" The time has come, the Walrus said, to speak of many things, of sailing ships and sealing wax, of cabbages and kings. "
While reading through the 'Dealer Reports' I quite often come across the notation "Prices are too high" or "He charges too much." It was after thinking about this aspect of the reports that I decided to write a little paragraph or two about my pricing policies since I have been the subject of a number of similar complaints over the years and I believe my polices are probably typical although what follows is my personal and true method and philosophy about how I arrive at my prices for items which I offer for sale. While I can't speak for other dealers, I believe that this article might give the collector some insight into what goes into placing a sale or trade price on a piece.
I have been a collector of Imperial and
Nazi militaria for over twenty years. I became interested in accumulating 'war relics' when a neigbor gave me two WWI
helmets and a
dagger. I was immediately hooked and began accumulating every single thing I could find. My personal approach to a piece was to then study the history behind it, so as to be able to learn the historic context in which it was placed. I found that this combined study of the history and the placing of a piece in its true context offered me a sense of fullfillment that was unmatched by other interests. Soon, however, a new problem developed. I began to duplicate material already in my collection and there was no way to avoid it. What would generally happen is someone would respond to my numerous ads which were scattered throughout the area I live in and offer me a bunch of stuff on which I would make him an offer. As often as not, when I got home and began thoroughly sorting the material, I would find one or two duplicates which were superfluous for my needs.
After a period of time during which similar scenes took place, I began selling off my excess and using the money to acquire new pieces. In this way, my personal collection grew substantially over a period of time and I found myself with more and more material which was unneeded. Gradually, I put together a 'Sale List' of items and sent them out to other collectors throughout the country. At this point, I was considered by other collectors as a dealer. But at this junction, two thoughts began to form in my mind and a decision had to be made very quickly. Was I to remain a 'Collector/Dealer' selling off my excess and continuing to look for other items or was I to try and become a full-time dealer, making all or the major part of my living selling militaria? A very detailed examination of these possibilities led me to an astounding discovery - if I tried to make a living by
selling militaria full-time, I would have to begin to sell repros, since I could not guarantee a continuous supply of 'good' stuff and fluctuations in income could not be tolerated in a normal living enviroment. As an aside at this point, I would like to point out that this fact of life is still valid even today. If a dealer makes his total living from the sale of militaria, in the vast majority of cases he must also sell repros.
There are very few exceptions to this rule. This does not imply that the 'amateur' dealer doesn't sell repros, many of them do, but be especially wary of any dealer who makes his full-time living selling war relics. The chances are good that somewhere along the way he will try to move a bad piece on you.
(Editor's note: Please note that Bill has allowed that there are exceptions to the above and that he is not talking about the honest dealer who sells a repro as a repro.) Once I had decided not to become a full-time dealer, it was natural for me to begin to seriously consider where I wanted to go with my collecting. I decided that the common, everyday type of items that I was accumulating in boxes was not to my liking, so I began to specialise in the very rare and exotic pieces. When a call came through from a prospective seller, I would still rush out to find out what he had, but I would look more critically at his assortment and would buy only if one or two of the pieces were of an uncommon item. The remainder I would pass on or, if I were required to buy the lot to get the one piece I wanted, I would immediately call a few other collectors and sell them the remainders. In this manner, I slowly watched my collection change from a helter-skelter assortment of many similar items to a very refined, sophisticated collection of exotic pieces. Now I was faced with an entirely new problem - how to continue buying rare pieces which were rapidly escalating in value and still not deprive my family of a normal life. The answer was to begin to sell off some of my rarer pieces in order to re-cycle the money into new and more exotic items. The tone of my lists gradually under went a change towards the more expensive, exotic and one-of-a-kind items of interest to greatly advanced collectors (or those who wanted a single, fine, rare piece for the centerpiece of their own collections). It is, for the most part, this type of list which I currently send out to other collectors and this brings me to how I have established my prices.
Let's start with the simple basics. A man calls me to tell me that he has a number of pieces for sale. When I examine the items I find one or two that are of interest to me either as a collector or as a dealer willing to re-sell them. At this point, I must make an offer which is high enough for him to sell the item or items to me as opposed to calling in another dealer or collector. Once I arrive home with my find, I begin to sort and cull all the superfluous pieces out and grade them according to condition. Then I consult the lists of other dealers , throughout the world to see what similar pieces are selling for. I even consult the lists of the fraud merchants to see what they are getting for rip-off items.
