“Spirit of the Past Antiques” February Newsletter
Chapter One: “Making Money”
Hi everyone! This WILL end up about half a book, so much to talk about! I apologize if it gets a little long, or if I cover things I’ve said before.
January sales were down. Dealer sales ended just above 2x rent, around 2.2. That falls short of the goal of 3x rent, and represented the first time we failed to increase from the month before since September. Debi and I had been concerned there would be a decrease in sales in January. We believe it will be a natural occurrence. Our “trends” have followed those of most retail stores…and actually differ from the typical antique store. We found December’s Christmas shopping to be strong. It will be a hard month to repeat and may be our best month for, oh, one or two more months before our natural growth catches up to it.
Likewise, January followed the same “retail” pattern of lower sales. If these patterns continue we can expect very good sales in February and March. The next two months are “tax return” season and shoppers should be able to afford higher ticket items. We’ll see. I’m (Dan) betting from past experience in retail that I’m right. Seriously, I am betting on it. We’ve brought in a great deal of furniture expecting to see higher investment items sell well over the next 60 days. (More on this later)
On a related note, I had a conversation today with a dealer about what can be done to increase sales. I have to say that I get thrilled when folks make every attempt to create as much sales success as possible. Debi and I DO NOT want to make a living collecting display rent checks from people who are not enjoying good return on their investments and efforts.
Before we opened the store, Debi and I had never been dealers in our lives. In fact we’d never owned a store of any kind! But over the last eight months or so (most of which we’ve been open and more still learning the ins/outs and preparing the store) we’ve learned much from 50 hour weeks in “Spirit” and our research and that experience led us to enjoy our personal best month of sales in January…despite it being a slow month! I’m mentioning that not to brag, but as a precursor to some suggestions I would make to anyone investing in display space in “Spirit”.
First, the average antique mall sells (turns) about 10% of its inventory in a month. Our own inventory turns slightly higher than that rate. That means that if everything you sell is priced right, displayed right, and is desirable merchandise, you can expect 10% or slightly better to sell. If you stock $1,000 in inventory…you should expect $100.00 in sales in a month.
IF you are achieving that turn, and yet struggling to profit because rent seems too high, or price of product is too high, then you have options available that can help.
Increase inventory. A $60.00 shelf unit has 40 sq. ft. of space. That is five 2 ft by 4 ft shelves. The top and bottom shelves are difficult because they are 2 ft. wide and merchandise is hard to display, it gets lost in the back. There are ways around this by placing larger items on top…or lowering the height of the top shelf. The bottom shelf can be used to display wider products. But even if we FORGET ABOUT those two shelves entirely…we’ve still got 24 sq. ft. of display space. Let’s say we desire to sell THREE TIMES our rent of $60.00, or $180.00.
24 sq. ft of shelf, $18.75 every 6 sq inches, can we accomplish that in inventory? Not with $1.00, $2.00 items which take up too much space. Examples that fill about 6 sq inches and that sell for $18.75 or more? Coffee grinders, oil lamps, primitives, art glass, even two or three sets of salt and pepper shakers will fit in 6 sq inches and combined can easily sell for close to $18.75! Averaged with the oil lamp that takes up 6 sq inches and sells for $30.00 and it all works out.
So it is about a large enough amount of inventory, number one. If a dealer fills the three middle shelves with a total of $1800.00 inventory, and manages to fill the top and bottom shelves with half that, or another $600.00. That’s $2400.00 inventory. 10% turn and surprise, the dealer has grossed not 3 times rent, but FOUR Times rent!
Cost of goods is another concern of course, that is an area dealers need to answer for themselves but a common goal seems to be buy for no more than 1/3 what you plan to sell that same item…and frankly 1/3 may be a bit high. There is something about cleaning up a vintage or antique piece, and putting it in a retail environment that seems to magically increase its value! The truth is, it is the hard work and determination that dealers exhibit to gather valuable items into one location for ease of shopping which is the true magic. Between gas and time spent locating items, and the effort to research and price them, then display them, expecting a reasonable profit margin is completely fair.
Large enough inventory and then if sales fall short of the 10% turn?
The first thing to look at is how your items are displayed. Have you done anything to attract the shopper’s eye? Bright colors, linens, anything to draw attention can only help get your product noticed. Next is cleanliness. Are your products cleaned? Are your display areas cleaned? It is in the lease that Debi and I clean the common areas, and that cleaning display space is up to the dealer. There is a reason for this as if Debi and I spend every day cleaning, and it would take every day, we simply can’t do the job of selling your products, or walk the store providing security, or do the bookwork to get sales checks done on time.
