Bargain merchandise might be worth a fortune to someone else. Or it might not. But don’t let that deter you. The thrill of the chase is intoxicating. Once it gets in your blood, you will develop that glint in the eye that marks a true treasure hunter. (Does this mean we are the modern version of pirates?)
So where are the treasures to be found?…1) Garage sales -- Follow the signs…
… to Weekend Bargain Paradise.
If you have done your homework, decided upon your niche and researched prices on the auction sites, then you have a reasonable idea of what you are looking for and what you can afford to pay in order to make a profit. Many times people have no idea about the value of what they are selling. What looks like an old mismatched dish may be a valuable and rare piece of English dinnerware and that old book no one wants may be a first edition.
2) Tag sales -- These are usually located indoors, often in malls, old barnlike structures or empty buildings. There are many garage and tag sale hounds who live for the weekend when most such sales are held. You can be sure that somewhere amid all this flotsam is a treasure or two. Some of the best bargains in the world can be found at these sales.
Garage and tag sales aren’t for everyone, though. It takes stamina as great items are found only by plowing through tons of junk. And competition can be stiff.
3) Estate sales -- Nothing stirs the blood of the pro shopper like hearing, “everything must go” or “selling to the bare walls.” Such enticements often indicate an estate sale where the entire contents of a home are being sold because someone has passed away, or was moved to a nursing-home or is downsizing.
Sometimes professionals handle these sales. As a result, finding a bargain is more challenging. The most profitable sales are those in which the heirs live out of town. When this happens, the sale may be handled by neighbors or friends. Their main concern is to get everything sold. They just want to go home!
4) Thrift shops -- When things don’t sell at garage or estate sales, they often get donated to charity for a tax write-off. Some people just prefer to skip the hassle of selling their throwaways and take the tax deduction. The charity then sells the goods in its thrift shop to fund its programs.
The stores are often musty, crammed, and disorganized so it pays to be a regular and know the days that new donations are put out. Usually the employees in this kind of shop know very little about the value of their goods. That means you have to know your merchandise to find the bargains.
5) Consignment shops -- These stores receive most of their inventory from people who want to get rid of desirable items but can’t be bothered with selling them. These sellers consign their unwanted goods to the shop. The shopkeeper receives a percentage, usually 25 to 50%, of the proceeds when the item sells. To ensure a steady turnover of merchandise, most shops limit the length of time that goods are held for sale. When that period expires, consignees must pick up the item. In some cases, ownership reverts to the shop if the owner fails to return for it.
Many stores start an automatic mark-down after a predetermined time. Not much haggling goes on before this point in time because the sellers have an agreed-upon price with the shop owners. When this mark-down time begins, opportunity knocks. If you get to know the shop owners, usually they will let you know when these times occur.
6) Flea markets -- they have constant turnover and huge amounts of items. Some of the dealers are incredibly savvy and others are totally ignorant. Sometimes dealers dump entire estates at many of the bigger markets. If this interests you, find a local market and work it regularly. As you become familiar with the usual dealers and their wares, you’ll be better able to spot items that haven’t shown up before.
There are pessimistic individuals who contend that there are no bargains to be had at flea markets. Yet there are Net auction sellers who regularly make sixfigure incomes just from flea markets. (Maybe they’re the ones who start these no-bargain rumors!) The best bargains are found if you’re there at dawn or as the dealers are packing up at the end of the day or weekend.
7) Antique malls and co-op markets -- The dealers who rent these spaces keep them well-stocked with constant changes of merchandise. They are also an efficient way to shop, since you can see merchandise from dozens of dealers in one relatively small space. The quality of the goods varies from garbage to great -- sometimes even in the same stall. That is why you have to know your merchandise.
Most malls offer a 5-15% discount for dealers or have a dealer price coded on the tag. To get this discount, you need a business card or resale number or a tax number that verifies your status as a dealer. This isn’t hard to get and if you are serious about this part of the business, I strongly urge you to do this.
You can also haggle and bargain. Always try to negotiate. Even if the dealer turns you down, you have lost nothing. Remember that the items for sale belong to specific dealers. The folks at the cash register only take the money. If you have a question or want to make a lower offer, most malls are happy to pick up the phone and contact that dealer for you. If you find something that’s great but overpriced, make an offer. Even if the mall can’t reach a dealer, they may offer you a dealer’s discount whether you have the credentials or not. It’s their way of sweetening the pot. If not, leave your offer and phone number. The mall can ship the item later if the dealer accepts.
Antique malls often feature…
…attention-grabbing sales so if you’re buying ahead of the curve, you might be able to wait until it is marked down. Check back the last week of the month. Booth rent is usually due on the first. If they haven’t sold enough to make their rent, dealers might be motivated to make a sale.
8) Antique shows -- These are a great place to purchase items and learn about the market. Many people falsely assume that shows are overpriced. This can be true for some but many are not.
Shop in the same way you would for any auction. Make low offers on everything. You are bound to score on some of it. In some shows you may buy a premium admission ticket so that you are able to preview and buy early. One great purchase can easily cover the cost of your ticket.
