'When to Spend More for Inventory'
by Lynn Dralle, The Queen of Auctions
While I was out garage saling with Indy, we stumbled across the amazing moving sale I was talking about in the introduction. Everything was quality and most of the items were made in Europe. The prices were fair. Not cheap, but not over the top. This is when you have to take a deep breath and weigh the pluses and minuses of purchasing higher end items.
Whenever I talk about pluses and minuses, my mom always reminds me to do a Ben Franklin. What in the world is a Ben Franklin you may be asking? Here it is according to Ben Franklin himself:
My way is to divide half a sheet of paper by a line into two columns; writing over the one Pro and over the other Con. Then during three or four days’ consideration, I put down under the different heads short hints of the different motives, that at different time occur to me, for or against the measure.
When I have thus got them altogether in one view, I endeavor to estimate their respective weights; and where I find two, one on each side, that seem equal, I strike them both out. If I judge some two reasons con equal to some three reasons pro, I strike out five; and thus proceeding, I find where the balance lies; and if after a day or two of further consideration, nothing new that is of importance occurs on either side, I come to a determination accordingly.
This is great advice for long-term serious decisions. However, when you are at a garage sale you can’t take 3-4 days to make your decision! You must make a pro/con list very quickly in your head.
Here is the pro/con list that did in my head for that expensive purchase. I have actually written it down for your learning enjoyment.
Please notice that the pro side is much heavier weighted than the con side. When I asked Mo and Carmen to look at the sheet of paper they said, "We don’t even have to look. Of course the Pro side is more heavily weighted " But let’s look at this in more detail and see why it was more heavily skewed to the Pro side.
Pro #1. Would raise average sales price.
It is our goal at the Queen of Auctions to raise our average selling price. It is ALMOST the same amount of work to sell a $100 item as it is a $10 item. So we have been striving to raise our average ticket price from $18.22. If I bought these expensive items, our average sales price would benefit.
Here is one of those higher priced items that I got listed. I paid $25.00 for this item.
See the listing here.
I bought four of these wonderful needlepoints and paid $100 for all four. One of the four was of a Pug dog. Indy wants a dog so badly and her choice is a pug. Well, with our hectic life, there just isn’t room for pets so I appeased her (at least for this week) with gifting her with the needlepoint.
I wasn’t sure how to price the remaining three. If I still had all four, I probably would have started the auctions at $49.99, but I only had three, so the price is higher.
Pro #2. High Quality & Great Brand Names will drive traffic to our exiting listings and our eBay Store.
Waterford Crystal, Villeroy & Boch, Wade, Spode and the other great brand names will come up higher in the Google and eBay searches than generic items like the one listed below. With no brand names the listing is quite generic.
Here is an example of a generic listing.
Pro #3. A Good Investment.
My grandmother always bragged to me that her inventory was worth more tomorrow than it was today. As she explained to me, this was in direct opposition to most retail establishment’s inventory. Most of their inventory would be worth less tomorrow than it was today.
As an example, a clothing store’s inventory has a very short shelf life. The styles change very quickly and if those items aren’t sold when the style is in fashion, they will be marked down and sold at clearance quickly. No increase in inventory value in the fashion industries. Or for that matter in the perishable goods industries. Is a gallon of milk with an expiration date of 12/4/11 worth more on 11/15/11 or on 12/5/11? It is worth nothing on 12/5/11.
Here is an example of an item that got better with age. It was a Christmas ornament that we bought from Midwest of Cannon Falls brand new from the company in 2000. We paid $4.75 and it was for sale in our antiques store for $9.95. It is worth more today than it was then and just sold for a great price at auction.
See this listing here.
Pro #4 Better ROI than the bank.
With interest rates at an all time low, no great opportunities to make money in the real estate market for several more years, and the stock market in flux, investing in antiques and collectibles can make a lot of sense. You just need to be very careful and KNOW your subject matter.
This set of 34 pieces of Waterford that I bought for $850 will make me a much better Return on Investment (ROI) than the bank, the current real estate market or the stock market.
Pro #5. Fun.
What can I say? I know you all get the FUN factor of this business. When I bring boxes and boxes of new easy-to-list merchandise into Headquarters, we all love it! Well, Mo and I love it. Sometimes Carmen gets upset that we are messing up her neat and clean floors in the front office. (Just kidding--kind of sort of .)
