 |
|
||||||
 |
|
|||||
 |
 |
 |
 |
 |
 |
 |
 |
|
|
||||||
|
|
|||||
|
|
|
|
|
|
|
|
|
#1
08-25-2012, 10:29 AM
|
|||
|
|||
dealing with shops and resellers
I am trying to buy a really nice Koufax from a guy who owns a shop and the offer I gave him he turned down. His reason was that my offer didn't get him enough profit margin on the item. I have a question for anyone who works with dealers or people who own shops
Typically how much profit.margin do you need when you buy or sell an item? 
|
|
#2
08-25-2012, 11:10 AM
|
||||
|
||||
|
I might be able to share some of my experience since I have been on both sides of the counter.
Back in the 1990s it was possible to run a shop on lower margins because you had much, much higher turnover. Because in general rents and other expenses are multiples of what they were back then, and turnover is much, much lower, shop owners are selling less stuff so they need higher margins. Most used book sellers without B&M stores around me try to make 200-300% profit on books. There is enough supply to warrant those numbers, none of them are getting rich as they have a lot of inventory to deal with. These days if I am able to turn 25-50% on a collectible in a short period of time, I'm happy. Really it depends on the item in question. For most items it's a buyers market so I tend to price a little high and negotiate down to what I really want. If the shop owner's Koufax is REALLY nice it probably deserves a premium. But Koufax balls are far from rare, check around some auction results at Heritage or Memory Lane and see what the market is...
|
|
#3
08-25-2012, 11:25 AM
|
|||
|
|||
|
There's no percentage rule. His expected return on the ball may be unique to him. If a dealer bought a large group lot and some items sell for profit, he might be able to sell some items at cost. A lot of dealers look at it at the strict $$ return, not percentage on an item. Some dealers may buy and sell at higher volume, so doesn't require has high a return per item.
Brick and mortar places have higher overhead than an online dealer. Used book stores are different as they don't pay $100 per book and probably a smaller percentage of their items sell. A dealer isn't getting Koufax signed balls for 50 cents. Also, many antique stores have items on consignment, and the guy may not have as much say over the pricing. If he expects too much for the Koufax, pass. You can find good ones online. Last edited by drc; 08-25-2012 at 11:35 AM.
|
|
#4
08-25-2012, 12:38 PM
|
||||
|
||||
|
Age-old rule of thumb: You need to double whatever you paid for it.
As others have said though, that's just a starting point, and you factor in other variables from there, including how long it takes to sell, how easy it is to re-stock, repeat customer relationships, etc. On non-unique items, usually the store owner will have some idea of the "market value" of the item and base his buying price on that. Unique items are often the other way around and may require more of a gut check: if there's only one and I have to pay $___ for it, will I be able to sell it for 2x $___ (or whatever margin you need). If you know you're offering fair market value for the ball (I'm talking actual FMV, not what lowball price you would like to get it for), and the owner won't budge on his price, he may be upside-down in how much he paid for it, have it on consignment, have a different FMV in mind, or just be stubborn. In the end, either you can arrive at a price that is agreeable for both of you, or you can't. In my experience, trying to convince him that he only needs 75% profit on this ball instead of the 100% profit he thinks he needs is not going to get you anywhere.
|
|
#5
08-25-2012, 02:18 PM
|
||||
|
||||
|
Quote:
FYI, a good estimate at what fair market value is for a signed Koufax ball is approx. $300, give or take. Buying an earlier vintage Koufax signed ball will definately add to the price. Beware of fakes as there are many. Do your homework to make sure you are buying a real one... 
|
|
#7
08-25-2012, 03:14 PM
|
|||
|
|||
|
Quote:
|
|
#8
08-26-2012, 09:26 AM
|
|||
|
|||
|
Quote:
|
|
#9
08-26-2012, 11:25 AM
|
|||
|
|||
|
You have to sell the item. A good seller knows you don't just put on any price and wait for it to sell-- you have to know the market etc. A good seller knows if he paid too much, the buyer doesn't care.
The double the buy price is also be related to what the seller would pay for an item knowing the market price, not just how much he automatically jack up the price no matter what he pays. The double the buy price would be a general rule, not an absolute one. when I used to sell baseball cards way back when, I liked a twenty to thirty percent return, but I had no overhead. A brick and mortar story can be a different situation. But also, as I often auctioned them, I didn't always have the final say in the percentage. I think the market was more less efficient, and you could more easily buy something low here and sell it higher there. If you applied yourself. Lastly, and I may have already said it, there's a big difference between buying Sandy Koufax UDA baseballs and used books. A price formula for one doesn't apply to the other. You might be able to X15 the price of a musty old paperback, while you might not be able to double the price of the Koufax. There are two used book stores near me that have been in business since I've lived here. I've always been curious about the logistics, where they get them, pricing, etc. As they've been in business so long, they must know their stuff. One in particular is filled with the musty old pulp paperbacks-- no expensive fancy signed first edition types . . . One thing I always wonder about is I live in urban Seattle and the storefront rent for both places has to be expensive. Last edited by drc; 08-26-2012 at 11:48 AM.
|
|
#10
08-26-2012, 11:53 AM
|
|||
|
|||
|
One last note (I promise. No really), as a seller I would never tell anyone what I paid for something, even when asked. That was private information. All that mattered was whether or not the potential buyer liked the sell price.
Last edited by drc; 08-26-2012 at 12:07 PM.
|
|
#11
08-27-2012, 09:31 AM
|
|||
|
|||
|
Quote:
|
 |
|
|
Linear Mode
