On mega-stores and small independent sellers: The coming storm in the antiques and collectibles business
[I’m composing this entry online. It’s not done yet. So linking to it, or expecting anything it says now to be here later would be foolish. When this message disappears, it will be done.]
[I’m still not quite back yet from my trip, but things seem to be improving on all fronts and I should be back online daily again by the weekend. Meanwhile….]
As I’ve mentioned before, we live in a Booktown. Ann Arbor boasts (actually, I think it’s the Chamber of Commerce that did the boasting) more bookstores per capita than any other town in the US. As a result, there’s a lot of thought given to the books business here. Insofar as this is the home town of the Borders chain, particular attention is paid to the relationship between big corporations like Borders, Barnes & Noble, and Little Professor and small independent booksellers.
Painted in over-broad strokes, the picture is something like this: As with many retail businesses, there’s been a decades-long shift, which has been accelerating since the heyday of the Waldenbooks/B. Dalton chains, from independently-owned bookstores with personal service and hand-picked stock lists, towards bigger and more standardized stores. These days Borders and Barnes & Noble sit at the top of the food chain, with Amazon acting as a powerful ethereally-distributed competitor.
A similar effect has been happening among sellers of used and rare books. In comparison to the retail new books trade, the antiquarian business is crippled by the inherent bottleneck of inventory control, so virtual bookstores consisting of big databases and order handling systems have an advantage for the moment over bricks-and-mortar used bookstores. Alibris.com, ABEbooks.com, and even Powell’s online effort and eBay handle this quite well. But the clear efficiencies of online business doesn’t stop aggregation from succeeding — if only by attrition. Among the bricks-and-mortar bookstores, witness the power of Powells, the lordship of John King in Detroit, and the growing number of dead or dying small independent booksellers specializing in used and rare books.
I am reminded, this week, that not everything in the world is books. To some folks, this may come as a bit of a shock.
I’m in Cleveland at the moment. My mother is moving in with us, and I’m helping her sort out her household, accumulated over 50 years in this house they built. Like me, my parents have been almost-but-not-quite hoarders, and aficionados of estate sales and auctions. Along with many beautiful books stored away in my Dad’s “lab” in the basement we’re collecting a startling pile of valuable antiques and collectibles. Not just things that have accrued value through age (like tartan-decorated picnic coolers and formica Moderne end tables from the 50s), but pottery, china, pressed glass, textiles, tools, clocks, electronics… you name it.
At the same time, friends of my Mom are also moving house after 30+ years, and I’m helping them in the same capacity. Nancy is not merely an avid collector, but knowledgeable: a highly-trained generalist expert on antiques and collectibles since her youth, she has accumulated through her social network of nice old ladies and friends and shop owners and a tendency to go to the right estate sales a household that might as well be donated to a museum. Well, not quite. But close.
In order to move, they need to downsize. So Nancy has set aside a number of items, ranging from pewter to glass to little toys. Those that she doesn’t think I can sell on eBay to good effect, she’ll sell in her garage sale in a few days at a serious loss, say $0.25 for an item that in the right venue would bring $20 or more. Unlike many folks, Nancy knows what these things are. A little green-looking pressed glass dish I might put under a small potted plant in the windowsill is from the 1860s and worth $120 when I check market prices on eBay. A little 3” tall porcelain doll you would expect to see in a jumbled box lot — and which would sell in a garage sale for $0.50 or so — would set you back $80 or more. Even her personal effects, like her 1960s nurse’s cape, which even she would have pitched or sold in the garage, would bring $40+.
Market efficiency is a myth in this space. Even Nancy, who is more knowledgeable about these things than many museum curators, misses some stuff I catch. And this brings home a very interesting (but tangential) observation I’ve made before about collectibles and antiques: knowledge is money. Your average little old widow, selling her lifetime’s accumulation of history (that her children almost inevitably do not want) will realize only the tiniest fraction of the value of the items. Instead, the flocks of garage and estate sale gleaners will wander and pick (without saying a word), and they’ll then carry it on to some dealer (more below), who should expect a 100% or higher margin, and from there if it’s quite nice it may make it to a show or premium venue where it will realize another few hundred percent.
In my personal experience, as one of the people who’s played the gleaner role as well as the upper-end dealer, we’re almost certainly talking about 1000% at a bare minimum, with something like a 30-fold or higher net increase in price over the whole process on average. So what I buy from a “source” for $1 or so, I expect will sell to a final consumer for $30 or more. And I frequently see 100-fold or higher.
The value comes directly from knowledge that the buyer has, but which the seller does not. Every step of the way. Either knowledge of meaning or context (I know to look for Rackham illustrations or certain science fiction authors), or (less frequently) knowledge of and therefore access to a market where the uptick in price can be realized (I know who to take old science and engineering books to. I know where to sell old arithmetic primers).
That’s why I’m helping Nancy out: Because with our shared knowledge of value of the items and venues in which they can sell, we can collaborate to realize much of that value.
So, given that knowledge is value, I’d be remiss as a businessman if I didn’t keep up on research and market status. So yesterday, after spending a couple of busy days packing and hearing stories from Nancy about Rockingham glazes and how to tell real old milk glass from modern stuff, my Mom and I went to do some market research in the local shops.
Ten or even five years ago, we woould have driven downtown towards the urban center of Cleveland. There, along Detroit Road, used to be the strings of antique dealers and jumble shops. Not the topmost peak of the food chain ever (in Cleveland, that would have once been Wolf’s), but up there about where I as eBay seller sit in the process.
They’re all gone. Dead. Empty. Tehre may be a few hidden away with bars on the windows down there somewhere, but you can’t see them from the car while you’re driving.
So I checked the metropolitan phone book, and see that while there are a number of scattered dealers out in the country ring (the belt of the Greater Cleveland area that’s most likely to be plowed up and sprout into greige developments in the next five years), the problem here is exactly the fact that they’re scattered. The driving we’d need to do to visit any pair would amount to maybe 50 miles.
But there’s also the Medina Antiques Mall. Aka, the future.
Those of you who have visited most antique shops will have learned that they are generally very dark and crowded agglomerations of precariously-balanced stuff, typically in older reclaimed low-rent buildings fraturing cloudy windows and creaking floorboards and damp cellars. Those of you who have visited most antique “malls” will know of them as about the same, only bigger, and typically consist of the same sorts of stuff arranged in the same sort of teetering manner, but subdivided into thirty or forty “stalls” rented by semi-independent or cooperative dealers.
A few years back, I had some downtime during a business trip to Des Moines when I discovered the Brass Armadillo. My eyes were opened. Like the few others of its generation, the new face of the business physically reflects an utter transformation in the business model. It’s a big old supermarket, thousands of square feet and fifty-foot ceilings. Light, and bright, and open. And like the underlying supermarket, the stuff is arranged in aisles, in cases or little areas. Visibe, sorted, clean, unjumbled.
Hundreds of dealers under one roof, not tens. An order of magnitude over the original (now dead) shops.
Sound familiar? Bookstores again?
And the Medina Mall is another step up. An element of a national chain that’s becoming the Borders-like pinnacle of the antiques food chain.
[more to come]