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...

Mar 13, 2014

Ed Sullivan Show’s Autographed ‘Beatles Set’ Section to be Auctioned

On April 26, 2014, a two-foot-by-four-foot section of backdrop from the Ed Sullivan Show’s studio 50 stage set of Feb. 9 1964 will be auctioned by Heritage Auctions. It is perhaps one of the most famous sets in television history, as it was seen by 73 million Americans on that date in 1964.

The set was used as a backdrop for The Beatles first live television performance in America. In between songs, all four of The Beatles autographed and drew doodles on the set section. The piece, made of plastic and professionally mounted in a shadow-box frame, is expected to bring $800,000 to $1 million at auction.

That the set section even exists is remarkable. Typically, such sets are made for short-term use and then discarded. But an observant carpenter cut out the section encompassing the autographs and gave it to a disabled teenager with whom he was acquainted. Had The Beatles not erupted onto the American music scene a few months earlier, I’’s unlikely that the carpenter would have been inspired to cut out the section of wall. After all, Sullivan had “big stars” on his show every week, and sets for those stars ended up in the trash bin.

In the 1980s, the piece was sold by the former teen to Rodney Cary, owner of the Southdown Lounge in Baton Rouge, La., who displayed the piece on a wall inside his lounge. Sometime later Cary’s wife Laurie took the piece to a Beatles memorabilia show in Los Angeles, where she was offered six figures for it by interested buyers. Surprised at its value, the Carys took the piece back to Louisiana and placed it in a vault for safekeeping. In 2002, it was purchased for $100,000 by collector Andy Geller. It is Mr. Geller who is offering the piece at auction. Read More...

Mar 11, 2014

Baby Boomers Tuned In with Transistor Radios

A recent family reunion found me sitting at my sister’s dining table with siblings and their families, sharing stories and looking through old photos. The older adults were actively conversing, and the younger adults were in their own world, each texting away on their smartphones. As the photos made their way around the table, a niece stopped texting long enough to exclaim “Uncle Wayne! Is that a pack of cigarettes in your shirt pocket?”

I recognized the tell-tale pocket bulge instantly: it was my pocket transistor radio. Mine was a Realistic model (Radio Shack) that I had received for my 12th birthday in 1961. Further photographic evidence proved that today’s generation is not alone in their addiction to technology: the family photo box also produced a pic of me and my friends sitting in the grandstand at Calvin Griffith Stadium, watching our beloved Washington Senators lose to the New York Yankees. The photo captured the four of us, eyes fixed on the field, wearing ear buds, transistor radios in our laps, listening to the play-by-play on the radio.

When pocket transistor radios became affordable in the early 1960s, they were as common to teens and ’tweens as smartphones are today. They gave a kid a new independence: no longer were we restricted to what Mom and Dad wanted to listen to in the car or at home. We could plug-in anywhere, and we often did. A trip to the park could turn into an ad-hoc dance party, playing music that was discouraged at home: Elvis, Little Richard, The Everly Brothers and a host of Motown girl-groups. Bus rides and school trips were made more tolerable because of these electronic wonders, and we were willing to take risks to have access to them. Proof thereof: my school principle had a desk drawer full of confiscated transistor radios (we weren’t allowed to use them in school). Read More...

Mar 9, 2014

Opening a Second Store? Do Your Homework

When the ghost of Jacob Marley visited Ebenezer Scrooge on that Victorian Christmas eve, Marley was dragging chains representative of the mistakes he had made in his life. Small business owners – especially retailers – do the same thing. We drag our mistakes around year after year until we become accustomed to them. We feel that their weight is a normal part of doing business, and we don’t recognize how much they drag us down until we are shed of them.

We drag chains made of excess inventory, debt, employees and unproductive locations.

All of these chains are difficult to get rid of. The solution to the problems they create can be compared to quitting cigarettes: It’s better to not start at all. But, a generation ago, teens would start smoking because it was cool and available. As small business owners, early successes boost our egos and we crave more success. We say: “If I can make ‘$xx’ profits from one store, I can make twice as much from two stores.”

It’s an easy trap to fall into; I fell into it myself. I bought my first store while in my mid-30s, and quickly tripled sales and profits. I thought I was a genius. So, I bought a second store, and then a third. The profits didn’t double with my second store, or on the third. But my workload and troubles easily tripled. Nevertheless, I carried those troubles year after year, just like Marley’s chains, until I figured out a way to shed them.

Once away from them, I could look back and clearly see where I made my mistakes. There’s no teacher like experience: It gives the test first, and the lesson afterward.

It’s a rare occurrence when a second store is as profitable as the first. Read More...