Dec 14, 2013

Protect Your Antiques Business with Smart Check Policies

The recent hubbub surrounding William Meloy’s using bad checks to scam antique stores caught me off guard. In these days of electronic check verification, Internet check processing, and point-of-sale terminals that support multiple payment options, I was surprised at how easily Meloy victimized the dealers.

For those who missed the story, the grandfatherly Meloy allegedly spent his summer defrauding antique stores in Wyoming, Missouri, North Dakota and Minnesota before he was finally arrested in Great Falls, Mont. Writing checks on a closed account, Meloy would make purchases in the neighborhood of $1,000 and then re-sell the goods for cash to other antique dealers.

As I read the news reports and listened to comments from the defrauded dealers, the refrain “He seemed like such a sweet guy” dominated the responses. Of course, building trust is key to a con-man’s operation. I’m reminded of the story of Frank Abagnale, the teenage con-man who, back in the 1960s cashed over $2.5 million worth of forged checks before he turned 21. How did he do this? Read More

Is That Gibson Les Paul Guitar Real or Fake?

Jimi Hendrix owned one; so did Mark Knopfler, Eric Clapton and Jimmy Page. The Gibson Les Paul guitar, in continuous production since 1952, is arguably one of the top electric guitars of the past 60 years. It has been favored by some of the premier guitar players in the rock, country, jazz and blues genres.

Because the Gibson Les Paul has been around for so long and is such an esteemed guitar, it is a highly-sought-after collectible. Rare Les Pauls have sold for close to half a million dollars at auction. Though such prices are uncommon, a vintage Les Paul regularly bring over five figures.

When prices get up into the stratosphere, con men come out of the woodwork. Les Paul knockoffs are now being made in China in a blatant attempt to deceive buyers. The Chinese “Les Paul” guitars try to match the instrument with visual precision, all the way down to Les Paul’s signature and “Made in the USA” stamped into the back of the headstock. Sometimes the sellers of a counterfeit Les Paul deliberately distress a new knockoff in order to sell it as a vintage guitar. Read More

Estate Inventory Instructions

There’s an old saying that goes “What’s the best way to eat an elephant? One bite at a time!”

Personal property is the “elephant” of an estate. It’s the responsibility that can take up most of your time, and it provides the estate with the least amount of money for the effort involved. But, dealing with the personal property cannot be avoided. The property must be inventoried, valued, distributed, or sold. Let’s start our analysis by looking at what property we have (inventory); then we will determine what it is worth (valuation).

When you go to the courthouse, the clerk will provide you with the form you will need to fill out for the inventory. The form will ask you to provide general categories and a value for each category you have listed. For example, you would list: “furniture, $1500; office equipment, $300, etc… You won’t have to list the items separately, such as “sofa, $100; chair, $5; typewriter, $25. I suggest that you do keep a list of the individual items, though. Although you won’t have to go into a lot of detail for the court, you will likely want a more detailed inventory for yourself. You’ll want this for two reasons: to track the sale of estate property, and to protect yourself against claims of heirs and/or creditors.

You don’t have to get real fancy with the inventory; pencil and paper will do. If you are so inclined, there are “home inventory” record books available at office supply stores, or you can purchase software online. There are also companies that specialize in taking home inventories.

You’ll need a helper. One person sorts and counts while the other writes. Start inside the house, and work your way from the top of the house to the bottom (or vice-versa). Go room to room with a consistent pattern so that you don’t miss anything: always clockwise or counter-clockwise around the room. Write down what’s on the walls as well, not just what’s on the floor. For “small goods”, write down identifiable groups of items such as “200 hardcover books, 100 paperback books, 42 knick-knacks, etc… On your list, put a star next to any item that you think may be valuable. If the knick-knacks are Hummels or Lladros, the vase is Heisey and the books are first editions, they are valuable items. When you are finished, follow the same procedure for the outbuildings: the garage, shed, workshop, or whatever. If there is a rented self-storage unit, vacation home, recreational vehicle or boat, they will need to be inventoried as well.

