Antique malls are not in the business of antiques…

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  • Posted by kindle

Antique malls are not in the business of antiques. Okay, let that sink in. Wait, what are you saying? What I said was antique malls are not in the antiques business.

How can you say that Ed? I go to one all the time and it is jammed with antiques.

Yes, but let me explain.

Antique malls are in the space rental business. They are in the business of renting you space to sell your antiques.

Antique malls make it easy for some folks to sell off their used antiques and items when it is time for them to downsize. They also make it easy for someone with an interest in the antiques business to have their own small antiques business without all the hassle and expense of owning their own business. It can be a win – win scenario for many.

However, the antique mall is only acting as the agent in the process of selling your antiques and collectibles. And to do this, they need to make a profit; however their profit and yours are two different things.

When you have a booth in an antique mall, you are agreeing to and signing a contract for a certain amount of space within that mall that you rent monthly. This square footage becomes “your store”. You place inventory within its boundaries and put a price on it. You may bring items that you have collected and owned for many years, or you may buy inventory from a variety of sources to fill the space, but the result is the same: a space for your wares.

Also on that contract, it will specify other terms, such as that the mall will act as agent and conduct sales on your behalf, provide basic utilities, pay credit card fees and so forth. Each mall’s policies are as different as each mall’s owner. Another thing you agree to in the contract is a commission. For many malls it’s 10% of each of your sales.

This means that in addition to the fee that you pay for your square footage of floorspace, you pay a premium to the mall for acting as your agent. Again, this can vary widely.

The mall will have no other obligations to you other than what is spelled out in the contract that you both sign. In most instances this works out fine for both parties most of the time.

So for example, a person who wants to start an antique mall will have to do some math. For a mall with say 20,000 square feet, the owner must divide that overall  space into enough “dealer spaces” to take in more money than they are paying the building owner. For this example dealer spaces of 10’ x 10’ give each dealer 100 square feet. They could fit nearly 200 dealers in, subtracting space for the mall’s own needs such as office space, aisle ways and storage.

The next bit of math comes in figuring out the commission rates and credit card fees. Will the mall absorb the credit card fees ( I pay 2.7% – Many rates are higher) or pass them along to the dealer? What does the commission pay? Does it cover insurance on the business, advertising, supplies, or employees? This is where is becomes difficult to calculate because if the mall owner gets it wrong, and charges the dealers too little, they won’t be successful, yet if they charge too much, they won’t attract dealers.

Once this is all calculated and the mall opens, the primary function of the mall is to attract renters to sell their wares. This is why I say antique malls are not in the antique business.

When dealers are successful, they stick around, but if they find that it is not as fun as they thought, or requires more driving, more cash outlay, affects age and health concerns, or they run out of their own items to sell, they may leave the mall. This puts the mall back into it’s primary mission, renting spaces.

As a dealer in a mall, you also have to remember that if you don’t sell enough of your wares to cover your contracted rent in any given month, you will have to pay the mall the difference every time. This is again why even a small booth must be attended to, and worked like it is a small business, because it is.

In a mall you have 10, 20, even a 100 or more dealers who all have merchandise to sell, so especially in the larger malls, maintaining a specific quality level can be difficult. Some malls are very good at setting the tone and presenting a very traditional antique store feel and others seem to include collectibles, reproductions, crafts and “flea market” type items.

It has to be a partnership. In this partnership the mall is dividing all the operating expenses of the business between all the dealers evenly and taking a profit to stay operating. And don’t forget, when you sell in a mall, every other dealer within the mall is your competition.

On the other hand, an antique store owner/operator is in fact, in the business of selling antiques. Many chose this vocation because they truly love antiques. The unfortunate truth is they may  have a harder time of it, because they don’t have vendors renting spaces which helps to pay the bulk of the expenses.

A small single owner antique store is an island. Every expense and job must be handled by him/her and the success or failure of the business is never guaranteed. This owner must pay rent, utilities, insurance, inventory costs, fees and any employee costs out of their sales. If they don’t have enough sales within a given month, these costs come from the store’s profits or owner’s personal funds. There is no safety net that comes from the rent of dealers.

The advantage the single person owned store has is complete control. They are choosing the inventory piece by piece, so this means the quality is usually higher. They control everything from what music is on the stereo when you are shopping, to the color of the paint on the walls. This is usually a much more intimate shopping experience with more focused customer service because most of the time it is a one on one shopping situation.

This can benefit the shopper in many ways as they don’t have to wait for phone calls on price negotiation, or to wait for a manager to resolve an issue. In addition some folks just don’t have the time nor the stamina to walk through a 20,000 or 30,000 square foot mall.

Each business has its advantages and disadvantages for both the owner and the customer. There is a place for each and each can benefit their customers as well as each other. I wanted to showcase the differences and the reasons they are different. I have sold in malls as well as owning my own store.

Either way can be challenging and rewarding. It’s a big world out there and there are lots of wonderful antiques to be found. If you find a store you like and they treat you well, reward them with your repeat business and everyone will reap the rewards. The store is rewarded with the ability to stay in business by earning a profit, and your reward is being the owner of new, cool and awesome antiques. So get out there and get shopping!