How to start an antiques business
Could an antiques shop be your dream business? We look at what it takes to become a successful antiques seller...
- What does selling antiques involve?
- Who is antique selling suited to
- Setting up an antiques shop or business
- How much does it cost to set up an antiques business?
- Tips for successful antique selling
- Useful contacts in the antiques' world
What does selling antiques involve?
The prospect of owning an antique shop is always one that scores quite high on the list of dream businesses to run. However, it's not just a question of having a good eye for relics. Competition is tough, and the present economic climate has meant the clients with money to spend are thin on the ground.
According to the British Antique Dealers Association there are around 20,000 antique dealers in the UK, and times are hard. Antiques are becoming increasingly difficult to find, and prices are getting higher, so this is an expensive and time consuming business to set up.
Joking aside, there are more similarities in the trade to the TV series Lovejoy than you may think. Being in the antique trade involves a lot of detective work. You also need an incredible amount of specialist knowledge and must be prepared for a lot of waiting around. The Antiques Roadshow may paint a rosy picture but if you're expecting to find enough items in your loft to set up a shop then you've already fallen at the first hurdle.
It has been suggested that one quarter of the overall population collects something. As people become more educated and gain greater expendable income, they tend to look at the purchase of antiques and collectibles for investment, security, and for aesthetic appeal. Of these type of people, it's estimated that one third invest in antiques and collectibles.
But owning an antique shop is not a short-term profit-making venture. Antiques can sometimes sell well, if they're at a good price, or they can sit for months, if not years, with few interested customers, therefore some owners make their antique shop only a sideline to their usual occupation, starting from home or specialising in antique fairs.
According to Fiona Ford special projects director at LAPADA (The Association of Art and Antique Dealers) now is “one of the hardest times of all to set up an antique shop” particularly when starting from scratch. “People read the headlines about objects going for lot of money, but don't realise that it's not an easy business. People go into it because they love it, not because you can make millions,” she insists.
Who is an antique seller's market
Despite it being an extremely competitive market, the trend for collecting has never been bigger. Indeed the definition of antique has gone through many changes. “The definition was objects 100 years-old or older or an arbitrary dateline like 1756,” says Ford. “At one point antique fairs would prevent dealers from exhibiting if they sold objects younger than an arbitrary dateline. You now no longer have datelines at antique fairs”.
So if you can find a niche like coins, early 20th century furniture, art deco art nouveau, second world war memorabilia then you already have an edge, but remember what you make up for in lack of competition you lose in possible buyers as the smaller the niche the smaller the available clientele.
Lastly you have to remember this is generally a luxury market. “The general economic client affects us,” Nilson warns. “It's a still a luxury market whether it's a £50 porcelain jar or a £600,000 painting, food, rent and clothes come first. If the economic climate is good then trade is good”.
Ready to get started? Find out everything you need to know about how to start your own business here.
Who is antique selling suited to?
Most new antiques dealers are from an antique or auction background, are in their 50's and 60's and have a lifetime of collecting behind them. Very few people get into it at an early age unless they're the sons and daughters of existing dealers. Ingrid Nilson a map/print dealer and consultant started when she was 30 while most of her competitors were in their 50's. Nilson thinks if you intend to start young then an apprenticeship is quite vital, as you're unlikely to have enough specialist knowledge in your 20's.
Once you've decided on the type of antique you're going to sell, you have to become an expert and get your stock together. “You'll need to get to know the business,” says Ford. “But antiques is one of those professions where, even if your 95, you're still learning”.
To get your knowledge you need to start doing all that detective work we mentioned earlier. Read, read, read and carry on reading. Go to auctions, antique fairs and other dealers and look at what's on sale. Lurk at the back and observe how the experts do it, because firsthand experience is the only way you'll learn anything in the antiques trade.
Getting enough stock for a shop is a very long and involved business, and will take anything from 12-18 months, sometimes years even, if you're going for a really specialist niche. This is why more and more antique dealers start off by trading from home or a small stall at a market until they build up enough stock and clients to move somewhere more permanent.
Setting up an antiques shop or business
Traditionally antiques shops tend to cluster together. Bath and its close neighbour Bradford-on-Avon seem to be the focal points for the South West. Portabello Road, Kensington Church Street and upmarket Mayfair are focal points for London, while Stockport Road in Manchester is a focal point for that region.
If you want a guaranteed passing trade and customers with antiques on their mind, then these hotspots are the places to look out for when it comes to leasing premises. Both Ford and Nilson recommend starting off from home at first and building up a clientele rather heading straight for a shop. Once you have an established clientele that you've built up from home you can set up pretty much anywhere.
If you do opt for a shop then Nilson offers this tip: “Don't let the stock stand still, rearrange the goods in the shop as often as possible, particularly the shop window to make it look fresh and new.”
It's also a good idea to set up a website accompanying any shop or catalogues you sell from. Just because you have goods on display at your premises it doesn't mean potential customers won't want to browse online first. If they see something they like online, it may be enough to get them down to the shop for a closer inspection. There are no special licences required to trade as an antiques dealer. However, some local authorities have legislation that requires antique shops to register with them before setting up, so make sure to do your homework.
