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  1. #1
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    Default 2 examples

    yesterday at an auc tion i saw 2 examples of how to run a business or where to put your energies....which is better is such an interesting question..... neither one was me....but i bought the most at the auction....
    this was a big household estate auction with lots of interesting stuff....
    one....bought the big cheap piles, if it was a big group and cheap she was the buyer..... many things that i couldnt even get 3 $$ for....she probably bought over 700 items...
    the other..... bought only about 8 things...the very best small antiques that were there...including a wonderful toy car i wanted...for 195$$

    they probably each spent about the same amount of money....
    both drove me crazy..each was heavy competition to me..
    ..number one hurt me on the cheap stuff that i get for free sometimes..things that fill up the shelves and sell easily if the low price...i still got whatever i wanted against her but at a higher price than usual...

    ..and number 2 out bid me on the good stuff....because he knows that field better and probably does shows and is with the big buyers more often...he specializes ...so i didnt get the really neatest stuff...

    my day, with a middle recipe for inventory, filled 2 box trucks...and i should do great with what i bought...one truck held a huge pile of screen doors and porch posts and a large pic nic table....

    i cant help but wonder which way is best...i know 2 really rich junky buyers....i cant see how i could make the income i do now at either end of the spectrum....but it was a great where to aim example yesterday...
    anyway...whats your theory?
    Last edited by greenoak; 05-08-2011 at 09:58 AM.
    ann at greenoak www.greenoakantiques.com

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    Doesn't it all come down to knowing your customers? You know yours and they appear to know theirs. You each must stray a little into each others' territory in order to find product to appeal to the fringes of your respective territories to expand. That's when you find yourselves bidding against each other.

    My theory is - this is a perfect example of the dynamics of business.

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    i think so too spider....but its a hard question..
    like when you chose to go for large plumbing contracts instead of small home jobs....
    .we make our money on very middle of the road stuff..we are in a mostly depressed area.....but the big expensive things and the more rare are a big plus to have around , and really help the store... ...its always a balance question...i wouild never go for an all upscale gallery look, even tho i have some real expenxive stuff and some very well heeled customers!!! i sell to their kids too, who are on budgets ..
    you can aim too low or too high....
    i m kind of haunted with davids words last week.... about where to put your energy.....i just hope im using all the energy in the right places and heading in the right direction...
    ann at greenoak www.greenoakantiques.com

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    Ann I don't think it's a matter of one being better than the other. Both can be viable ways to run a successful business. They're two different business models and so require different things for success. I'm generalizing, but the low end products probably have result in less profit per sale. So to succeed you need to sell more. As a business you would need to get more people in the doors so you'd likely need to put more money into advertising and marketing. Since you have to sell more you might need more space to store more. Or you might need a quicker turnover of merchandise. You'd probably pack your store with as many items as possible. The design of the store would be to make use of every bit of space you could since you probably need to sell a lot.

    At the high end you odds are you make more profit per sale so quantity isn't as important. More expensive items aren't going to appeal to as many people so you need to be better targeting your advertising and marketing. You don't need as much merchandise on the shelves or as quick a turnover. The store would probably be better to have a more open plan with more space. It would need to give the appearance of luxury and elegance in order to attract the right people.

    Again I'm generalizing, but consider two stores. The Gap and Banana Republic. Both are owned by the same company. The former sells toward the low end, while the latter sells toward the high end. The stores look very different, the advertising looks different, etc.

    Both business models can work. Where they most likely run into problems is when you try to be both. What's going to work better for one business model usually isn't going to work well for the other and could potentially turn off the other side.
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    actually in antiques there can easily be more profit in the cheaper stuff.... the expensive always has tons of competition to get.... and if you know you have a hot buyer for something specific at 500$ and you can get it for him at 450, sometimes it makes sense to get it for him.....
    you would probably be suprised at the low mark up that dealers take sometimes....
    we sell 2$ insulators and 2000$ cabinets...the insulators came free in a box....and the cabinets went thru lots before hitting the floor...design, producing, painting, placing etc etc..... so its always kind of complicated....and makes us different.... which i like...
    i have high end customers for the antiques, they do come here, or call me, ,,,,but finding what they would be willing to buy is the hard part.....they come thru hoping!! and hoping i dont know all about it..lol
    Last edited by greenoak; 05-08-2011 at 11:47 PM.
    ann at greenoak www.greenoakantiques.com

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    That's why I said I was generalizing above. Bookstores are another business where the most profitable products probably aren't the ones you expect. Bestsellers for example return little to no profit. However those $2 books you see in stacks around the store have a high margin. It costs too much for the publisher to store so they practically give them away. It's cheaper than paying to house them.

    Still you aren't going to make a living selling an occasional $2 book or insulator. You have to sell a lot of them regardless of the margin.

