Gold and Silver are Even HOTTER!!

Well Gold and Silver still continue their climb while the dollar sinks down the toilet. I'm not sure how high is too high but I do know from experience that too high too fast is a way to lose money if you're speculating short term on these metals. I'm going to bet that the silver I put in my booths at $16.50 an ounce are most likely gone if someone happens to notice it and has precious metals fever. The charts on these metals are not sustainable short term and I plan to sell even more of my silver since I think it has more appeal right now and if you want to put some money in precious metals you should start with silver anyways. Gold is king but you have to have a pretty big wallet right now to buy even a small amount of it. Besides Gold is in a buying panic right now and is overpriced short term in my opinion. Be patient and sit on the sidelines for a correction if you want to be a buyer. If you want to sell take advantage of the spike to make a healthy profit but long term I would hold on to gold that you already have since Washington and the powers that be apparently don't want to save the dollar.

I'm just glad I bought as much silver as I did when I could get it for $3.00 and sometimes less and ounce years ago. But I did have to wait quite a few years to take my profits on some of it didn't I? Anyway people who have some money to invest should buy silver even at these levels and set it aside in case the government sets off a hyperinflation bomb to help them cure that huge national debt that they will never stop piling up. Besides the Chinese are getting reluctant to hold as much US Treasury bonds as they now have and will be cutting their holdings of US denominated investments.

Gee when did I get so political and into macro-economics?

Oh yeah, I like to buy stuff cheap and sell it for more I guess is part of the reason. After all the lesson I learned from some old timers who had money when I was a kid was to buy it when everyone hates it and sell it when they love it. There are many variations on this saying but you get the picture. Markets overdue it on both ends. When it's out of favor they dump it as quick as they can and move on to the next "HOT" item and when it's hot they buy without much concern about the value involved. Now smart treasure hunters know that you buy for pennies or nickels on the dollar and sell it for a dollar and pocket the difference. That's what we're here for isn't it?.......hmmm. I Can't Hear You................Anyways it's all about the thrill of the hunt and the feeling you get when you sell it for a good price. Good luck with your treasure hunting this week.

The 500% Solution

When I first started buying items at yard sales and thrift stores I didn't have a good idea of how much was too much to pay for something that I intended to resell. Much of what I bought I sold on Ebay so the bidders pretty much determined what the sale price was unless I put a reserve on the auction to protect myself from getting too little for a high priced item. My original experience in retail I've mentioned is selling old US Postage stamps to collectors and the general markup rule there is you can expect to get 2-2.5 times what you pay for a stamp which makes the mark-up on average 125%. After my expenses I would net around 40% on every dollar I sold. I quickly found out that a 125% mark-up wasn't going to work for me if I wanted to sell other kinds of collectibles especially after I started selling most items at antique booths. I sat down with my scratch pad early and figured out my expenses and came up with the 500% solution. I determined that as a general rule I wasn't interested in buying something for resale unless I was pretty darn sure I could get at least 5 times what I paid for it retail. I do have some exceptions to this rule especially in the area of furniture and jewelry and some other high ticket items but for 90% of the items I purchase the 500% solution is the standard I work with.

Other dealers I talked with told me I was nuts for thinking I should expect to get so much for an item and warned me that I wouldn't be able to buy enough inventory if I hoped to buy stuff that cheap. Well I stuck to my guns and managed to buy enough inventory to stock 4 booths and 2 warehouses with inventory in the waiting with the 500% solution. One thing I'd learned after buying stamps for 30 years is how to walk away from a buy if the numbers don't add up to my advantage. I am patient and I don't panic while bidding at auctions and I don't fall in love with the merchandise. I fall in love with the numbers. Have I missed out on some deals that would have made me a fair and decent profit? Of course I have and have no regrets usually. I have often told a seller when they asked me to make them an offer on an item I'm eyeing that I will probably insult them but they want to hear anyways. I make my offer and you'd be surprised how many sellers will take that low ball bid. You have to remember a lot of sales involve either people who are moving soon and have a deadline to meet for clearing the house out, or they are liquidating an estate and are under similar pressure to make everything disappear or they just are tired of seeing it in their garage and don't want to haul it back in if it doesn't sell.

I often find that a good tactic for getting a low price especially at estate sales is to find a box and start loading it up with several items and then ask for a quantity discount or just ask for a price for everyting in the box. This works especially well on items from the garage such as tools, textiles and records or books. Getting to a sale later in the day of course helps you get a good price since the prices usually get dropped since the seller is fatigued and anxious to get the sale over with. Now I know getting there late reduces your chances of finding a set of Wedgwood China or any item that has a well known name and obvious premium value. But it's a good bet that those items were priced at a level that would have made it difficult to buy for resale anyway. I have purposely spent a lot of time learning about areas of collectibles that the average dealer doesn't know well so that no matter what time I arrive at a sale I still have a good shot at finding something worth buying with the 500% solution. I have studied Eames era and Danish modern items which you can still find a good deal of at an average sale or Italian and Scandinavian pottery and cookware such as Dansk, Krenit, Arabia of Finland, and many others that are many times ignored because let's face it a lot of it doesn't appeal to the average American. I currently have a Stelton Cylinda toast rack listed on Ebay which was designed by Arne Jacobsen. My oldest daughter scolded me for asking so much for a silly little toast rack and I had to explain to her that it was a designer piece and worth every bit of what I was asking as a starting bid. She laughed and said I'd never get it. Right now I'm having the laugh and it's still got more time to go higher.

