RINKER ON COLLECTIBLES — Column #1576
Copyright © Harry Rinker, LLC 2017
Retail Industry Problems and Their Impact on the Antiques and Collectibles TradeThe sales portion of the antiques and collectibles industry is essentially a retail business. Antiques and collectibles offered are one-of-kind only in the sense that the seller has only one or two examples in inventory. Multiples, often numbered in the hundreds or thousands, exist in the hands of other sellers in the trade. Pricing is not as fluid as it appears. The trade quietly enforces a narrow range of acceptable asking prices for an object. Negotiation replaces discounting, albeit discounting is becoming a way of life in some antiques and collectibles flea markets and malls. Whether part time or full time, selling antiques and collectibles requires a myriad of business practices such as advertising, inventory acquisition, inventory management, overhead, supplies, and more.
Successful antiques and collectibles sellers embrace the above. These sellers understand that developments in the general retail industry can and do impact the trade. Understanding them is a key to survival. The antiques and collectibles business does not exist in isolation.
Kate Taylor’s “3 problems that crushed the retail industry are now hitting restaurants” in the February 8, 2017 “Business Insider” identified three issues that can be used to identify trends within the antiques and collectibles retail sector. Her three points are: (1) food service traffic is declining due to the rise of online shopping; (2) the bargain hunting habit that was fueled by the 2008-2009 Great Recession continues; and (3) the United States is over-retailed. [See: http://www.businessinsider.com/retail-industry-problems-hit-restaurants-2017-2]
A June 8, 2016 article by Laura Stevens in “The Wall Street Journal” and a Madeline Farber story in “Fortune,” also on June 8, 2016, reported that a survey of 5,000 online shoppers revealed that they bought 51% of their purchases online. The story also reported the increasing use of smartphones to make purchases. Do not read too much into this. This was a survey done of online shoppers, individuals who already were accustomed to buying online. What this demonstrates is that once a person becomes used to shopping online, he/she is likely to do more online shopping.
Remember when eBay was the 600-pound gorilla in antiques and collectibles retail? Not content with its role in antiques and collectibles sales, eBay decided to tackle the wide world of general retail. eBay challenged Amazon. eBay lost. Amazon is today’s 600-pound gorilla. At first glance, Amazon does not appear to be impacting the secondary antiques and collectibles marketplace. When doing an internet search for specific antiques and collectibles, more and more first page hits are for examples available for sale on Amazon. This is a trend worth following.
In terms of overall online retail sales, the U.S. Census Bureau News announced that e-commerce sales for the fourth quarter of 2016 were estimated to be $102.7 billion, an increase of 1.9% from the third quarter of 2016 and 14.3% from the fourth quarter of 2015. Total retail sales for the fourth quarter of 2016 were estimated at $1,235.5 billion. E-commerce accounted for 8.3% of sales. [See: https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf] If you question what impact losing 8.3% of sales to online has on brick and mortar retail visit a local shopping center or read the newspaper. Store and even business closings are a regular feature of daily news.
The pie chart for antiques and collectibles retail is facing another radical change. Each time a new sales venue arises, other sales venue portions of the pie chart shrink. The 1980s arrival of the antiques mall directly impacted the portion previously assigned to antiques shops. eBay disseminated the portion assigned to classified advertising. eBay also shrank the percentage of the pie for auctions and antiques and collectibles flea markets, malls, shops, and show.
Eliminating the percentage of antiques and collectibles sold on eBay, down from a high a decade ago, the percentage of online sales is minimal. Assuming this will stay this way is a mistake. Once enterprising antiques and collectibles sellers identify successful online sale methods, they will be quickly adopted by other sellers.
As the antiques and collectibles industry becomes more niche market focused, individual seller websites are growing. Antiques and collectibles sellers on Instagram report success. I have not heard similar reports from Esty sellers. Storefront websites such as Rubylane.com continue, albeit most items listed by its sellers are at full or close to full retail.
Expect to see a rapid growth in online antiques and collectibles sales over the next decade as auctioneers, estate sale promoters, antiques and collectibles mall owners, and others identify how to use the internet to their advantage. The online sales venue is fraught with danger, largely from sellers who have no idea what they are selling or do not care. Despite this, there will be individuals who will build it (online venues where antiques and collectibles are sold), and people who will come [with apologies to Kevin Costner].
Traditional antiques and collectibles sellers frown on discounting. They feel discounting conveys the concept that the value of antiques and collectibles is not what sellers are asking. Their quiet discount negotiations, given only to other dealers and their very best customers, are not viewed as contradictory to their basic principle. Many antiques and collectibles show promoters forbid any discount signage at a show. Mall owners and managers held firm at first, eventually agreeing to discount sales two to three times a year.
As of March 2017, bargains abound in the antiques and collectibles field. Today’s prices often reflect 1970s and 1980s prices in many collecting categories. Cheaper than new is a reality. Prices have bottomed out since the price decline following the 2008-2009 Great Recession. While there has been occasional upward movement in some select collecting categories, prices are stable and likely to remain so several years into the future.
Given this, why are sales not better? The answer is the antiques and collectibles field has no unified voice. It is a field of highly independent individuals who prefer to do things their way rather than work for the common good. What is needed is a united voice. Everyone in the trade should tout the current affordability of antiques and collectibles.
There is an important caveat. Sellers must remain neutral regarding the reason behind the purchase. Most sellers would prefer to promote the collecting of similar objects. Only a small portion of today’s buyers are collectors. The trade sells more items for display or use than collecting. Why a person buys something is their own business.
Over-stored, the third point, is never discussed in the antiques and collectibles trade. The trade always has been an inexpensive business startup for the part time and weekend seller. Minimal capital is required – a car trunk or the price of a flea market table or booth to hold unwanted objects found around the house or inherited. Education and business acumen are learned on the fly.
Show promoters, who are begging for dealers, find it hard to accept an over-stocked argument What they seek are traditional dealers, a dying commodity in the second decade of the 21st century. This pool will continue to shrink. New sellers will gravitate to digital sale venues.
eBay offered the opportunity for anyone to become an auctioneer. The concept worked initially. Unknowledgeable sellers creating continuing legal problems was one of the reasons eBay closed is Collectibles Division. It is time to end the myth that the antiques and collectibles business is amateur night in the sticks. Selling antiques and collectibles is serious business as well as fun.
If the antiques and collectibles business is going to successfully transition a portion of its sales to online, it needs entrepreneurs who are (1) tech savvy, (2) knowledgeable about their products, and (3) skilled in business practices. A great deal of experimentation is required. There will be more failures than success. Ultimately, a set of good business practices will develop.
Finally, all is not gloom and doom for the antiques and collectibles trades traditional sale venues. The Darwin principle of survival of the fittest applies. The strongest auctioneers, flea markets, malls, shops, and shows will survive. Some may be smaller than they were initially. But, they will be better.
Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the twentieth and twenty-first centuries. Selected letters will be answered in this column. Harry cannot provide personal answers. Photos and other material submitted cannot be returned. Send your questions to: Rinker on Collectibles, 5955 Mill Point Court SE, Kentwood, MI 49512. You also can e-mail your questions to email@example.com. Only e-mails containing a full name and mailing address will be considered.
You can listen and participate in WHATCHA GOT?, Harry’s antiques and collectibles radio call-in show, on Sunday mornings between 8:00 AM and 10:00 AM Eastern Time. If you cannot find it on a station in your area, WHATCHA GOT? streams live on the Internet at www.gcnlive.com.