When you file the inventory at the courthouse, you’ll need to state a value for the personal property. For run-of-the-mill household items, the valuation lists on this website should help..

For the items that you have identified as being valuable, the valuation lists won’t work. There are several ways to determine the value of single items or collections. A good place to start is eBay (www.ebay.com). To use eBay to help set your values, you will need to be a registered user. Registering for eBay is free; just follow the instructions when you get to the website. Once registered, type in the item you are researching, and eBay will search for the item. When the search results come up, click above the search results where it says “sold listings”. These are items that have actually sold, so the prices can be considered “market value”. Compare the details of the item you found on eBay with the details of the item you have. Use the closest match as your value.

If you are unable to find your item listed on eBay, it’s time to go to the library or bookstore. There you will find an assortment of price guides for every sort of antique or collectible. You will also find “blue books” for automobiles and equipment.

If you have lots of items and no time to research, then it’s time to call in an expert. In your local phone book you will find jewelers, antique dealers, auctioneers, appraisers, and other professionals who will tell you what the property is worth. What they will offer you is an opinion of value, not an appraisal. An appraisal is based on actual sales data, not an opinion. For probate valuation purposes, the value placed must be the fair market value at the time of the decedent’s death. This is the value you should ask your expert to provide.

In my home state of Virginia, individual items or collections that are valued over $500 must have an appraisal. Personal property appraisers are not licensed like real estate appraisers, but the content of their reports is regulated. For a personal property appraisal to be valid and accepted for tax purposes, it must be performed by a qualified expert and follow the federal guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP). Most real estate appraisers do not appraise personal property. You can find a personal property appraiser online by checking the websites of the Certified Appraisers Guild of America, the National Association of Auctioneers, or the American Society of Appraisers.

Estate Executors will find that the inventory and valuation of estate personal property is their most time-consuming task, but there are resources available to help.

Dec 13, 2013

Put Your Antiques Biz on Page 1 with Google Places

“I’ve never been lost,” said Daniel Boone; “But I was once perplexed for a few days.” It’s said that Boone was a master at staying found. Making his way through the wilderness with nothing more than an incomplete map, a compass, and his own sensibilities, he blazed a trail that thousands would follow from Virginia to Kentucky.

“Staying found” is a significant challenge for bricks-and-mortar Antique stores. New customers will stumble upon stores that are located on well-travelled thoroughfares. Dealers who pump money into traditional media advertising (newspapers, radio, yellow pages) may also attract new customers. But, high-traffic locations and traditional media advertising are very expensive, and many dealers simply can’t justify such high overhead. So, they hope that new customers will find them through word-of-mouth rather than a proactive promotional campaign.

Before you turn the page, let me tell you that this isn’t going to be another column about the virtues of inexpensive Internet advertising. You should already know that your business needs a website, and that the website has to have good content, targeted keywords, and be search-engine optimized. However, you can have all that and still be lost in the wilderness of Google or Bing search results. Read More

Evaluating an Antique American Upright Piano

Old pianos are everywhere: in homes, institutions, churches and schools. Many of them are junk, but a fair number of them are marvelous instruments from the “Golden Age of the Piano (1890-1919) and are worthy of preservation. Old pianos can be purchased cheaply (compared to new pianos), and if you know what to look for, you can find one of these “diamonds in the rough.”

