What’s your best price?
There are as many different pricing structures as there are different types of retail stores. I don’t think there is any right answer. You must find either an industry standard or just use what works for you. Some examples of industry standards would be, jewelry can be marked up to 800%, clothing to 500%, white goods and electronics 10 to 20% and so forth. With antiques, it’s not this easy.
I think people tend to place antique stores and thrift type stores in the same basket because they both sell pre-owned merchandise. Unlike a thrift type store where the inventory is usually donated items (and the profit is 100% no matter what price is set per item), the antique store must purchase its inventory which has both good and bad aspects. The good aspect is the antique store can be much more selective of just what inventory it has in stock. The bad would be that nothing is a fixed price as you would buy from a wholesaler and each and every price for every item must be negotiated with the seller.
Everyone wants to purchase products at the best possible price. We try to negotiate on everything from cars, to boats, to homes, to services. There are some stores, such as a grocer, where the price is fixed and you have to make a choice. Do I just buy the item at the marked price, or do I wait for that item to go on sale?
Stores that sell new inventory at fixed prices usually will have the option to put items on sale. This is because companies such as chain grocers, purchase at a wholesale price and in larger quantities or because the components or ingredients that make up the item have a price fluctuation themselves. They also put an item on sale to encourage business, because they know the person who comes in to buy the sale item, will usually purchase more than just that one item. This is called a loss leader.
Every business has expenses or a cost of doing business. Rent, insurance, phone, internet, inventory, payroll, credit card fees and advertising to name a few. In addition to these your local antique store must include the cost of fuel to acquire items as well as supplies to affect any repairs or cleaning to the items. Then there is the cost of the business owner’s time.
Time is one of the expenses we all have, that many people overlook. It takes time to find the item, to negotiate the price, to transport it back to the store. Time to research its history or value, time to clean or repair the items, time to price it and time to display it property in the store to optimize its chances of selling. It is difficult to calculate what all this time is worth, when we price each individual item in the store or booth.
In order for a business to be successful, the profit must be greater than the expenses. It seems easy enough, but for one thing. “Hi, what’s your best price?”
We want to be validated and in business that means having customers purchase the items that you worked so hard to assemble or collect. Remember when we said everyone wants to purchase products at the best possible price? Store owners want to sell products at the best possible price. Here is where it gets tricky for the retailer.
We want to be accommodating and sell our items because we need to earn that profit in order to stay in business, but we are afraid that people won’t purchase our items if they don’t like the price. Sometimes this leads to underpricing and not making enough to cover expenses. There is a tongue in cheek saying in the antiques industry, “Buy high, sell low, and make it up in volume.” Trust me, It doesn’t work.
The choices are to either try to haggle out a price that will allow you to make as much profit as you can and still get the customer comfortable enough to purchase your item, or to try to delicately explain that your feel your prices are fair and that you just don’t have any room to maneuver on that items price and hope they will still buy.
It is the proverbial “Between a rock and a hard place” situation many times.
It is difficult to try to figure out why a customer doesn’t buy. Is the price too high? Well sometimes, but it might be other factors. Maybe they don’t have the disposable income that day. Maybe it’s the wrong color, or size. Maybe they don’t purchase because they want to either think about it, or to bring a partner in to look at the item and decide then. Most customers, won’t tell you why they are not buying. They are rarely that direct. You can ask, but they probably won’t give you the real reason.
Owning a business is a difficult task. You are everything from bottle washer to cook. The antique store owner wears many hats. He must know his products, take care of the pricing, inventory, advertising, store merchandising, cleaning, transport, bookkeeping and more! It is a great commitment of time and energy and they do it all because they love what they do. But even though someone loves their business, it all comes back to earning that profit to keep the business open.
So, the next time you are haggling for your next item, remember everything that had to happen to align the stars to place that item in front of you at that time and place. If you enjoy the store, and want to support it so it sticks around, maybe the price on the tag really is “the best price.”