If you are thinking about opening an antique store or now have one but not making much money, this article will give you great suggestions to help insure that you have a successful antique store. We owned our own antique store for over 25 years and I will share what worked and what did not works to help you not make some of the mistakes we and others made. Hopefully this will help you in starting an antique business.
Do’s and Don’ts of a Successful Antique Store
Maybe the two most important factors that will determine whether you have a successful antique store or not is your overhead and cash flow. Negotiating your first lease could be the most important decision you will make. Realize that nearly 90% of small businesses fail during the first five years. I know no one thinks their store will fail or they wouldn’t open it in the first place. So you don’t want to lock yourself into a long term lease without options to get out. Negotiating a lease for 2-3 years with options for renewals is one option. Much will depend on your initial capitalization. It usually takes several months to a year or longer before most businesses start making a profit. Be sure you have adequate reserves to pay your overhead, including buying new merchandise.
I started with your lease since rent is usually the largest expense in overhead. But be sure to know what your other expenses are before you open. Unless your landlord pays for taxes and insurance, most don’t, find out what those expenses are. Besides insurance on the building, you need insurance on your inventory, in case of fire or a major theft.
Then there is electricity, gas, phone, internet, and advertising. Another major expense can be employees, even part time. Not only their salary, but the payroll taxes that have to be paid. Do you have to hire a CPA? So whether sales are good are bad these come due every month. Once you know what these expenses are, then you can figure out how much you have to sell in order to make a profit.
Remember that you have to take at least what you paid for every item sold and reinvest that in inventory. I say at least, because if you want to grow your inventory, you will have to take more than your initial investment. This is SO important. So if you sell something for $100 and it cost you $50, you need to reinvest that $50 in inventory to replace what you just sold, then pay overhead. What is left is your profit.
When figuring the REAL cost of an item, be sure to factor in all of your expenses. If you paid that $50 for an item at an auction, it cost you something to go to the auction and bring it back. This becomes more important when you go on a buying trip, because then you have to factor food and lodging along with fuel expenses. If you own a truck for the business, those payments either have to go into the store overhead or factored into inventory costs.
Once you start using all of the money from sales and not replenishing inventory, it becomes a slippery slope that is hard to reverse. Also try to figure out if there are real slow periods in your area. Traditionally summers can be very slow with sales cut in half, unless you are in a high tourist area. I remember this happened to the shops in our area, and we were not prepared for it that first summer. Sales had been so good and then wham, it happened. We then knew to expect it the next summer. Also do you have reserves to withstand a slow economy. Antiques are not a necessity and sales will definitely drop.
Many stores have had their sales drop in half during these last few years. We were a victim of this economy. After two years of declining sales and increases in rent, it no longer made financial sense to keep the doors open. So if you don’t have reserves, this can happen to you. The economy is something we have no control over, so try to be prepared. Try to put something back for a rainy day.
This next suggestion is one of the toughest to do right. Nearly all antique stores need to run a major sale at least twice a year. How big a sale is a key. I also said cash flow was one of the two biggest factors. So maybe during that slow summer, you run a big sale to keep cash flow coming. Too many dealers get upset when they have to give more than a 10% discount, kind of the standard in this business. Then many give 20% discounts to others in the trade. Our trade business many times was 50% of our total sales. Don’t overlook this valuable source of business. These people will keep coming back and buy again and again.
I learned the hard way just how much I could sell with a 50% off sale. The only time I did a sale with that big a discount was when we were going out of business. I know one dealer that does this every August to generate cash flow. The business can not exist without cash flow. We did a one night sale and sold over $12000 in three hours, and you could hardly tell anything was sold out of our inventory. So I would suggest trying something like this to generate money to buy fresh inventory when things are slow. Even if you make no profit, you can get fresh inventory which I the life blood of any business. When customers keep seeing no new merchandise, they will stop coming.
Marketing a Successful Antique Store
First let me tell you what NOT to do, but what most people unfortunately do. The traditional ways of advertising do not work for an antique store. At our store in Dallas we spent literally thousands of dollars on newspaper and magazine advertising. I don’t think this brought us one customer, definitely not over 10 in six years. We did some of this with others stores on our street. This was advertising in two different magazines and the major newspaper as well as local community ones. The only exception is if they will do an article along with advertising. This will sometimes work. I also think Yellow Pages is now a waste of money.
Now, what to do to make a successful antique store. In internet marketing, there is a saying that, “The money is in the list.” I can’t tell you how important it is to develop a mailing list of your customers. It helps if you can start out with one. One of my friend’s store was able to obtain a mailing list from an antique mall that went out of business. We pretty much had to start from scratch sine our last shop was about 30 miles away. We used it but only about 10-15 followed us to the new store which was much more upscale than the previous one. Once you develop a mailing list, develop a newsletter to send out 3-4 times a year. Try to make it enjoyable to read and offer a sale to help get people to respond. Our list was up to about a thousand people and we would get about a 10% response., bringing in one hundred customers. You can start with a list of designers and others in the trade and then encourage everyone that visits your store to sign up. Especially the buying customers or serious shoppers.
The second major way to promote a successful antique store is to have a strong internet presence. This is the age of the internet and this is how most people search for places to shop now. They Google “antiques in your city”. If you don’t show up there, you are losing business. Google now has Google Places for nearly any type of business. On page 1 for a search of any business type in your city , there will be a Google map with the top seven businesses in that category. You need to be in the top seven that are shown. The bigger the city, the tougher the competition to get there. You may need to hire a SEO (search engine optimization) specialist like me to help you get there and establish an internet presence if you don’t have those skills. I have written a more complete article on using Google Places here.
Those two methods of marketing were the only ones that worked, so don’t spend large sums of advertising dollars on things that don’t work. The two above methods are not that expensive. You can send out a thousand newsletters fairly inexpensively. We had ours printed and used a tri fold newsletter style. This helped to get more people to read it. My wife did a good job of adding a humorous touch so that customers looked forward to reading it. We got lots of compliments. You should be able to get a web site built and someone to do your Google places work for about $500 and a monthly fee of $150- $250 to maintain it for you. Make sure they know SEO or it will just be a pretty site that no one can find. They have to know how to rank for the main keywords, like, “antiques Dallas.” If you contact me I can do these for you at the above prices if you don’t know someone. I can show you what I have done for other antique stores.
I have written other articles on this site, Buying and Selling Antiques, that will give you many other ideas on where and how to buy and sell antiques. Hopefully you have learned enough to help you have a successful antique store.