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Showing posts with label pricing. Show all posts
Showing posts with label pricing. Show all posts

Thursday, May 16, 2013

Pay what?!?!?

The pricing of vintage pieces is a topic than comes up often, both among dealers and among buyers. Many buyers are looking for a bargain and are sometimes a little insulted by the prices asked by dealers. So how is the value of an item determined?

Some novice dealers have a standard percentage that they mark up items they've purchased. They may simply double or triple the amount they paid, resulting in inconsistent pricing of similar items. More experienced dealers know that the price they pay for an item is not the only factor in determining what to ask for it. Rather, value is based on the balance of four things: the quality of a piece, the condition it is in, how rare it is and the demand for the item.

Quality has to do with the talent of the designer, the type of materials used to produce the piece and the level of craftsmanship that went into making it. No matter how beautiful the design, the use of inferior raw materials lowers the quality of a piece. Likewise, no matter how brilliantly a piece is designed or how good the materials used, shoddy workmanship keeps the piece from being valuable, just as no amount of high quality materials and workmanship can make up for poor design.

While quality is determined at the time of design and production, condition has to do with how well a piece has been taken care of since then. Even the best design, manufactured from the best materials by the most exacting craftsmen, loses value if the piece has been mistreated over the years. Sometimes a piece has been so severely damaged that it has lost all its value. On the other hand, if a piece was of low quality to begin with, such as the borax furniture discussed in a recent post, keeping it in mint condition over the years does not increase its value.

A piece can be expertly designed and produced, and it can even be in pristine condition, but if it was produced in great numbers, then it is not rare. Therefore, it is not valuable as it would be if it were less common. Recently we were offered a desk by Sven Aage Madsen that had been produced in teak by the thousands. As a result, many still exist, and many dealers have it for sale. As a matter of fact, a quick search of 1stdibs turned up 18 items by Madsen, 8 of which were that same desk in teak. We declined to buy, politely explaining to the seller that we would have been happy to buy the desk if it had been the rarer rosewood version of the same design.

Finally, even if a piece is of high quality, is in good condition and is quite rare, it is obviously of no value if no one wants it, so demand is another aspect to be considered in pricing an item. Perhaps the economy is depressed, so there are no buyers. It might also be possible that the designer or the material used to produce the piece has developed a social or political stigma, making it less in demand in certain segments of the market, such as the use of some woods, leathers and ivory. There is also the possibility that a dealer has priced an item so high that there is no demand for it at that price, in which case, lowering the price might stimulate demand.

The more a dealer gets to know his product...the designers and the materials they used, the hallmarks of carefully crafted items, the number of similar items still available, the price point his market can support...the more accurately he can price his inventory. And the better buyers research vintage furniture, the more they will understand how experienced dealers arrive at the numbers on their price tags.

From worthpoint.com


Madsen desk in teak, selling for approximately $2,500
1stdibs.com

Madsen desk in rosewood, selling for approximately $6,000
1stdibs.com

Sunday, May 22, 2011

The lure of easy money

When you open a store, you can have as many conversations as you want about how you define yourself...how you want your store to be perceived...what kind of relationship you want to have with your customers. And even then you can be lured off your path.

We spent the past couple of days pricing our new merchandise, both with physical tags, on our website and on Craigslist. Yesterday morning I sat looking at the website, thinking I should call my SIL, when I got an email from him. It said, "Do you think we overpriced the new stuff?"  I had been trying to think of a tactful way to ask him the same thing.

In order to keep prices reasonable, you have to stay informed about what the other shops are selling things for, and that can be a double-edged sword. Not only does it help you stay abreast of sales trends at the other places, but it also plants a little subconscious whisper in your brain that keeps repeating, "Did you see what they got for that piece?"  Pretty soon, if you're not careful, your own prices start to creep upwards.

My SIL and I both woke up yesterday morning knowing that's what had happened to us, and we weren't comfortable with it, because we had made a promise to our customers and to ourselves not to become another one of "those guys" who are making owning mid-century furniture more and more difficult.

So we spent the rest of the day lowering the prices on the new items, knocking off a hundred dollars here, hundreds more there. Then we put the Closed sign in the window, had a couple of glasses of wine and felt a lot better about ourselves.