Three Part Series- What is the best approach to sell your knives?
When it is time to sell your knives, what is the best approach? Should we take the knives to the next area show, put them on eBay, sell them to a dealer all at one time, or should we hire a traditional auctioneer to sell them for us?
You may be thinking, “Whoa, Scott, where the heck is this coming from? We are having fun collecting toenails here….we talk about buying, so why are you talking about selling?”
Guys one day we will sell. Heck, you never know, you might decide to start collecting butterflies or election buttons (just kidding) or simply want to reallocate your assets, if you will, or could be faced with a forced sale, or worse, an estate sale, you get my point- bottom-line, we need a plan, OK? I think about this frequently as it relates to my collection, my family and their livelihood, and what if something should happen to me. This article is not about a forced or estate sale, so cheer up, but not to think about it at all would be some form of denial, wouldn’t it? 
Frequently I am asked about my auction experience and how the prices realized at auction compare to those obtained through the more traditional one-on-one approach, and more recently, how the online auctions compare, from a seller’s perspective.
Sales for a single knife through the one-on-one approach, depending how common the knife is, it may be the most effective method. However, for old and rare knives, whether you have one or a hundred, there are several considerations that must be taken into account, when the decision to sell had been made. There are different questions you must ask yourself. These questions will assist you to understand what is most important to you in that sale.
They also can be asked independently, but ultimately most be considered/compared/factored with your other answers. It is the comparison process that reveals the best solution/approach based upon your goals/needs.
The individual questions are:
- What is your reason for sale? (Clarity here is very important) This question reveals motivation or lack thereof.
- When would you like to have the sale totally completed?
- What are your price expectations, and how did you determine them?
- If you had to rank on a scale of 1-10, with 10 being more important, what ranking would you assign to your time frame to sell, compared with your price objectives. In other words, after assigning a number value to those two goals which is more important to you, selling within your time frame goal or achieving your price goal?
- Are you willing to sell at a discount or less of a profit, if needed, in order to accomplish the sale within your time frame goal? If not, then you are willing to change your time goal to sell in order to get your desired price?
- How much time/energy are you willing to invest in accomplishing the sale?
- Are you willing to invest money to accomplish the sale?
In consulting with my clients on the options they have for selling their property, I don’t start with asking them how much they want to sell for (their target price) and then advise them on how to obtain that price. My approach is the reverse; tell me why you want to sell and I’ll show you the best approach needed to accomplish that sale.
The price goal, while it is an important factor in the overall decision process, it is not the most important consideration for many sellers.
REASON FOR SALE
The most important consideration is “What is your reason for sale or Why are you wanting to sell?” This question is very important as it provides clarity to the objective and reveals your motivation. The reason you want to sell oftentimes is very closely related to your time frame goal for selling the collection.
In trying to determine how you are going to sell your knife or collection, the higher your degree of motivation the more of potential there is for price flexibility to accomplish that sale, conversely, typically, the lower your degree of motivation, the less flexible you may be.
If, for example, you are selling because you have lost interest in that knife or collection, but don’t have any time constants, then you are probably not as motivated to sell, as a collector who has elected to sell one collection in order to generate the money to purchase a different collection. In this case, the other collection may not be available very long, so time is more of a consideration, that the first example.
While I’m not going to illustrate further, the bottom line is this. Rank your motivation; then compare it to your time frame objective/goal. These two considerations will tell you a lot about your real goals. When I’m advising my premier property clients, I must have the answers to these two questions before I can proceed in helping determine the approach that best fits their needs. These two goals must also be consistent.
TIME FRAME-
Are you willing to wait however long it takes to sell to another collector in order to get your price, or are you willing to sell the knife or collection, lock, stock and barrel, to a dealer, or by auction, in order to effectuate the sale, and achieve your time frame objectives?
I see too many sellers who have gotten frustrated when trying to sell, who just do the best deal that can be negotiated with the next person who expresses an interest. Now that is the time to pick up a deal: advantage buyer/ disadvantage seller.
PRICE EXPECTATIONS-
Probably the greatest single contributor or inhibitor in effectuating a sale is your price; the amount you go to market wanting. It is important that you are an informed seller, someone who has taken the time to become educated on where values are at that time.
A truism exists that most sellers don’t know, and it is this- Sellers don’t actually determine value-buyers do. I talk with sellers all the time who actually believe they can cause a sale at their price, as if it is in a vacuum.