It’s easy to make a mistake when purchasing a piano, though. A particular piano may look good—and even sound good—but hidden inside may be problems that are expensive to fix. Unlike fine violins, guitars and other acoustic stringed instruments, pianos do not improve with age. Rather, they deteriorate. Pianos are mechanical; they are musical machines. Machines have moving parts that wear out and break. Pianos have more than 220 strings that pull across the frame and plate at a tension of more than 200 lbs. each. That’s more than 20 tons of tension pulling across a piano! Imagine what that much pressure can do to wood over the decades. Piano soundboards, bridges, tuning pin blocks and cast iron plates can (and often do) crack. Cracks in a piano may be expensive or impossible to repair. Read More

Dec 12, 2013

10 Tips on How to Succeed as an Estate Executor

When Sharon called me, she sounded desperate. Her aunt had recently died and Sharon had been assigned to be her aunt’s estate executor. As a certified public accountant, Sharon was well equipped to deal with her aunt’s finances. However, when Sharon walked into her aunt’s house her initial confidence turned to despair; she had no idea how to evaluate or dispose of her aunt’s personal property.

Sharon’s fears are shared by non-professional estate executors everywhere. Walking into a decedent’s house for the first time, an executor has no idea what’s valuable, what’s junk, which relative is going to want what memorabilia, or how they’re going to get the house empty and prepared for sale. Personal property is the “800 pound gorilla” of an estate. Sorting through an estate’s personal property can be a stressful undertaking for someone new to the job. Dealing with personal property issues consumes most of an executor’s time and causes most of the aggravation.

When approached in an organized fashion and with the right mindset, estate liquidation can proceed smoothly and without stress. Let me offer 10 tips for staying sane and on track when it becomes your turn to supervise estate liquidation. Read More

Improve Your Customer’s Retail Shopping Experience

These two simple tips can give antiques retail store owners an edge in improving a customer's retail shopping experience.

Dealers, would you rather be the only antique store in your town, or one of many? I asked that question often in my recent visit to the Hillsville, Va., Labor Day Flea Market. A surprising number of dealers answered that they would rather be the only store in town; one dealer even boasted that he was the only antique store in his town, and that he enjoyed having the antiques trade “sewn up” in his community.

As the iconic character Mr. T often said in the movie and TV show “The A Team”: “I pity the poor fool.” If this dealer understood how competition stimulates his business, he’d be begging the town council to establish an antiques district on Main Street. If consumers don’t find an item they are looking for in one shop, they visit another (provided there’s another shop to visit). That’s why it’s called “shopping.”

Having competitors around creates a good shopping environment. Read More

Dec 11, 2013

Use Facebook to Build Trust Without Alienating Customers

Walking down Main Street in Mt. Airy, N.C., I feel like I’ve stepped into a 1960s sitcom. Mt. Airy, the boyhood home of Andy Griffith, was the inspiration for his television home town of Mayberry. As I stroll by Floyd’s Barber Shop, I peek inside and notice that all the chairs are full. Not the barber chairs, but the waiting chairs against the wall. Those seated are engaged in animated conversation, and a crowd has gathered to listen to the dialogue.

This is a common sight here in the Blue Ridge Mountains: Residents gathered in a local store to visit and gossip. Sociologists call such gathering spots a “Third Place.” A Third Place is a social venue which is separate from Home and Work that fosters broader communication between participants and builds a sense of belonging and community.

In his 1989 book “The Great Good Place,” author Ray Oldenburg asserts that a good Third Place is accessible, comfortable, nearby, involves regulars, and is open to both new and old friends.

Sounds like Facebook to me. Read More

Dec 10, 2013

eBay’s Fraud Protection Plan Boosts Your Sales

eBay fraud is in the news again. The headline reads: “Three eBay Fraud Rings Dismantled in Romania.” Romania must be a hotbed of Internet-scam artistry. Just a few years ago, a headline read: “Small Romanian Town Gets Rich Through eBay Scams.”

They must be fast learners in Romania. The first attempts at eBay fraud included selling a MiG fighter jet and a local Town Hall. I suppose the rings soon learned that there were only so many suckers for big-ticket inventory.

In the current scam, ads were posted on eBay and craigslist offering a variety of merchandise, ranging from cars to electronics. Internet users were defrauded of about $20 million. The busts were a coup for the Romanian National Police and the FBI, who made about 90 arrests in 117 raids on nine towns.

