper created were awful, and I decided that I could do better myself.

That’s when I started analyzing other company’s advertising. After all, banks and car manufacturers spend hundreds of thousands of dollars to develop and test each advertising piece. Read More

Dec 5, 2013

How to Get Google to Notice Your Product Descriptions

Earlier this year, Google revised its search-results ranking algorithm in a way that will help some online sellers and hurt others. Google constantly makes “corrective” adjustments to its algorithm, in an attempt to provide better search results for users and quash those webmasters who try to “game” the system in order to gain page position.

In Google’s sights this time were “content farms,” sites that publish low-quality or duplicate content that is intended to drive advertising revenue rather than provide valuable content to users.

An unintended consequence of the change was that many e-stores found their page ranks drop significantly. The largest drops were suffered by retailers who copied and pasted the product descriptions that were provided by their product manufacturers. Why? Because the re-used descriptions were duplicate content, and all duplicate content was downgraded by Google.

Online sellers whose page positions are lowered can suffer significant drops in revenue. Conversely, sellers whose positions substantially improve may see their cash flow turn into a cash flood. Read More

Dec 4, 2013

Why the U.S. Antiques Trade Needs a National Association

One of W. Edward Deming’s most-quoted aphorisms is “you can’t improve what you can’t measure.” We have become a society of measurers: how much weight we lost, how many miles we ran, how much money we made, how much we can bench press.

If we have a goal to improve a certain aspect of our life, we generally use our past performance as a baseline to measure our improvement: i.e., “last month I walked 4 miles in an hour, now I’m doing it in 45 minutes”.

As antiques dealers, the only baseline that we have to improve our business is our own past performance. What we don’t know is what our numbers “should” look like. We have no idea what other dealers in our specialty are doing: what their sales levels are, what their payroll costs them as a percentage of sales, what their gross margins are, or how often they turn over their inventory. Those are not the kind of questions that you can ask a competitor. Read More

Dec 3, 2013

Survey Says: Antique Shops Must Adopt More Strategies

I read with great interest Worthpoint’s 2011 Antiques & Collectibles Survey Results, released on Feb 14, 2011. Worthpoint is a leading provider of valuation and associated services for art, antiques and collectibles. The survey was taken from mid-January through early February 2011, and reflects the opinions of dealers and collectors who visited the Worthpoint website during that period.

As I reviewed their survey, my initial reaction was that its results must heavily favor Internet dealers; after all, it was an online survey. As it turns out, this initial assumption about the respondents to the Worthpoint survey was incorrect. Their survey sample was not dominated by Internet-only dealers, but included dealers who used a variety of channels for buying and selling, including the Internet, trade shows, estate sales, auctions, storefronts, and traditional media.

Reading the survey results, I recalled my experience last summer when I traveled to shows and antiques stores and interviewed dealers about “the state of the business”. I thought it might be enlightening to juxtapose my personal results (see Antique Trader’s Oct. 19, 2010, coverage of the Hillsville Market) with the results of the Worthpoint survey and attempt to assemble a balanced view of the buying and selling channels that are actually working for dealers. Read More

Dec 2, 2013

How to Set Traffic Flow in Antique Shops

By arranging your store’s fixtures in a fashion that directs traffic flow and keeps high-profit items in the most visible locations, you can keep customers in your store longer and increase sales.

Have you ever focused your attention on the way you walk? Do you stand straight with your shoulders back, or do you lean forward? Do you saunter or walk quickly? Have you noticed how the customers in your store walk? Most independent retailers give little thought to how their customers walk and move through their stores. These same retailers might be surprised to learn that there is a science dedicated to the study of how customers move within a retail store: it’s called “retail anthropology.”

Retail anthropology was developed by Paco Underhill, who runs a consulting company called Envirosell. Back in the 1970s, Paco began to videotape the way customers move within retail stores. His objective was to find ways to improve traffic flow and increase sales. Read More

Dec 1, 2013

Affordable Tips for Promoting Your Antiques Business

Among antiques dealers, hope springs eternal. Dealers look forward to a new year, hoping for profitable merchandise, good inventory turnover, and new customers. Some dealers will spend the year hoping; others will make a plan and work to make the plan a reality.

Central to gaining more customers and making more sales is building store traffic. Antiques dealers have the same challenges as other retailers: how to build awareness for their business and get more customers in the door. This month, I’ll share some promotions that retailers in other businesses have successfully used; perhaps a few of them will work for you, too. Here are my “11 Promotions for 2011”:

1. Create space for community/club events. This idea comes from a used book seller in Maryland, who has a room behind his store that he loans to community groups for their meetings. Toastmasters, the local bridge club, and (of course) local book clubs all gather at his shop on a regular basis. He provides coffee and cookies for each meeting and makes it a point to get to know each of the club members, who invariably become regular customers and spread the word about new items. Read More