Mar 15, 2014

Dealing in Used Goods More Profitable than New

My friend Brian is an exercise fanatic. He has special outfits for each type of exercise, and electronic meters to gauge each workout. I’m not into exercise at all. You’ve heard the expression “No pain, no gain”; my motto is “No pain, no pain.” As Phyllis Diller once said, “My idea of a workout is a good brisk sit.”

But I admire Brian’s persistence. What I admire even more is his meticulous record keeping. Brian strives to improve his performance with each workout, and he understands that the only way to improve performance is to first measure it.

Business owners are constantly measuring and analyzing their performance. The compare this month’s sales figures to the same month last year, compare store A to store B and so on. Some industries have national associations that provide “benchmarks,” or performance standards for their particular industry. Each year, industry business associations send out anonymous questionnaires for member business owners to fill out and return. The information collected from owners is organized into categories, which become the operating benchmarks for a particular industry and goods. Typical benchmarks for retailers include sales per square foot of floor space, profitability, gross margins, inventory turnover, certain balance sheet ratios and return on investment. Many retail businesses – but not antique dealers – have national associations that track benchmarks.

Having benchmarks enables a retailer to answer the question, “How’s everybody else doing?” With such information, a retailer can determine if he’s doing better or worse than the rest of the pack. Plus, benchmarks offer a clue as to what could be done better in one’s own business.

Although antique dealers don’t have published benchmarks, I’ve found something very close that dealers can use to gauge their performance. Plus, my discovery confirms the gut feeling I’ve had for a few years now: The antiques business is the best kind of retail business to be in at present. Read More...

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