Now, forgive my obtuseness, but I can’t find anywhere in the article where it says that eBay scammed anybody. So, why does the headline declare “eBay Fraud”? The words “eBay” “eBay Fraud” and “eBay Scam” appear so often in the media that one would think that eBay is used only by con artists and the feeble minded. Read More

Dec 9, 2013

The Pain of Cutting Prices to Move Stale Inventory

I like having money to spend. I try not to spend it, but just having money and knowing that I could spend it if I wanted to feels good to me. I don’t think that I’m alone in feeling this way, either. Money affects people in physical ways and I recently stumbled onto proof that this is true.

In 2009, Kathleen Vohs of the University of Minnesota conducted an experiment disguised as a “dexterity study.” In the study, she had one group of students count a stack of $100 bills while another group counted a similar-sized stack of blank pieces of paper. Then, both groups of students stuck their fingers into very hot water. The students who counted the real money reported feeling significantly less pain from the hot water than the students who didn’t handle the money.

The effect was so pronounced that Ms. Vohs tried the experiment in reverse: She asked some subjects to make of list of their monthly expenses and another group to write about the weather. The group who listed their bills felt more pain from the hot water than the group that wrote about the weather. Read More

Dec 8, 2013

Profit from Selling Estate Art

“Antiques dealers don’t know anything about art” explained the art gallery owner. “You have to be really careful buying art from an antiques dealer because you never know what you’re going to get”.

I didn’t argue with the woman because I knew from my own experience that what she said about antiques dealers and art is generally true. Some of my best art purchases have been from antiques dealers and auctioneers who didn’t know the value of what they had. So, I didn’t defend antiques dealers to the gallery owner.

In practice, antiques dealers who are knowledgeable and well inventoried in art generally represent their shops as art galleries that specialize in art and decorative antiques. Antiques and collectibles dealers, on the other hand, usually carry art as an afterthought. Often, the art on their walls was acquired in an estate buy-out rather than purchased as individual items. Most antiques dealers offer some type of art for sale, but many dealers shy away from art because they don’t know enough to profit from it. Read More

The Time is Right to Open an Antiques Shop

It’s my opinion that the antiques business is the only retail business worth pursuing at the moment.

Consider the problems faced by commodity consumer goods retailers: In the past decade,“Big Box” stores have put scores of Main Street retailers out of business.

Competition from online dealers has shaved commodity retail store margins so close that it can take months for a business to recover from a downturn in sales or an uptick in expenses. An army of consumers armed with smart phones can instantly compare prices on virtually every commodity offered for sale and then harangue a retailer for a matching price. When a consumer has secured the lowest price, he or she can then scan the product’s QR code for additional bargains and manufacturer’s coupons. In commodity retailing, margins are tight; there’s not much room for error.

Not so with antique retailers. Despite all the gloomy predictions for the antiques trade, this is the place to be. There will never be competition from “Big Box” retailers of antiques, because there will never be any. Read More

Your Antiques Inventory Prices: Value, Cost or Gut Feelings?

Have you ever seen the Edvard Munch painting “The Scream”? If Munch doesn’t ring a bell, recall the scene in the movie “Home Alone” in which Macaulay Culkin shaves for the first time, and then applies after-shave to his raw face: hands slapped over his ears, eyes as big as saucers, he emits a scream that can be heard a block away.

Such was my response to a Harvard Business Review article that recently arrived in my inbox. The article discussed book pricing relative to Amazon’s Kindle, Apple’s iPad, and traditional print books. The author’s position was to keep prices high for ebooks, because “charging what the market will bear creates value not just for companies but for consumers as well”.

I read that statement and screamed. Macaulay has nothing on me.

You see, value is not created by price. Value is a personal issue. Price is determined by the intersection of supply and demand. Value can have an impact on demand, so consequently has some impact on price, but it is a secondary determinate. Read More