In addition, some antiques shows offer benefit previews for charities and/or organizations such as museums. They throw elaborate parties the night preceding the show’s opening to the public. If you are willing to join these groups and learn the key elements of this field, you will have the inside track on all kinds of merchandise.
9) Specialized collectible shows -- These are shows that are dedicated strictly to one field of collecting. You’ll likely see lots of similar items and be able to hold them, inspect them, and learn differences in quality, condition and value. Price shopping and haggling is a must.
These shows often include wonderful learning opportunities such as lectures, demonstrations and exhibits. Take advantage of these mini-training sessions.10) Traditional auctions -- These auctions can be a great place to find bargains and experience an adrenaline rush…
…as the auctioneer starts his “who-will-give-me” bidding call. However, live auctions and Internet trading differ substantially. The business of auction houses is to sell items for other people and get the best price they can for their customers who consign items for sale. Auction houses make their money by a commission charged to the consignee and a premium paid by the buyer. Both are based on a percentage of the sale.
Net auctions aren’t like this at all because the price is strictly between the buyer and the seller. There is no “middleman” except for very minimal fees (if any) from the auction site. Therefore, your customers expect to get a bargain.
11) Specialized clubs -- Whatever you collect, there’s probably a club or association for it. Members generally pay a fee to belong, entitling them to a newsletter, price information and bulletins on conventions and shows. If there is something that fascinates you, join these associations to find merchandise and develop your expertise.
12) Small Internet auction sites -- There are many, many small auction sites that have very little traffic. If you are following the prices in your chosen niches, you can sometimes find products on these sites and sell them for a profit on the biggies like eBay, Amazon and Yahoo.
13) Outlet malls - Outlet malls are collections of stores that belong to the manufacturers, rather than to individual shop owners who sell diverse merchandise. These stores stock products that didn’t sell and therefore are “yesterday‘s” goods or they are “seconds,” with slight or even major flaws.
14) Trade shows -- Trade shows are fabulous places to find merchandise. The vendors themselves are present and may be quite eager to deal with you. One great thing about trade shows is that you can sometimes find the more unusual merchandise that isn’t in every WalMart.
If you live in or near a larger city, you can find these shows by contacting the Chamber of Commerce. On the Net, some helpful sources are…http://www.tscentral.com/
15) Seconds and overstocks -- There are many stores that buy entire train or car loads of “seconds,” overstocks and closeout merchandise, such as “Dollar Tree” or “Big Lots.”
Many of their items are definitely not bargains but sometimes there are items that can be sold for a very generous profit. This is definitely a method for those who love to shop because there will be some fruitless expeditions. It is best to discover when shipments arrive and to make a quick tour through the store on a regular basis, searching only for those items that are new. You also need to think about shipping and handling when choosing items.
16) Specialized magazines and newspapers -- There are many people who sell goods who have absolutely no idea what their merchandise is worth. Ads in specialized magazines can be a gold mine! Magazines like the “Thrifty Nickel” and the “Trader” magazines (the “Auto Trader,” the “Truck Trader,” etc.) are examples. Almost every community has these “ad magazines” where the local citizens advertise goods for sale.
One wonderful phrase to look for is OBO, “Or Best Offer.” That means the seller is very open to negotiation. Jot down this lucrative tip... when you go to bargain with an individual for merchandise, if at all possible take cash. The sight of actual money is a much more powerful motivator than a check. The seller knows that I am ready to buy at that moment. It’s hard for the seller to resist because the sale is a done deal -- there’s no “I’ll-think-about-it-and-letyou-know” response.
Another important point about buying from individuals is this... distance matters. My time is too valuable to drive a couple of hours to make $50 or $100. I am sure that yours is too. The auction game is about making maximum money in minimum time.
Therefore, if you live in a big city, know your geography before you go looking. The only exception might be if you want to just practice your negotiation skills. Perhaps you have found something intriguing or interesting and you just would like to try negotiating. The extra time expenditure for traveling is secondary.
I learned a lot about real estate investment from a very successful guru who teaches a very important principle... we make money when we buy, not when we sell. This is absolutely true in the auction business. If you decide to tattoo any advice on your arm, make sure it is this valuable insight.
17) Wholesale -- There are many companies that specialize in wholesale merchandise. What is wholesale? It is “supposed” to be the price at which the manufacturer sells to the retail stores. Of course, we all know that merchandising games are played every day so buyer beware -- “caveat emptor.”
There are really two distinct categories of wholesalers. The first are companies who wholesale the merchandise they manufacture. The second kind is an independent that buys large amounts of goods from manufacturers, stores them in big ugly warehouses and resells them. Some of them are open to the private individuals, and others sell only large amounts to other companies or to brokers. It’s simple to find out their policies.
… unload items onto whoever wants to carry them next. Closeout merchandise is distressed for some reason (i.e., “shelf life,” trucking accident, end of fad). They are much cheaper than wholesale. The problem is that normally you can’t buy just one. You must buy in bulk. However, you can usually buy samples.