Regarding the display, too much inventory can hurt as well! Consider that if you were a shopper, would you reach to the back to look at an item if it meant lifting something off of it, or moving items to get to it? Can a shopper even SEE some of the items at the back? There is a point where too much inventory will hurt your sales. At some point, it may be viable to consider expanding to more display space if you are trying to make more money. (Another point here, the most valuable small items are jewelry, coins, perhaps even collectables such as pocket knives. Those things obviously fit in pockets and as such are the first items stolen from display areas. They are hardest for Debi and I to protect. Any items that are small enough to fit into a pocket are likely to end up in a pocket if not locked up. It costs about $70.00 plus lock for a decent locking shelf display case. It is worth it.)
Finally, if your inventory is of proper investment, if your display is clean and appealing, and you are not making sales, you can consider your prices. Selling for too low can cause a potential buyer to have doubts of an items authenticity. Selling for too high, well, you won’t often sell anything when it is priced too high. It is important to research your items well and price at a value that is correct for the area market. (Book prices, even Ebay prices, can often be a little higher than the Pekin/Peoria market will pay. Why not sell on Ebay? In some cases it may be a better option, but consider the time spent, the commission, and sometimes an antique store IS the better choice.) We would add that including any research by way of good descriptions of the item either on the price tag or perhaps included on a little sign attached to the item helps as well. People like to know the history of the items they are considering buying.
Again, if you are selling less than 10% of your inventory each month, and your display is done well, you need to look at your pricing. Even if you are managing the 10% turn, watch closely items that have been on display past seven, eight months, they are reaching the point where they should have sold. Perhaps they are not something attractive to area buyers? Perhaps they might be replaced with something else? Debi and I do not suggest a reset every one or two months, we feel that even six months might be a little early, but at that point it wouldn’t be “way too soon”.
Well, I said this Newsletter would be half a book. And I’ve just about covered the first chapter: “Making Money”. Other ideas are seasonal decorating, seasonal merchandise. One thing we DON’T think helps a great deal is discount signs. Everything is Twenty Percent Off!”? We haven’t seen many shoppers come in looking for the “bargains”. Many assume prices have been fixed (raised to make the discount pretty much meaningless). What Debi and I do, is when it is time to lower a price on an item which has been in our inventory too long, is simply change the tag. Crossing out a price, and writing a new one? It worries us because any shopper could have a pen and do the same to any item in a display area where a dealer has already set the “example”. And, how do Debi and I tell the difference between a legitimately crossed out tag and one that is a shopper applied “discount”?
We have done our best to explain what we’ve seen work and what we’ve seen that doesn’t work. Of course, leasing display space means each dealer is their own boss. Please take our suggestions with the helpful and hopeful intent we have to provide advice to anyone who desires it. The main thing, because honestly folks none of us including Debi and I are likely to get rich at this, is to just have fun!
Chapter Two: “Some Neat Stuff!”
We have ONE booth available in the first room starting on March 1st. It is 8’x6’ and rents for $120.00 per month. We will offer it to the first dealer who asks! After this booth, any others that come available will be offered based on a waiting list we are beginning NOW. So if interested in a booth…let us know asap.
We have up to three new dealers joining us in February. Welcome new folks!
Sunday, February 26th, at 5pm we are having a Dealer Appreciation night. Let us know if you plan to attend. We will have pizza and soft drinks in the store and it will give everyone a chance to meet other dealers!
Feb 1st we opened the “Third Room”. This 800+ square foot addition to the store is where Debi and I will display most of our own merchandise. We have found that selling our own products is profitable. It pays the bills, puts money in our pockets, allows us to keep rental prices low (reasonable), and gives us a chance to display items which smaller display spaces can’t afford to keep around waiting for a certain buyer. A good example of this is furniture. We are not known to carry much furniture due to the display design of the first two rooms. There just isn’t much room for big items. As such, people haven’t come in specifically looking for furniture…and those types of items have not sold at the 10% turnover (or better) that our smalls have enjoyed. We will “take the hit”, and stock furniture to build a reputation of having such items.
The third room will include a “rest area” where customers can enjoy a cup of coffee…someday we’ll have snacks available also. There will be a table and chairs. Dealers should also use this area to sit down and price items if needed. Use of this resource will allow customers to move about the store more freely. It would be a shame for a dealer to lose a sale because the customer cannot see everything on display.