You'll also need to think about insurance. It's vital you protect your goods against fire, theft or any other kind of damage. Unfortunately, as there's no RRP or dealer prices set down when it comes to valuing your contents things may get complicated, so it's best to go with a specialist insurance company that knows the business.
Getting your merchandise around
When it comes to hunting down your stock, make sure you have a solid large reliable car – one that doesn't mind a bit of cross country travelling. A Volvo estate used to be the vehicle of choice for most antique shop owners in the 80s and 90s. Also be prepared to travel as moving around the country gives you access to economies of distance. What sells for £15 in Blackpool, may fetch £50 in London.
Many beginners may not be aware that regular auctions are held two to three times a week in most cities and even smaller communities may have weekly antique auctions. For antique dealers everywhere, the auction has been a major source of supply. But be cautious when purchasing, there are thousands of antiques that have no monetary value.
Have a business plan
An antique shop shares the same basic principles as any other business and hence it needs a business plan. As competition is considerable, topics that should be addressed include: whether or not the area can support the proposed venture; the existence of an unidentified market niche that may be exploited; the level of competition in the area; the current customer base, population, income, and growth trends; competitive pricing strategies; and a variety of other facets of the business that owners or managers need to know to develop a viable and profitable business.
How much does it cost to set up an antiques business?
Typical running costs for an antique dealer will be rental, be it shop or stall, antique fairs stand costs, insurance, car upkeep costs, petrol costs, plus phone and mailing costs. Stands at antique fairs can vary considerably depending on venue type, for instance table top church hall type fairs will cost less than a bigger county type fair, where as the big national events like Grosvenor House can cost tens of thousands.
Promoting your antiques business
For most antique dealers advertising is a hit and miss affair. “You can get a picture in something like Country Life and get nothing or you get a phone call from America,” says Nilson. Most costs are on regular mailings to the established clientele and sending out free tickets to fairs and shows you're exhibiting at.
If you do want to advertise then auction catalogues, specialist magazines, websites and telephone directory yellow pages listings are some of the most effective places. But don't expect miracles overnight. “It takes several years at sending out flyers and newsletters to build up a clientele even if they don't buy something every year it's still worth sending,” warns Nilson. Another good place to advertise your business in on social networks, especially image heavy sites like Instagram and Pinterest where you can post pictures of your merchandise and perhaps get some direct sales.
Also don't forget to get the initial stock you almost always pay cash so you should expect an initial investment of £25,000-£35,000 to get started, which represents around 65% of your start up costs.
Additional investment factors to consider include:
- How will you need to operate the business until the break-even point is reached (which could be several years after you start)?
- How much will be needed for wages, six months of working capital, unforeseen expenses, supplies and equipment inventory?
- What types of insurance coverage are necessary and what will they cost?
- How much will premises cost?
One way of getting the initial stock and reducing your start up costs is to resell other dealers stock on a commission basis. Talk to other dealers and offer to help them offload their difficult to sell items.
Tips for successful antique selling
Network with other antique sellers
It's important to communicate with other people in the industry. As said before you can never stop learning. You can also trade inventory which may not sell well in one geographic area but is in great demand in another area. In addition, other people in the trade can serve you well. “I have one very good supplier who have had for 20 years,” says Nilson.
When it comes to pricing you have to consider numerous factors: the economic climate, the location, the object's condition and its scarcity. The first tip is not to rely solely on price guide books on the market. Most price guides are, at best, a starting point and often based on anecdotal evidence. Guides don't distinguish between the going price in one city or another, or between country and city markets. Books are also unable to accurately judge your object's condition. To price properly takes experience and knowledge – hence the importance of networking with other dealers.
An antique seller's workload
As with all business the workload is what you want it to be. However, dealing in antiques can be a seven day a week business. For Nilson a typical week when she's not exhibiting at a show includes buying, dealing with paperwork and bookkeeping. “Finding stock is the biggest workload, for big fairs like the one in June I'm starting to collect now (Jan). I'm also following up on the wish lists of clients. There are always lots of balls in the air.”
If you want to reassure your customers of your authenticity then you could join one of the many associations like BADA and LAPADA. Both organisations are there to guarantee that the customer gets what they think they're buying. If someone buys an antique from anyone in the BADA and feels the article is not ‘as invoiced' then the association provides a free arbitration service, with an independent panel of experts.
In addition BADA also lobbies the government on its members' behalf and gives you access to some of the more prestigious antique shows like the Grosvenor House Art & Antiques Fair and the association's own BADA fair. LAPADA offers a similar service and both have a code of practice you must follow and a set of criteria you must pass before you can join.
However it's best to avoid disputes completely and to do this it's important to be unambiguous from the outset. Ford recommends that you put on the invoice the date of the object and how much restoration has been completed on it.
Useful contacts in the antiques world
LAPADA The Association of Art and Antique Dealers www.lapada.co.uk
BADA British Antique Dealers' Association www.bada.org
BAFRA The British Antique Furniture Restorers' Association www.bafra.org.uk
Thames Valley Antique Dealers' Association Represents antiques and fine art dealers in the Thames Valley area www.tvada.co.uk