Now I have an idea of what the gross profit on the entire transaction will be (selling prices less purchase price/gross). Let us assume for the sake of illustration that I have paid $100 for a collection of items that, when sold, will return me $400. This would indicate a gross profit of $300, which isn't a bad return. However, I am now faced with the selling of the items involved to make this profit. In order to accomplish this, I use two methods - I send out lists to subscribers and I attend militaria shows as a dealer. I charge $1.00 for a year's listings (generally three) of all the items which I am offering for sale.
This list consists of about eight pages of items and prices and costs me approximately $40.00 to print each issue. It currently costs me 20ยข per list to have our outstandingly efficient postal service send them to the subscribers, making a total cost per quarterly listing of $80.00. Since I mail a minimum of three lists per year, my yearly cost to tell potential buyers what I am offering is $240.00, which is $40.00 more than the subscribers pay for the lists. This amount also must be deducted from the Gross profit figure. Now, since no dealer ever sells every single item on his list, that means that he will carry items in stock for a period of time therefore keeping his original investment tied up longer. My own lists average about a 30% sale rate which is probably average. The unsold items are packed into cartons and loaded into my van and begin travelling with me on the week-ends to the gun and militaria shows throughout the area. It is not uncommon for me to drive 700 miles (round trip) to attend a major show and the cost of gasoline, food, and lodging plus the costs of tables must also be deducted from the rapidly dwindling gross profit figure mentioned earlier. For the past seven years that I have been keeping very accurate records, I find that I am actually losing money each year, but the loss is not nearly as great as it would be if I were not selling some pieces off to help defray my expenses. I would have enjoyed not having to sell off items from my own collection, but if I didn't, I wouldn't be able to continue this activity. I know that other collector/dealers must face the same problems, thus the temptation to deal in repros.
Another aspect of pricing which should be mentioned right here is the pricing established by the repro dealer. As an example, there are currently to be seen many ads offering so-called 'parts daggers' for sale in numerous collector's publications. No matter how you cut it, these
daggers are phony. They were not assembled, let alone used, during the period they purport to belong to, and many have newly manufactured parts. If a phony
dagger sells for $100 under these circumstances (and it will shortly become an"original" for a much higher price) how can anyone not justify a price of $150 for an undisputed original? The dealer knows, or should know, what his merchandise is worth on the open market. There is a very limited supply of good, original pieces and an ever-growing collector interest in them. This is the economic law of supply and demand in operation for all to see. The collectors are competing for the supply and are actually bidding against each other for the right of ownership. The dealer who bases his prices on what the market will bear is no different from any other merchant in any other business. If he is wrong the piece won't sell - if he is right someone will buy it. When someone complains to me that my prices are too high, I know immediately that he is willing to buy at a lower price but I can not readily shave my price that much and still cover the overhead that I am operating under. I can not lower my price (thereby increasing the over-all loss) just to be a nice guy. It is totally impractical to ask me to.
There is also the possibility that the buyer who would like a piece "if the price were lower" is actually thinking of buying the item as an investment rather than as an addition to his collection and, with the eventual thought of selling the piece, figures that few other collectors will buy it if he has to pay full price for it and then subsequently add a profit figure for himself before moving it. I personally am unable and unwilling to help him become a dealer at my expense.
In conclusion, I would like to state a rather pragmatic test to determine if a dealer's price is truly "too high"; does the item sell? If so, the price was not too high. If it doesn't sell (and the dealer doesn't lower the price) could that really mean that the dealer doesn't honestly want to part with the item and, in order for him to do so, the buyer will have to part with a pint of blood?
Good Collecting!
Editor's note: Many who are collectors only and do not 'deal' really do not know what a hassle it is to deal, especially through the mail. Many people get into dealing by being a collector. Dealing is a way to offset the cost of their own collections. Others simply enjoy the dealing itself and for those it would be the same if they were dealing in old car parts or antique horse shoe nails. For some it is a chosen profession. But whatever the motive behind a persons becoming a dealer, the aim is still the same - Profit!
If a dealer doesn't make a profit in some way, he can't continue to deal.As for prices, if you say that they are too high, don't buy. The prices will either go down or someone else will get the goodies. Personally, I would rather pay a little more for an item from a dealer that I can trust and know that I have a good item than to take a chance at a lower price and not know the dealer. William Ringler
William Ringler: "Dealer Pricing", "Military Collectors Association - Journal, 1975
It's said a picture is worth a thousand words and nothing could be more true. That's why so much space is devoted to pictures in catalogs, books and just about every other media used to sell something. I see a lot of really bad photos on our web site so I thought I would write this little article to maybe help someone.
