The more you think about all the different ways antiques dealers operate, the more you realize there is still one original format, the consignment shop. It’s got the best qualities of both the dealer and auctioneer; it’s a place to dispose merchandise in a consistent business pricing format.
What makes this configuration work is the flexibility of the shop to sell above the “reserve price” or what the consigner needs to get. The cost to the dealer who operates the consignment shop is fixed; even the dealer’s own goods can be consigned to the store. For a consignee, the ability to physically dispose of the goods and raise cash through orderly sales is very compelling. No fees, no burned merchandise from a failed auction experience, and control of the price.
The consignment method goes to the heart of the auctioneer’s success. Getting inventory and controlling their physical location is a significant advantage that dealers quickly give up to auctioneers. Their success to turn over inventory requires obtaining their goods through their 3 favorite methods: death, divorce, and taxes. But those means should also be available with dealer consignment stores. The value of real estate and the logistics to warehouse these items then becomes a critical element in the success of the entity.
The consignment process can accomplish this through the successful integration of multiple dealers with multiple disciplines, like the large auctioneers that have separate department heads. The opportunity for a knowledgeable antiques dealer to make money in that person’s skilled knowledge of the market is equal to a successful trader in Euro bonds, or real estate.
For dealers to successfully evolve in the next chapter of the antiques industry, competition with the auctions will only be successful when measured by who get control of the merchandise. The auctions, led by the Sotheby’s/Christie’s duopoly, with their techniques of fraud and deception (using the secret reserve chandelier bidding method) and conflicts of interest (collecting fees from both buyer and seller), among other dubious practices present a formidable challenge.
The dealer(s) who can create the more efficient economies of scale with the best business practices of service, price, and reliability will succeed. Through consolidation and by developing a skilled management team for dealers to coalesce around, the consignment route offers a persuasive opportunity.