    Ann have you ever noticed if the people who buy the $2,000 cabinet are the same people who also buy the $2 insulator. Not specifically those 2 products, but are there people who buy both high and low end products or is it usually one or the other? Just curious.
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    oh yes.... for sure.....desireable stuff can be cheap too....and thats a plus... spAce is a big deal tho....i couldnt justify lots of space for 2$$ things ilf we were real small.... of course folks wouldnt drilve to see us if we were real small either... so i try to have the right cheap stuff along with the big money things.....
    ..but the store would look really bad if it was full of the truly low end stuff the other person was buying....shes just starting up a nd is maybe over estimating some things....lots of things really are junk with no chance of selling.... and she will have lots of energy tied up in that kind of stuff....meaning the kind of things that end up on our 50 cent table at our annual yardsale...we pack that kind of stuff away if we get it...it never hits our shelves..

    vg,do you think about this issue when plotting out your business? could you or should you upgrade your target customers or your niche? or are you pretty happy with your place on the totem pole...? or to say it another way can your place on the totem poleor spectrum of your field produce the kind of income you want? i do believe any spot on the spectrum can make money but the choices and goals we make are so important....
    one more thng i have observed....a business getting a great job at a fabulous rate and not being able to get it again......then forever after being unsatisfied and holding out for another job of that class.... when they could have made a living, maybe a great living, serving a more plentiful market.... one guy built knives at about 100$$$ an hour then was just scraping by for the next 20 yrs...with high standards..and no real work or growth after that...
    the other is a web person who got 300 and hour and thats the goal now..... and might have to lower himself to taking lower pay work....but he isnt finding the right work yet....he has sent out feelers to me but im not interestred..... i wouldnt want to be that guys lower customer...i would want to be served by someone happy with the price ...not resenting the price..
    .sadly, i feel snooopy, i get this impression from reading his facebook page where he makes fun of businesses that pay under his rate...thinking they are obviously getting crappy work...this guy is young and hopoefully will find his right place...
    i love business...its so convoluted!!! and trikky...
    Last edited by greenoak; 05-09-2011 at 09:36 AM.
    ann at greenoak www.greenoakantiques.com

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    I think it would be hard for you to only have the cheap stuff. In your business it makes sense to have a mix. I guess the issue is more how you brand the business. You don't want the people looking for the low end stuff to think you only sell high end stuff and vice versa.

    I do think of this with my business and try to do things that will attract the type of clients I like working with. I don't necessarily think of it in terms of high end and low end, but in some ways it's the same. For example when I first started I felt I needed to take on any project regardless of how much the client would pay. I ended up doing work that wasn't worth it. I did get paid, but it wasn't really enough to justify how much work I had to do to get paid. So I stopped taking those jobs. I also raised my rates.

    On the other side I'm not really looking to work with corporate clients. I used to be contacted not so much by large corporations, but by businesses with a corporate mindset. Part of why I started my own business is a desire to get away from the corporate world. So on my site I don't try to make myself look bigger than I am. I try to get across that my business is just me and I use language that's more casual and friendly.

    If I decide I want to change and work with a different type of client I would redesign my site to better reflect what kind of client I was looking for. I'd go with a different look, write with a different voice on my site and off my site. I'd reject some projects I take now and work harder to get more of the projects I want.

    With the people you mentioned who aren't satisfied with their current prices there could be a lot of reasons why they aren't getting the work they want. Sometimes it's simply that the world changes. Other times they aren't building a brand to attract the people they want. You mentioned the web person looking for $300 an hour. 10 years ago the lower end web people could charge a lot more. Not as many people did the same work. We were still in the internet bubble and people were paying a lot of money. Then the bubble burst and people had to accept the market had changed and they couldn't get the same rates.

    At the same time there are still web people today who can and do charge $300 an hour and more. They know how to attract the people who will pay those rates and they offer more in the way of skills and experiences, etc than those who might now charge $25 an hour.

    I think of it in terms of how much value I can provide client. I decide what I think I'm worth and set my prices based on that. If I can't find anyone to pay those rates I look at what I'm doing to attract clients. Am I giving off signals that attracts people who don't think I'm worth what I think I'm worth? If so I change those signals. Or maybe I think I'm worth a little more than I really am. In that case I might drop my rates a little or better improve my value.
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    My Wage

    “I bargained with Life for a penny,
    And Life would pay no more,
    However I begged at evening
    When I counted my scanty store.

    For Life is a just employer,
    He gives you what you ask,
    But once you have set the wages,
    Why, you must bear the task.

    I worked for a menial’s hire,
    Only to learn, dismayed,
    That any wage I had asked of Life,
    Life would have willingly paid.”

    -Jessie B. Rittenhouse

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    i like that spider....a pretty rosey view ....
    thats how i feel too vg....im not looking for the unemployed or the poor or the ones who might compare my prices to a cheap yardsale........but im very happy with a the customers i have...and i also have no desire to jump way outside my present situation to get the higher prices....for me that might be doing shows or working really hard on web sales and national recognition or franchising..im like you, i like the work i have now... ..if our way can keep on making us our present income then we are happy campers...
    and of course some web folks charge $1000 an hour.....
    i made $$$7,000 in about one minute /one bid at an auction , a couple of years ago....
    Last edited by greenoak; 05-09-2011 at 05:54 PM.
    ann at greenoak www.greenoakantiques.com

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