We want to stay a mall. We can’t even imagine trying to constantly stock our own inventory for a store the size of ours. There may be concerns regarding the third room, but it amounts to about 1/4th the entire area of the store. We are not trying to sell only our own product. No one renting a full display area is going to ever be asked to leave in favor of our own merchandise. But, we ARE going to use what space we need for our own products, for the reasons already mentioned.
“The Pekin Daily Times” is going to do an article about us in their business section! It will help of course get word out about “Spirit of the Past Antiques”. We are pursuing our regular advertising and marketing strategies, considering some additional efforts, and have some things in the works which we are not ready to disclose just yet. And some things which we will not disclose because we’re the only ones in the area doing them and we kind of like having our own secret “fishing holes”. :^)
Coming soon, we’re going to redo the lease. Nothing will change for our current and “new” dealers. The wording may be simpler, that’s pretty much it. For future dealers who sign up, we are going to change the lease to require a first and last month’s rent and an initial 3 month commitment. After 3 months the lease will become monthly as everyone enjoys right now. We find that dealers often start out slow. It takes a bit for shoppers to see the new items and think about them, or tell others about the new stuff, before things really start to move! A three month commitment is our way of making sure we sign up people prepared to go the distance.
We also wish to stress that as sales increase, all dealers be as self-sufficient as possible. If we spend time doing your research, or helping mark your tags, we are taking time from doing the work that sells your merchandise. And, as much as we enjoy visiting with our friends, we must make economical use of our time. If we have to step away from a conversation, please understand that we are at work and just doing our jobs.
We’ve hired a company to set up our Web Store. We found that our design was simplistic (we’re not experts in this area) and didn’t present the kind of look that we desire to express online. The Web Store is coming, that’s all we can say at this time.
We are expanding our security system by adding cameras not only to the third room, but additional motion sensors and another camera in the first room where shoplifting has been most prevalent. Our own recent inventory revealed that of over 1,000 items, we were “missing” four. In this economy, that is not an overwhelming number.
A reminder that as of March 1st shelves will rent for $60.00 per unit. Locking cases will rent for $90.00 per unit. Please inform us no later than February 20th if you wish to downsize or terminate your lease for this or any other reason. Regarding expansion, let us know soon if you wish to expand. We currently have a little space left that we prefer to make available to our current dealers. We also have a large amount of our own inventory and as we research it, price it, and display it, we will be less inclined to remove it at a later date.
To be completely honest, in less than eight months of being open Debi and I have seen many dealers enjoy great success, and a few that have not. We know it can be done. We THRILL at handing out sales checks to the success stories, and we get a sick feeling in our gut to collect rent from those struggling. But, so often there isn’t a thing we can do to change a dealers results. We are already doing everything we can. We’ve learned that being a mall has its own brand of stress that doesn’t come from selling our own product. We’re watching as sales increase and gleeful at the progress in just these short months. Our community deserves to be proud of the early results, and should be optimistic about the future.
But, where I can see the store ending up is with Debi and I selling our own inventory along with 20 or 30 solid dealers. Keep in mind that is less than the amount of dealers we currently enjoy. No, we will not toss anyone out in favor of our own inventory. But as natural attrition (people leaving for whatever reason) takes place…we will FIRST offer expansion to current dealers, SECOND either take the space for our items, OR ad carefully selected new dealers. Our vision is to be a good quality, profitable, premium service, antique mall where dealers feel they get top of the line representation and everyone from the newest shopper who just happens to find us to the longest tenured dealer feels this is the place they wish to do business.
We think the Web Store will add a new dimension to the possibilities available to everyone.
We know that adding the third room, and the great opportunity provided by the upcoming opening of “Derby Street Antiques and General Store” , will help draw customers from greater distances. Debi and I wish there were many antique stores in Pekin for that very reason. I’ve mentioned before that we could “enjoy” the 33,000 residents of Pekin as the only antique mall in town, or DELIGHT in sharing those 33,000 and the 100,000+ residents of Peoria and the many more beyond!
We think we’re heading in a great direction friends! Our customers continue to comment in many positive ways about “Spirit”, from the layout, the prices, the service, the products, we’ve all done a great job and things are going to get better and better. Just think of it, the strides we’ve made in less than a year! The first year is supposed to be about struggling, what great evidence the results to date are regarding the rewards the future brings!
We are so happy to have so many good folks with us on this ride. No one is going to be thrown off the bus, or have their ticket revoked. But as we progress we envision widening the seats a bit when room allows and being more “first class” for the passengers.
Thanks everyone for the great times and ties we’ve enjoyed! And for those we enjoy in the future!
Dan and Debi