Education & Training

Before the Auction: Buying for Resale

Once you run out of stuff in your closet to sell, how do you find new material to put on the auction block? Well, typically, you buy products cheap and resell them online for more cash. That's the name of the game, really. The problem is that other sellers are trying to do the very same thing. So, how do you beat them to the punch and bring in the hottest merchandise? Moreover, how do you ensure that the products you buy won't be yesterday's news when you go to list them, leaving you with nothing but a cluttered garage? Read on to find out!

Old Standbys

If you are going to be in the online auction business for the long haul, you need to be aware of what products are continual sellers online. Even better, you should specialize in a few of these segments so that you don't overextend yourself. This will allow you to form a real expertise in specific areas and notice new collecting trends more easily, allowing you to catch the latest wave before it breaks.

Popular favorites include advertising paraphernalia, autographs, books, coins, comics, dolls, entertainment memorabilia, glass, porcelain, and pottery, sports memorabilia (trading cards), stamps, and toys--especially action figures and all manner of bears. Of course, your own interests should be your guide when determining what categories and niches you choose. If you are a merchant with suppliers that provide you with new, brand-name products, these also sell well via auction or fixed sale, especially audio CDs, books, computer hardware, jewelry, musical instruments, software, and toys.

The Sixth Sense

Having the intuition to recognize what's going to be hot before it heats up is a must for any successful auction seller. Fortunately, this skill isn't heaven sent. There are common sense ways to get more hooked into your collecting discipline and discover what is going to be big before it hits. In general, this means forming relationships with other experts, enthusiasts, and industry professionals.

There's several ways to do this. Number one, you should sniff around major retailer's stores and ask employees what products are selling out and which ones are languishing on the shelf. Also, ask what products are being heavily promoted and reordered in mass. You might even inquire if significant shipments from the manufacturers are available or unavailable. Often manufactures increase demand by decreasing supply. Also, ask yourself what's on sale and what's been marked up. This certainly shows you what's hot.

Other advice? Don't shy away from used, secondary-market shops, which resell vintage and used goods. Ask these enthusiasts and insiders what is on the horizon. If you become friendly with some of the owners and employees at these stores their comments can be invaluable. Also, read the collectible magazines, trade papers, Web sites, and message boards that cover your category. Don't dismiss the non-slick collectible periodicals. Many of the less fancy paper trades have the freshest information. Reputable examples include Goldmine, Toy Trader, and Antique Journal.

In Tune

All savvy auction sellers and collectors watch how events in the media and entertainment world affect their category. Understanding the world around you can mean dollars in your pocket. For instance, Pete Rose memorabilia is enjoying new interest due to his campaign for reinstatement into baseball. Also, Tim Burton movie memorabilia is on the move, thanks to the release of his film Sleepy Hollow. Be especially aware of new movies and television broadcasts that have colorful characters and stars. You never know, you might spot the next Marilyn or Ken Griffey Jr.

Market Watch

Finally, like the stock market, don't try to beat the collectible market every time. You want to buy as the market spikes and sell when it is peaking. It's not wise to hold onto products in anticipation of their increasing in value when they are already way over-valued. You never know how or when an event, variation in public opinion, or decision by a manufacturer could change the collecting climate. This is especially true of products released in conjunction with a publicized product launch or movie opening. The crazes created by these products can be especially ephemeral. You only have to consider Phantom Menace memorabilia to understand this. The smart Star Wars collectors held onto their vintage gear when Lucas's latest installment didn't conquer the universe.