How Do Antiques Dealers Price Their Items?

 

QUESTION: I’ve always wondered how dealers decide on the price of an antique. Sometimes, the prices seem deliberately inflated. And at other times, they seem downright cheap. What governs pricing in the antiques business?

ANSWER: That’s a great question. Most of the time, collectors dwell on the value of an antique. They usually don’t think about the price, unless it has a direct relationship to that value. 

The important thing to remember is that buying and selling antiques is a business. And just like any other business, dealers have overhead—if operating a shop, then electricity, heating, phone, and other utilities; if selling at shows, then the booth fee, advertising, etc. 

The key to making a profit in any retail business is to buy low and sell high. Most dealers mark up the price of their antiques by 50 percent over the buying price. But the higher the buying price, the less they can mark items up. High-end dealers selling antique for four to six figures often only use a 20 percent or less mark up. In this case, they need to sell the item quickly to make enough turnover to make a profit.

But a lot of dealers have antiques inventory that’s been in their shops too long. The longer an item remains unsold, the less the dealer makes on it because unlike the static price of an antique, the cost of running a business continues to change. 

And what about sales and bargaining? Many antiques dealers will bargain with a customer over the price of an antique. They know how much they must make on the item and won’t go below a certain price. Bargaining lowers the mark up and cuts into overhead costs.

Some antiques dealers, much like other retail business owners, will occasionally have sales to move merchandise. But don’t expect deep discounts on these items. Remember the mark up. Usually, sales bring customers into the shop who most likely will find something else that they like and buy that instead. Or they may buy several smaller items.

Generally, the higher the prices of the antiques, the less likely a dealer will bargain much for them. And those same dealers will not have sales.

Unlike antiques dealers who operate shops and do shows, flea market and antiques mall dealers usually deal in much smaller and less expensive merchandise. They’re more willing to bargain the price down a bit to make a sale. And often will lower prices on items that have been in their inventory for too long.

Antiques are such subjective items that prices vary tremendously depending on demand, current trends, and rarity. Prices can vary from dealer to dealer, so it’s difficult to compare the price of one piece with that of a similar or identical one. Antiques appreciate over the long term. Like the stock market, antiques rise and fall in value depending on demand and trends.

So how do antiques dealers ultimately figure the price of the items in their inventory? First and foremost is what the dealer paid for the item. Obviously, the higher the original price, the higher the retail price. And thanks to T.V. shows like The Antiques Roadshow and Pawnbrokers, the buying public has an inflated idea of what an antiques value actually is. 

The value of an antique is what someone is willing to pay for it. So the value is essentially what the last person paid for the piece. Values for high-end pieces usually result from auction sales while those for lesser valued collectibles may result from books dealing with a specific category of collectibles such as Depression Glass or world’s fair collectibles. While the prices of the former are kept in proprietary, subscription-only databases, those of the latter are available to the general public. And then there are auction/buy-it-now sites like eBay online. 

And many antiques dealers consult online auction results and other sites to determine what the going rate will be for the items they’re pricing. 

Finally, dealers add the percentage of markup, determined by the amount of their overhead and what their local market will bear.

One of the reasons many antiques sell for many times over their auction estimate is that many live on-site antiques auctions now include phone bids while many online auctions allow bidders to bid in real time. These phone and live online bids now come from anywhere, thus the final selling price of the item isn’t affected by the local market.

So the next time you’re out antiquing and come across that piece that you just can’t live without, remember the complexities of antiques pricing. And if you can purchase the piece for a reasonable price in the end, all the better. 

To learn more about what it’s like to start your own antiques business, read How to Start a Home-Based Antiques Business.

To read more articles on antiques, please visit the Antiques Articles section of my Web site.  And to stay up to the minute on antiques and collectibles, please join the over 30,000 readers by following my free online magazine, #TheAntiquesAlmanac. Learn more about railroad antiques in "All Aboard!" in the 2021 Summer Edition, online now. And to read daily posts about unique objects from the past and their histories, like the #Antiques and More Collection on Facebook.

Managing a Collection

QUESTIONS: I love collecting things and have been doing it a long time. But I now find I really don’t know exactly what I have. Can you give me some advice on how to manage my collections?

ANSWERS: Lots of people collect things, but unfortunately that’s where it stops. They love the act of collecting but do nothing to manage their collections. Collecting things can be addictive. And over time collections can become so large that people lose sight of what they actually have. To truly enjoy the entire collecting experience, it’s necessary to do three things—organize, document, and curate. 

Private collections often start with one or two items—perhaps a unique old lamp or an old crock. At first, a person will treasure a few objects and know their every feature. But as the objects multiply, they’ll forget where they found an object or anything about it.

The first step in managing a collection is to organize it. This can be as simple as displaying the objects in an attractive way or in groups by subject matter. If the objects aren’t placed on view, neither the collector nor his or her family and friends will get to enjoy them. Some people purchase expensive display cabinets for to hold their collections. Those with glass doors are especially good for small to medium-sized delicate or fragile pieces or those that are more valuable. Larger objects may have to be displayed on open shelves or in other ways. It’s important to allow room for the collection to grow. If most of the collection cannot be displayed, then it may be time to stop. Some collectors rotate their collections, so they can enjoy different pieces.