Test, test, test! See if the one item sells, and if it does, buy more.19) Pawn Brokers -- Pawn brokers are loaded with inexpensive...
… lightweight, easy-to-ship items. They can be a rich source of valuable merchandise. However, much depends on the actual pawnbroker. His willingness to deal depends mostly on the neighborhood he works. Shops in more affluent neighborhoods are less eager to co-operate. Whereas in some less prosperous areas the brokers tend to be a bit more accommodating. It takes some scouting and legwork to find the right people.
There are some brokers who would do almost anything to help -- including permission to take pictures of merchandise and sell it without the item ever leaving the store. If you decide to do that, be certain to insist on a guarantee that they will hold your items. Otherwise, you may sell something and not be able to deliver to your buyer.
20) Ethnic treasures -- Another little-thought-of place to find fascinating, unique items are ethnic neighborhoods. The auction sellers get to know the merchants and establish a good reputation as folks who can move merchandise. As sellers become accepted as insiders, people start bringing products to them. The sellers no longer have to go hunting. This is the ideal situation!
21) Find bargains on trips -- Any time you go on a trip, keep your auction eye peeled for profitable items. In the mountains of Tennessee, I bought several chess sets that were carved of onyx and quite beautiful. I averaged $60 worth of profit on those sets…
22) Other auction sources...
i) Local governments sell property confiscated from criminals, stolen property whose owners are a mystery, and equipment and supplies they no longer need. States and provinces also auction off property that is abandoned in safety deposit boxes.
ii) Airlines sell luggage that is unclaimed.iii) Dry cleaners sell abandoned garments, often simply for the price of the cleaning bill.
iv) Storage facilities (the kind you rent by the month) are very hot business properties. They always have people who don’t bother to keep up with their payments and often hold auctions and sell off goods at very low prices.
The owners are losing money if their space isn’t rented. Storage facilities range from very sophisticated ones with their own trucks (who probably sell on the auctions themselves) to unsophisticated ones who just want that “junk” gone!
There are lots of wild, underground stories that make the rounds. You know the kind. Someone buys a new Mercedes for $25 (well, OK, maybe not that good!) However, the reason for the stories is that there are many great, legitimate bargains to be had from the government. Governments are often more concerned about moving the product rather than getting top dollar. Big government spends lots of money. There are bound to be mistakes, several even. As well, government agencies seize lots of goods for various reasons. The IRS seizes property to help pay tax bills. The Customs department takes property belonging to drug dealers.
In spite of the urban myths about the bargains, most people don’t really know where to find these goodies. Therefore, the search may take a little work but there are great deals to be had. An easy place to look is the “legal notices” section of large newspapers. Other sources are...
1) Postal Service Auctions -- The Post Office sells off undeliverable merchandise which tends to be usually in the gift category. (Not too many cars are sent through the mail.) The Post Office operates regional centers. More information is available at http://www.usps.com/auctions/
2) Customs And Treasury -
(http://www.ustreas.gov/auctions/customs/subscrib.html). The Customs Department have different types of sales...cyclic (held regularly), specialty (held whenever there is a large volume of items, or for other specialty reasons), sealed bid (written bids must be at a certain location by a certain date), open bid (potential buyers may use publicly posted forms), quick (perhaps the items for sale are perishable, or there are “large amounts of lowvalue merchandise”) and consignment.
3) Department of the Treasury - (http://www.ustreas.gov/auctions/) The Customs Service is a branch of the Department of the Treasury so their auctions are intertwined. The Treasury Department has a subscription service for citizens who are interested in knowing about their auctions.
Government Auction Guidelines...• All auctions have an inspection period. It ranges from a few hours before the auction to a week or two.
• All items must be paid for in full before they can be removed from the auction site.
• Cash is always accepted. Cashier’s checks and money orders are the preferred forms of payment. Some auctions, if run by a private company, will accept Visa, and Master Card. Always check with the auction to be safe.
The National Auction Bulletin at 800-327-2049 lists all kinds of auctions. You can also use Finance Net
(http://www.firstgov.gov/shopping/shopping.shtml) and Auction Advisory (http://www.auctionadvisory.com/).
4) Federal Communications Commission
(http://wireless.fcc.gov/auctions/) The FCC holds auction with a variety of products. Their Web site also includes a “downloadable” handbook.
5) Real Estate -- If you are interested in residential real estate, contact...GSA Public Buildings Service at 1-800-472-1313 or... request a free copy of the US Real Property Sales List from the Consumer Information Center, Pueblo, CO 81009 or by calling 719-948-4000.
6) Militaria -- The U.S. government sells military surplus personal property through the Defense Logistics Agency’s Defense Reutilization and Marketing Service (DRMS). Contact the DRMS at 74 Washington Avenue North, Battle Creek, MI, 49017-3092.
7) Internal Revenue Service (http://www.ustreas.gov/auctions/irs/)