The first time I heard it, I recognized it as a profound and universal truth.
“You don’t make money selling, you make money buying” The speaker was some anonymous homespun picker up in Washington State who was poling around through the same boxes as I was at a random garage sale back in the 1990′s. He may not have said it just the way I wrote it, but that’s how I’ve remembered it – and I can tell you without a doubt that I remember it and always will.
He was saying it to the proprietor of the garage sale who had just said something like “We’re selling some stuff because we need to make some money…” It flew right over the guys head and smacked me in the face. I should have grabbed that old picker and asked him to make me his apprentice because with that one piece of wisdom, he’s earned me a lot of money. I can’t imagine what else I might have learned from him.
It might sound ridiculous to you, as it did to the garage sale guy – obviously you make money by selling things and you spend money buying things, right? Yeah, of course that’s right, but only if you are looking at things with no perspective and no perception of the past or future as already existing.
You sell the stuff you have. Where do you get the stuff you have? You buy it. If you buy stuff that no one will buy from you then you aren’t making any money in the future from it, but if you buy things that will sell – well then you’re making money by spending money – easy as that. If you don’t buy anything, you are just using up your potential energy as you sell what you already have – and eventually, the well will run dry unless you are selling your wit, your wisdom, your body, or something else that you can produce from vapor.
Want some examples? I’ve got a lot of them.
I went to an antiques show recently and I waited in line with the other dealers to be as close to first in the door as I could. We all laughed and joked with each other outside but when the doors opened – it was every man or woman for himself. One guy went left, another went right, and I went straight in and to the back. I saw a table lined with tin lithograph toys and I asked the vendor what she would take for all of them – as she started adding them up I threw a lowball offer – she raised it by 50% – and I agreed. It was less than 1/4 of the added up price. Deal was done. $125 for everything on the table.
While I did that another guy bought 40 WWII maps on silk for $300, another bought up four Navajo blankets for $150 each, and a fourth dealer grabbed seventy large unframed photos of racehorses from the 1930s for $100.
Here’s what you need to know – all of these cool items were sold within a couple of minutes of opening and they were all sold for a fraction of their worth. My buddy sold the pilot maps on silk within a few days and made nearly $600 in profit. The tin toys paid for themselves the same day, I listed a few of them for sale in my Ebay shop. The Navajo blankets are worth several thousand dollars and as for the pictures of the racehorses – I don’t know but they are worth far more than the $100 she paid for them. So, $1125 was spent and an estimated $5000 was earned leaving a profit of $3850 – and that money, nearly four thousand dollars was made not by selling – but through buying.
I can hear some of you saying “But hey, you have to sell that stuff to make money” – Yes, you’re right, but the origin of the money is the buying, not the selling. None of us walked into that sale with no idea what we were looking for. We all know the market and as dealers, we are all learning all the time. I walked right past the Navajo blankets – and I’ve learned from my mistake – the next day I bought a book on Navajo rugs and blankets. I also got online and began educating myself about old photographs – and the next week I knew the right price to offer for a box of photographs. More money made through buying.
There’s a reason each of us bought everything on the tables – if you buy in bulk you get a better price and – even more importantly – people often miss the trees for the forest. In every case above – there was one item among the lot that was worth more than all of the rest put together. One blanket was more valuable than the combined worth of the rest. One tin litho toy was worth more than all the rest together. One silk map worth more than all the rest. One horse picture worth more than all the rest. This happens so often that you can almost consider it a universal law. By lumping all of the items together, the percieved value on the group as a whole becomes less. There are several lessons that can be taken from that last statement.
Here’s the main thing – and I hope this is clear: you can’t just walk in and buy everything or anything. You need to know what you are purchasing, approximately how much it is worth, and have an idea of how much you can get it for. Hoarders and G-Sale junkies tend to just buy anything and everything – and I have to admit, I love it when they finally have a yard sale. Here’s an example:
Yesterday, I went to a hoarder sale. There was so much stuff. Much of it was priced on the nose, a lot of it was overpriced, and some of it was priced for a very modest profit. I ignored almost all of that and looked for the sleepers – the items that the hoarder had overlooked as being truly valuable…I found my sleeper and ended up paying $1 for an item that I would flip for over $2000 within a few days…
I’ll tell you about that in the next article which will be all about sleepers….