And, if you can believe this one...we couldn’t. But today while Mo was getting the Villeroy & Boch dinnerware set ready to list, she came walking in with a tumbler in the same pattern! I had bought a set of glassware about six months ago that came in with some Pfaltzgraff dinnerware. I thought it was Pfaltzgraff.
Mo couldn’t find the Pfaltzgraff pattern for the glassware anywhere so she just left it in a box in the photo studio area. When Mo was photographing the dinnerware, she looked at the glassware and came walking in with one of the tumblers. OMG! It was the same Villeroy & Boch pattern, but in glassware. A total score and so much FUN! I had 16 pieces of that glassware that listed for $29.99 each on Replacements. Ka-Ching!
Here is one of the glasses that Mo couldn’t wait to list.
Here is one of the matching dishes.
Amazing, isn’t it?
Pro #6 Kabbage Kash.
If you haven’t signed up for Kabbage yet, I highly encourage you to get approved before you need the money. Because I knew that I had an open cash advance line with Kabbage, this helped make my decision easier. The $1900 I needed for this awesome bunch of stuff will cost me about $76 over the next six months. I will more than double if not triple my initial money on this investment-even taking into consideration the $76 fee.
And now the cons.
Con #1 A lot of $ to tie up in Inventory.
In this economy, $1900 is a lot of money to invest in anything...even inventory. I would need to turn this merchandise as fast as I could. After I bought the Waterford on Saturday morning, I had to watch Houston’s baseball showcase until 8 pm at night. No chance to list the Waterford on Saturday.
On Sunday, the baseball showcase started at 7:30 am and went to 1:00 pm. After taking Indy and a friend to Joanne’s fabrics to get supplies for a school project, I was finally free to rush to my office by 3 pm on Sunday. I was able to get all of the Waterford listed by Sunday night. There is nothing like a large dollar investment to get you listing like crazy. Hey, that could actually be a pro .
Here is one of the rarer wine glasses that I listed.
I was able to price this glass quickly using Terapeak. My research on Terapeak told me that one of these wine glasses just sold for $149.99. I priced mine higher in my eBay store and one cheaper at auction.
Con #2 I already own vast Inventory.
As you may recall, my vast inventory is known as The Alps. It can’t be called just one mountain because it is definitely a range of mountains.
This was the biggest reason for stopping me in my tracks at that moving sale. And I reflected back on what Marcia Glenn had to say on a Queen's Court post entitled "Help, I am drowning in Future Money."
I Can't wait to hear what the Diva has to say in our Organizational Teleseminar November 9th!!
I would say to all of you who are "drowning in future monies" to STOP buying. If you do not have 90% of your inventory listed you are wasting time and money buying more! Selling on eBay like we do is a crutch for some who are "shop-a-holics."
There will ALWAYS be something new to buy EACH and every WEEK.
Be realistic. If you have 100 tee shirts to list and you can list four an hour (take pictures, edit pictures, write up paperwork, measure and finally list) then it will take you 25 hours to list all the tee shirts. Doing an eight hour day? Then four FULL days to list. So change the numbers to fit what you can realistically do for whatever categories you need to list.
Now stop crying.
NOW sit down and start working on it. Your inventory should be bought and ready to list for the holiday season. It should already be listed.
I have said this before. Treat this like a BUSINESS. You will succeed.
All brick and mortar stores now are stocked up for the holidays. We all bought all summer long into fall. The gift shows were in AUGUST for CHRISTMAS.
Yes shopping is the "fun" part. Yes, writing up and measuring and pictures is the not so fun part. But, clicking PayPal and transferring money into your checking account is the reason you do this.
Take a Kleenex, wipe your nose and eyes and get your inventory listed!
I'm just trying to help guys, truly.
Lincoln City, Oregon
Ocean Beach Treasures
Marcia is spot on! I loved her post. However, I have been listening to Diva Dawn (my organizational expert) and have already unpacked fourteen boxes from the alps. I deserved a reward! Didn’t I?
Speaking of Diva Dawn and the teleseminar listed in Marcia’s quote, Diva will be joining us for a Q & A about workflow and organization on November 9th at 5 pm. If you are a Queen's Court Member this is your gift for November.
This is Diva's garage. Not The Alps.
If not, you may purchase it here. Email your questions ahead of time to Lynn@thequeenofauctions.com. Don’t worry if you can’t listen live, it will be recorded for you to download soon after. I personally can’t wait to hear Diva Dawn as she ALWAYS motivates me.
I hope that this article on making buying decisions using a Ben Franklin will help you in your business. It has helped me in mine!