Now my point here isn't to brag about how much I sell my items on Ebay or elsewhere for. It's actually quite the opposite. When you do this as a business or even as a profitable hobby you want to stack the odds on your side as much as you can. Booth rent isn't cheap and neither is gas and your other selling expenses. You have to factor in the time it takes to sell you inventory and if you have storage costs because you deal in larger items like furniture you need to have a sizable markup to end up with a decent net profit. You have to realize that the only areas that you have a major say in this business equation is how much you pay for your inventory and how much you will take for the final sale price. You don't want to be devoting all your time to this enterprise and find yourself just breaking even or squeaking out a small profit. I don't know about you but I don't want to do this just so Ebay or the owner of the Antique Mall makes the lion's share of the money.

Are they really "THRIFT" stores anymore?

After church and lunch this past Sunday I decided to make a visit to one of the local Goodwill Thrift stores and take a leisurely peek. Now I am using the word Thrift loosely here because I really don't consider Goodwill stores to be thrift stores anymore. I think that most shoppers who browse their local Goodwill will notice that they're not quite like they used to be. I know from experience that 4-5 years ago I could dig through one of their stores and usually find some nice pattern glass or some decent dishes. Perhaps I would find a Dansk teak tray or bowl amongst the rest of the wood items and it wasn't even uncommon to find sterling silver thrown in with the rest of the flatware.

So what happened? I'll tell you. Goodwill woke up and figured out that they were all too often the middleman between the donors and the antique dealers that cruised the aisles looking for inventory for their booths or items to sell on Ebay. Apparently someone at Goodwill management decided it was time to quit being the middleman and they started to screen the items that were donated to them. I don't know how many of you thrift addicts know but in the back of every Goodwill store there is a big printed list of premium manufacturers names up on the wall and when the sorters work on the donations and see those names on an item they put those items in a separate bin headed for the "boutique". If you want to see the list just ask to use the bathroom which in many of the older stores is in the back room and you'll see it.

In most larger cities Goodwill has a separate store they put in a more upscale part of town and you will then find the better items sold in these "boutiques" at prices pretty close to what you'll find in an antique booth or even higher. They even have an on-line auction site for items they feel will sell better that way. Goodwill Online Auctions if you want to take a look. So now you know why when you go into a Goodwill store for the most part you'll look at "Made in China" marked on the vast majority of items for sale. Do I think this disqualifies them from using the word thrift in their store name? Part of me does and the other part knows that they're running a business like anyone else and the goal is to maximize their sales and profits and I just live with it. I will admit that I will no loner make a special trip into town to go to Goodwill because the pickings are so thin for a reseller that it's usually not worth the cost of gas. I must also point out that Goodwill isn't the only one guilty here of cherry picking their donations. Most "thrift" stores now either have someone working for them that has a fairly good knowledge of what are the better selling items or hires a consultant that comes in a few times a week to look things over and advise them on pricing of better items. For the most part the good old thrift store is a thing of the past. In some rare cases you will find a church or local charity based thrift store where you have a better chance of finding stuff that hasn't been pre-sorted.

So what's the solution here or is there one? I feel the best way to gain the advantage back is to be more knowledgeable about what is a premium item then the seller. This applies to any place where you look for inventory to sell. You have to do your homework all the time and research hallmarks, especially of European manufacturers which most "thrift" stores don't know well because let's face it few dealers do off the top of their head unless they are full time dealers and are looking over dozens of new pieces on a weekly basis. You absolutely must assemble a decent library of reference books for collectibles and especially glassware and learn as much as you can about European manufacturers. Knowledge truly is money when it comes to finding bargains for resale. I will devote an entire post (probably several) in the months ahead on learning more about harder to identify manufacturers that will improve your chances of finding items that will sell well.

So how did I do at Goodwill this past Sunday? Well I guess I got lucky or was just a tad smarter. I found 2 Waterford Crystal knife rests, a Stelton Cylinda toast rack designed by Arne Jacobsen, a vintage cookie jar of a dog marked USA which I haven't identified the maker yet but I'd bet it's going to be from a Californian Pottery maker. I found an original Disneyland California tray. Also a hand-painted vanity dish signed by the artist and a few decent books that I can sell in my bookstore. I'm going to estimate I will sell these items on Ebay and in my antique booths for somewhere in the $150-$200 range. My cost was around $10.00. So I will continue to duck into those "thrift" stores and buy their mistakes and pocket the profits.