Maintaining A Competitive Edge
inFebruary 28, 2008 - 9:44am
The factors that can affect a shop's bottom line are many including the state of the economy or changes in consumer habits. These factors are generally beyond a shop owners control but there are simple and cost efficient steps a shop owner can take that can make a significant difference in the overall success of their shop. Regardless of the type of inventory you offer, a little investment of your time and attention can make a difference in the perceived quality or desirability of your items to customers.
Everyone wants to sell, or they wouldn't have stocked a shop in the first place. But some are more successful than others; even if they are offering similar merchandise at similar prices, so obviously there are some aspects to running a successful shop that not everyone is aware of. The one thing that can probably be said about any highly successful shop is they have taken the time to know their market.
Do you read commercial publications that reach a demographic that match the type of item you sell? For dealers in vintage collectible or artisan jewelry this can mean picking up copies of magazines that cover new fashion trends. What are the hot colors for spring? Are chunky bracelets in? For antiques and collectibles dealers, or those who deal in Fine Art, getting a feel for what young customers just entering the market are likely to be looking for is one of the best ways to secure sales over time. In other words, know your market.
Pricing is also an important factor in successful marketing. Remember this, prices tend to fluctuate. Maybe you priced an item in your shop at $50 because your three-year-old price guide had it valued at that price. But maybe the item is actually being sold in today’s market for only $30 due to over-supply or lack of demand. Without taking the time to check the current market price for an item, the one you have listed may languish in your shop because savvy buyers perceive it to be over-priced. The opposite can also be true. Just because a type of pottery is common where you live, for instance, doesn't automatically mean that buyers elsewhere won't appreciate it more than buyers in your own locale.
Knowing what items are currently “hot” sellers and what is predicated to become “hot” in the near future is important, but knowing what is fast falling out of favor is just as important. Knowing what might be dead in the water stylistically, or what might be suffering from a sudden loss in popularity for social or other reasons, can make all the difference between a making a quick sale or parking the item in perpetual storage. Societal considerations can be especially important when it comes to 'fads'. The Bandwagon Effect is a market force that causes the price of an item to spike because of sudden increased demand from a larger than usual number of motivated buyers. This phenomenon may last only a short time while interest remains strong, or it can persist for an extended period. But inevitably the market for this type of item will usually slump. Dealing in fad items can be equated to playing the game of musical chairs. If you don't listen carefully enough to the music, you might be the only one left standing when the music stops, with an armload of merchandise that no one is particularly interested in anymore.
Reading trade publications and observing local sales or perusing the auction house sales results can help you to spot trends in the making. This will enable you to gear your own buying habits towards a specific type of item, and allow you purchase the items well before the prices rise and with an acceptable profit margin at resale. Interior decorating magazines can be useful, for the same reason. Are rustic folk art items still in demand? What style of furniture is popular?
Being aware when a price is too high when buying inventory will also help your bottom line. As will taking a more calculated approach when purchasing stock, and it may even reduce some of the uncertainty about selling. And sure, the right buyer might come along without your help…eventually, but the odds are better if you pay attention to demographics and trends, and know your market.