It’s also a good idea to display smaller groups of objects together in different locations within a home. Viewers can be overwhelmed if an entire collection appears together.

The next step in managing a collection is to document it. Taking an inventory of a collection is imperative for several reasons. A collector needs to know what’s in his or her collection, as well as the relative value of each piece. While this will increase or decrease over time, it’s good to have a general idea what a piece is worth.

Cataloguing a collection can record the details about each piece, document the artifacts for insurance, and form a framework to keep similar objects together. It’s also important to know where an object came from.

Some types of documents may already be available, or can be easily acquired, such as sales receipts, a note accompanying a gift, a snapshot, a printed description, a program from an exhibit, biographical information on the artist or maker, a description and picture of a similar object perhaps from a newspaper, magazine, or the Internet, and a copy of a mark on the object. 

If an object has been passed down within a family, then its family history should be noted—who first purchased it, who owned it and when. The objects in specialized  collections— furniture, dolls, quilts, kitchen utensils, guns, tools, even sports and music memorabilia—are prime candidates for documentation. Documentation is important for  insurance, family heritage, preparing for appraisal, certain types of tax benefits, and connoisseurship.

In case of theft, loss or damage by fire, flood or national disasters, you need to prove ownership of any object claimed, and provide descriptions with supporting information in order to be compensated or to help the police identify and recover your stolen valuables. 

There are three ways to catalogue your collections. All of them are rather simple. The first uses standard 3 x 5 or 5 x 8-inch cards and a notebook, or logbook. Another uses a three-ring binder with dividers for those who wish to keep all the information under one cover. The third way is to create a computer database. Some collectors record the information about each object on cards first, then transfer it to a database later. 

To keep everything in order, each object must be given a sequential number, beginning with the earliest to the most recently purchased. This number should appear on the object, on the card or in the logbook, and on every receipt, canceled check, and photograph that relates to it.

Although simple numbers will do, a three-part number is more useful because it includes the year the object was acquired and the source. Individual items purchased at the same time from the same source will thus each have this number.

Curating a collection is just as important as collecting the objects in it. Everyone knows museums have curators, but do they know why? While organization and documentation are important jobs of a curator, taking care of objects in a collection is just as necessary. This may be as simple as dusting the objects from time to time. But sometime it’s necessary to repair or restore an object because of breakage or environmental hazards like humidity. 

Thoughtfully arranging a collection is also part of a curator’s job. A collector can assemble a mini-exhibit based on a theme and invite family and friends to view it. Protecting objects in a collection from harm is another job of a curator. And once a collection gets large enough, it’s the curator’s job to refine it, culling out earlier not-so-good pieces and selling them to replace them with better ones.

And last but not least, it’s important for a collector to learn all he or she can about the objects in their collection, not just what they already know but additional information about objects in that category. 

To read more articles on antiques, please visit the Antiques Articles section of my Web site.  And to stay up to the minute on antiques and collectibles, please join the over 30,000 readers by following my free online magazine, #TheAntiquesAlmanac. Learn more about "The Ancients" in the 2021 Spring Edition, online now. And to read daily posts about unique objects from the past and their histories, like the #Antiques and More Collection on Facebook.

Organizing Your Collections

QUESTIONS: I love collecting things and have been doing it a long time. But I now find I really don’t know exactly what I have. Can you give me some advice on how to organize my collections?

ANSWERS: Collecting things can be addictive. And over time your collections may become so large that you lose sight of what you actually have. Organizing your collections is important if you’re to truly enjoy them.

Private collections often start with one or two items—perhaps a striking old photograph or an old vase. You treasure a few objects and know their every feature by heart. As the objects multiply, however, you’ll  forget where you found an object or what its history was. Cataloging of your collection can record those details, document the artifacts for insurance, and form a framework to keep similar objects together.

Collectors have a common need to know what they have and where they got it.

There are three ways to catalog your collections. All of them are rather simple. The first uses
standard 3 x 5 or 5 x 8-inch cards and a notebook, or logbook. Another uses a three-ring binder with dividers if you prefer to keep all the information under one cover. In either case, no special materials are needed; cards, notebooks, and binders are available at any office-supply or stationery store.

The third way is to create a computer database. You can begin by using the cards you prepared above, then transferring the information to a database later.

The first step in any classification system is a catalog number, which will appear on the artifact, in the logbook, and on every receipt, canceled check, photograph, or card that relates to it. The number is the essential link between your records and the item.

The objects in your collection should be numbered in sequence in the order in which you acquired them. Although simple numbers will serve, a three-part number is more useful because it includes the year the object was acquired and the source. Individual items purchased at the same time from the same source will thus each have this number.

It’s a good idea to record the numbers consecutively in the logbook as soon as you assign them. Include in the entry basic information about the source, a brief description of the object, and the price paid for it. That information, along with the receipt or canceled check, can be used to document a claim if a part or all of the collection should be damaged or destroyed. The log should be stored in a safe place and updated regularly.

Next Week: More on organizing your collections.