News & Events

Mid-America News
Show Calendar
State Event Calendars

Regular Features

The Antique Detective
Antique Detective Q&A
Antiquing in Colorado
Common Sense Antiques
Editor's Notebook
Helpful Hints
   for Collectors
Is This An Antique?
Reflecting History
Refurnished Thoughts
Traveling with Ken
Good Eye
Discover Mid-America
  Marketplace

Directories & Classifieds

Auction Block
The Finder: Unique Shops
Lodgings Directory
Heirloom Recipes
Museum Directory
  Aviation Museums
Wineries in the Heartland
Books for Collectors

Classifieds

Web Links

2005 Best Of Winners

Discover Mid-America — September 2005

Dealer and retail discount strategies

Most frequent retail antiquers already know how to read the "dealer discount code" on tagged merchandise, and they know that many dealers also extend this discount to retail customers who ask for it, especially if they are paying with cash or a check. That means that shops and dealers that do not do so are placing themselves at a marketing disadvantage.

In the thinking of many dealers, the practice of offering the dealer discount to a retail customer undermines the purpose of the dealer discount, which they see as a professional courtesy to others in the trade. The point is well taken, but that horse has already bolted the corral — and not just because many places are already offering dealer prices to retail customers but because so much of the merchandise featured in shops these days, with or without the dealer price, has so little room in it for resale. More and more sellers, it seems, are aiming for top-of-the-market retail, gauged through frequent consultation with published price guides.

Under those circumstances, given the selling competition from online auctions, and with groups shops going out of business left and right, restricting dealer discounts to dealers is not a recommended strategy. But for those who recognize the "what is, is" nature of discounting, there are several strategies (some better than others!) that can be adopted for coping with it so that it doesn't kill your margins.

This 19th century oval breadboard with hand-carved detail is very unusual, as most of these old breadboards were made in a circular shape. This is the sort of thing a dealer who doesn't overuse a "net" strategy could price without a discount and get some special attention for a special item. (photo by the author from a family collection.)

Structure the retail price to incorporate the “discount”

This is an oft-used strategy — though not necessarily a good one. Most sophisticated shoppers, dealer or retail, recognize that a modest discount on a richly priced item is no bargain. The discount always has to be taken into account in pricing, but it shouldn't be so obviously built into the price that it turns business aside.

Don't offer discounts to anybody

This works if the item is priced to sell in the first place. Tags for such items are usually marked "NET" where the dealer discount code would normally be located. The strategy also works best when offered in a booth where NET pricing is the exception rather than the rule. When the buyer knows this particular seller doesn't use the approach habitually, a NET tag tends to make it stand out and command special customer consideration.

A few dealers adopt a NET strategy for all sales because they don't want to have to deal with the complications of discounting. As a habitual strategy, it usually doesn't win a dealer any friends. Offering something off, however little, is, as a sales strategy, preferable to offering nothing.

Earthenware crock with stylized cobalt flower motif, 5 gallon. Those with bird motifs are the ones that command the big, competitive bucks. A three-tier discount strategy might be appropriate to maximize your ability to move quickly this more common example. (photo by the author from a family collection.)

Adopt a three-tier pricing strategy

This strategy respects the professional courtesy concerns of dealers who want to recognize colleagues in the trade while still offering a modest discount incentive to the retail customer.

Three pricing tiers — full retail, dealer discount, retail discount — may sound complicated but the process can be rendered really quite simple by using the current dealer code (and "getting real" about dealer discounts, i.e., by offering discounts with a real incentive for a dealer to buy) and then offering 5-10% as a routine percentage to retail customers who ask for it. Many dealers today regard a standard 10% off retail for a dealer price as being, if not an outright insult, at least not much help or incentive to them in buying the item. Dealers like to see discounts at least in the 15-20% range before they begin to feel it's worth their while to consider an item for resale. Most retail customers, on the other hand, will be content with 5-10% off the retail price.

This strategy may occasionally take some "tough love" discussions with certain retail customers who may have grown accustomed to think that access to the dealer price is their divinely given right. Explaining the purpose of dealer pricing becomes a lot easier, though, if customers feel they're getting something off the full price than if they feel they're barred from the discount altogether.

Establish a frequent shopper program.

Repeat retail customers are the holy grail of the antiques business. A healthy dealer discount to actual dealers can function well in tandem with a "frequent shopper" program that offers extra rewards and incentives that help create repeat retail customers. The "reward" can be anything from a coupon for $25-$50 off any purchase after “x” number of visits-with-purchase, to regular access to the dealer price after "x" purchases (or dollars of purchase) at the shop.

Nineteenth century butter churn. Unfortunately, the green paint is of more recent vintage. The otherwise pleasing shape and fine condition of the item might be sufficient to move it during the peak selling season anyway, but if the paint proved an obstacle to selling it at the dealer's preferred price, it may be a good candidate for enticing buyers with a special clearance sale price during a slower season. (photo by the author from a family collection.)

Most group shops have computer programs that can help track repeat customers. Some sort of punch card system or a preferred customer card such as those used in many retail businesses can also help both the shop and the customer to track frequent shopper purchases.

Running “clearance” and “seasonal” sales

More and more shops are offering seasonal (read: “slow season”) or clearance sales as a means of ridding shop shelves of stale merchandise and making room for new inventory, but 10% sales in this context are no sales at all. The sale price tells a retail customer how serious the dealer is about moving the merchandise. "Going out of business" sales with 10% discount signs tell shoppers the dealer's not all that serious about liquidating.

A get-serious sale should offer more than the dealer discount on the item — something more like 25-30%. Sure, this may be selling at a loss on some items, but wise dealers figure that the staler the merchandise, the better it is to get some of their money back out of it than to have it sit unsold for untold numbers of months or years at their preferred price.

Peggy Whiteneck is a writer and collector living in East Randolph, VT. If you would like to suggest a topic she can address in her column, email her at allwrite@sover.net.

> Good Eye Archive — past columns