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If there has been an optimist in these markets, it has to be said that it’s been me. I have stood steadfast when others were saying the sky is falling, but can I remain in that posture? Yes, the better things will always have a market but it may be that the times have changed and it is our duty to change with them. So what am I saying and why?
I met with one of the principals of Direct Auction yesterday and he said that average items were bringing nothing and even better pieces were beginning to slip. Here is an example. I took two large rugs from the estate which I bought the clocks from to Direct. They were top quality and I knew they cost thousands of dollars when purchased. When I asked what they would bring at Direct, the answer floored me, less than $100 each. I also took a wonderful tea set with 12 cups and saucers plus sugar and creamer and the teapot. They were all marked
and they were egg shell porcelain. The decoration was wonderful and it covered the outside as well as the inside. I figured that the set would bring $350 with no problem but the auction house said that a reserve of $150 was too high. Then I had a mixed set of Limoges with gold rims that I wanted $200 for but was told I would have to include other things so that it would bring $100, which I did. The reason each lot must bring at least $100 is because the maximum commission is charged if a piece brings less that $100. Limoges
So what does this tell us? We must restrain our buying even more until the economy improves. The lower and middle range items should only be purchased at 10% or less of their retail value and for the higher end items, 20% may be a better starting point than the 25% that we have used in past years. I believe that this is temporary bur we must make adjustments until this changes.
Try to keep a large percentage of your money liquid so that you will have it for those special bargains and not tied up in merchandise that won't move. Here is the best tip that I can give you today. Try to shorten your turn around time to just a few days. One way to do this is post ads on Craig’s List and sell to another dealer, like the clocks I sold. Another answer might be our classifieds, but it may take a few months for us to really get the hits needed to move merchandise quickly. A short while ago, I recommended that we invest all our money in our inventory because things were getting too cheap, but now I am having to readjust that a little. Invest it all, but only if you feel that it will stay in inventory for a short period of time.
Keep your powder dry because there will be another day.
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