Pickers and Wholesalers – Business of Doing Business – The Journal of Antiques and Collectibles – February 2003
by Ed Welch
Pickers and wholesalers occupy a unique place in the antique trade. Generally, pickers and wholesalers do not sell at antique shows, group shops, auctions, or from a privately owned shop.
Pickers and wholesalers sell to dealers, collectors, decorators, and individuals with whom they have established a relationship.
A dealer who chooses to sell his or her merchandise at a lower price to attract a following of other dealers is not necessarily a picker. A dealer who chooses to sell his or her merchandise at a low price is not necessarily a wholesale dealer.
Generally, wholesalers tend to be generalists. They buy and sell anything on which they can make money. Pickers, on the other hand, tend to be specialists buying a few types of items and serving a small clientele of buyers.
I became an antique dealer in the mid-1960s. I entered the trade as a wholesaler. I did not become a wholesaler by choice. At that time there were no group shops, no antique shows, and auctions specialized in selling to wholesale dealers. I could not afford an individually owned shop from which I could sell retail. I did not have the money for a retail shop and I did not have the time to tend a retail shop.
My customers were long-distance haulers who came to Maine once each year driving 40-foot tractor-trailers. My selling season was March, April and May.
I bought all summer, fall and winter and stored my purchases until spring. The going wholesale price for an oak commode was $12, dressers brought $65, and a roll-top desk brought $150. I had to sell at these prices because I had no other selling outlet.
The first group shop in Maine opened in the fall of 1972 in Wells. At this group shop, I could get $36 for an oak commode, $125 for a dresser and between $350 and $500 for a roll-top desk. My days as a wholesaler ended when I rented space in this group shop.
By 1975, real antique shows began to replace the original “antique show and sale.” At the original “antique show and sale,” collectors showed off their collections, hence the term Antique Show. The only items for sale were their mistakes and things they wanted to dump. Real antique shows, especially out-of-state shows, offered yet more opportunities for dealers who were willing to travel.
When I was a wholesaler selling from my barn, my selling expenses were zero. When I became a retail dealer selling at group shops and shows, my selling expenses got out of hand and cut into profits. I soon realized that I would have to keep a close watch on selling expenses and recover this money by charging more for my antiques.
At one time, I sold out of seven group shops and more than 30 out-of-state antique shows. Shows in New York, Baltimore, Washington, D.C., Miami and Chicago cost a lot of money.
PLEASE NOTE: an astute wholesale dealer willing to sell quality merchandise at less than value in exchange for zero selling expenses can literally make more profit than a retail dealer on the same item.
Wholesalers and pickers who cheat their regular customers by withholding some of their best items for retail sale at auctions, shows like Brimfield, and Internet auctions like eBay, make additional profit in the short term but lose in the long term because their customer base disappears.
It takes years for a wholesaler or a picker to build a strong following. It takes much work each year to maintain that following and to replace buyers lost due to retirement. The first time a wholesaler or a picker sells one item to someone not on his clientele list, that wholesaler is for all practical purposes no longer a wholesaler.
As a picker, I sell everything to the dealers and collectors who normally buy from me. The only things I sell on eBay or at local auctions are things that my regular buyers chose not to purchase. In plain English, my regular customers get all the good stuff. E Bay and local auctions get all my junk.
As a picker, my specialty is medical, dental and optical antiques. I travel extensively to buy such items. I travel the eastern half of the United States plus most all the United Kingdom. I buy all year long. I prefer to buy in large lots such as the contents of an optical shop, the contents of a dental lab, the tools and equipment from a retiring doctor, and entire medical collections. For example, last year I bought the entire contents of a hospital put in long-term storage in 1955. The lot contained nearly 5,000 items. I am willing to travel any place to inspect and purchase large lots and entire collections. My buying expenses are extremely high.
Therefore, my selling expenses must be very low.
To keep my selling expenses low, I sell just two weeks each year, the first week in April and the first week in November. If you want to buy medical, dental and optical antiques from me, you must visit my selling locations during one of these two weeks.
I display at three private shows and one public show during each of my selling weeks. The private shows are in hotel suites. Attendance is by invitation only. The public show is at the Metrolina Expo in Charlotte, N.C. I have had the same booth at this show for 19 years.
More than 80 percent of the merchandise I purchased between shows sells at the next show. I dump through local auctions and eBay almost everything that does not sell at a show. The few items that I keep are placed in long-term storage of between three and five years. My goal is to have 100 percent fresh merchandise for my next selling session.
My merchandise is of two price levels: very expensive and very cheap. I cater to high-level dealers and to collectors who want the very best. I also cater to low-end dealers. I purposely avoid the middle layers of the antique trade. My business strategies are tailored for a marketplace where only the very best and the cheapest sell.
At one time, there were many more pickers and wholesalers than there are today. The lure of fast, cheap money on eBay and online catalogs has cut into the ranks of what used to be called “The Dealer’s Dealer.”
Remember, the attraction of choosing to be a picker or a wholesaler is zero, or very cheap, selling expenses in exchange for a lower price. eBay and online catalogs give wholesalers and pickers cheap selling expenses plus the advantage of retail selling prices. It is not surprising that many pickers and wholesalers abandoned their traditional customers.
At one time, I bought more than 80 percent of my stock from pickers and wholesale dealers. I now buy less than 10 percent from these sources.
The unrealistic, high prices once possible on eBay and online catalogs are becoming a thing of the past. Today, eBay has abandoned the antique trade, the very thing that made eBay possible. It appears eBay makes more than 90 percent of its income selling automobiles, consumer electronic devices, and new merchandise.
One needs to ponder how much time and resources are devoted to improving services for the antiques and collectible trade. One also needs to consider what will happen the next time eBay must cut jobs. Will eBay cut the jobs of that portion of its business that produces 90 percent of its income? Will eBay cut the support staff, or even the entire service, of that portion of its business that produces less than 10 percent of its income?
In addition to being a high-level picker of medical-related antiques, I am also a mid-level dealer who chooses to sell an entirely different collectible through online catalogs. Because marketing techniques differ between the levels of antiques, I am forced to maintain three selling strategies, high-level medical, low-level medical and mid-level collectibles.
I do not mix my mid-level collectibles with my high-level or low-level medical antiques. My mid-level collectibles are bought separately, stored separately, and marketed separately. I do not take mid-level collectibles along on my two, one-week selling sessions.
Selling expense for the “picker” part of my business is less than 3 percent of the cost of goods sold. Selling expenses for my mid-level business average between 10 and 18 percent of the cost of goods sold.
The mid-level portion of my antiques business has the largest overhead because profit margins at this level tend to be smaller. Therefore, the only way to make worthwhile profits at this level is by aggressively going after sales. The only way for a business to attract more customers is by advertising. Because I sell mid-level collectibles on the Internet using an online catalog, my advertising costs are Internet related.
Search engines, the cyberspace tool for finding almost everything on the Internet, are no longer free. I pay thousands of dollars each year for search engine listings that five years ago were free. I pay to be included in online business directories. I pay to take expensive computer training and programming courses to learn source page programming.
Paid search engines are changing cheap and free Internet selling into expensive selling. Paid search engines are changing the nature of Internet catalog sales from wholesale to retail. Will this change in Internet selling costs once again open a gap between the wholesale trade and retail, a gap that can be filled with a new crop of wholesalers and pickers?
I think the answer is yes. I also believe that this new crop of pickers and wholesalers will fully understand internet selling, be more specialized, serve fewer clients, and be more than willing to sell at prices low enough to allow their repeat customers enough mark-up to make a real profit.
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