Needless to say, while I don’t plan on selling my collection in the foreseeable future, the true be told, in a general sense I am seller too. A very important lesson I learned from my 25 years of auction/real estate experience is-we are all sellers…it is just a matter when. Every time I buy an old toenail, I am faced with the question of “Can I get my money out of it if I needed to sell it?” You’ve heard the old adage: “You make your money when you buy not when you sell” and there is no doubt this is true, but you ultimately have to sell to “make your money,” or to “get your money back,” otherwise it is locked or frozen in the knife and not in your bank.
You would be surprised by the number of clients I meet with who have this “castle” usually built to their own specs who never considered that they one day would want or need to sell. And because of this lack of forethought, they have added considerable money in a very subjective, or otherwise expressed, “oddball” feature of their home. Or they spent millions to build their dream home only to learn once they began to try to sell-it’s a white elephant! I see it all the time and for your information there is not direct correlation between the amount of money one has and the amount of “smarts” they have.
While values can be subjective, there are a number of factors that contribute to what a knife is worth and attempting to learn what today’s value is significantly aids in the sales process.
In actually determining the price to go to market with, I have observed to extremes that are prevalent today. The first is overpricing. This can occur intentionally or unintentionally. It can occur by a seller who doesn’t want to sale, or who is unmotivated, greedy, or is afraid the consequence of under pricing.
A seller who over-prices runs the risk of developing the reputation of being unrealistic. Moreover, the longer the knife or collection remains for sale the more compounded this problem becomes and the greater the affect this has on the seller’s ability to accomplish his goal. If the seller is a one time seller the damage is of little consequence, however, if the seller is a dealer or a collector with a large collection, the damage has a substantial affect on his ability to sell at all, resulting in buyers shying away, and influencing others with their negative experience. Word of caution: Don’t assume the world of knife collecting is so large your reputation is of little consequence.
The other extreme is under pricing. Typically, this seller wasn’t an informed seller. While the knife or collection will sell out quickly, money was left on the board even if the seller “made a profit.”
The other major mistake I see sellers make is the old, “well, I paid ___ for it, and that’s what I expect to get out of it” or the “well, it appraised for X.” In knife collecting it might be “well, Parker’s catalog says it worth X.”
RANKING THE MOST IMPORTANT FACTOR- TIME VS. PRICE
As we have seen one’s motivation or lack thereof, for an educated seller is often reflected by their price, therefore, we could easily conclude that an seller who has unrealistic prices or continues to hold out for tomorrow’s value today is likely not very well motivated. So, as you think through your goal, if you had to rank which is the most important, is it to sale sooner or is it getting your price?
While you may feel this is not a fair question, and that these goals are not mutually exclusive, allow me to say, prioritizing these two areas clarifies your goals. Moreover, it provides insight to be applied when we begin looking at the various alternatives for selling.
INVESTING YOUR TIME AND MONEY-
The last two areas will be looked at together. How do you feel about spending your time to effectuate the sale? How much time are you willing to allocate to selling the knife or collection? Are you willing to take calls at night and on the weekends to accomplish your goal? Are you willing to drive to meet a potential buyer in order for them to personally inspect the knife or collection? Do you have time to respond to emails inquiring as to the knives? How about the time to make trips to WalMart for shipping supplies or to the post office to ship them back and forth for buyers to preview them? Or spend the time and money to build a website and photograph the knife or collection for potential buyers? Or the time and money to travel to various shows to display them for sale? Truly, the list could go on and on, but suffice to say, I think you have the idea.
This line of questioning is also important, because in today’s hustle bustle lifestyle our time, maybe even more so than our money, is guarded and treasured like gold! And for good reason!
Furthermore, some of the “newer” collectors who have amassed substantial collections may not want to “hit the circuit” of knife shows throughout the region. I realize many of the old timers enjoy the social aspect of the hobby, but some of the newer collectors have acquired their collections, in some cases, without ever going to a single show. (as an aside- this may or may not surprise you, but our wonderful hobby’s roots may have been very much a social event, knife trading started innocently enough as a bunch of old timers visited every Saturday at the town or courthouse square.)
In my work, I see individuals who don’t want to have to commit to investing time, instead, while their goal is to obtain the maximum price, don’t want to have to wait for a sale. Interestingly enough, these individuals are many time very wealthy sellers who simply want to control the sales process, instead of being forced to wait on the market in order for them to accomplish the sale, though they could, without a doubt, wait indefinitely if they wanted.
BRINGING IT ALL TOGETHER- Bulk Sale, Piece Meal and Auction Sales
For sellers who have decided selling is important, that is- actually accomplishing the sale within a reasonable time frame and for the most the market will bear, as opposed to just listing the knives for sale should someone be willing to pay your price, then this guide is for you.
I categorize sellers into two general groups, the seller who approaches the decision to sell more like a business decision is the “goal oriented seller.” The second group is the “price sensitive seller.” As you went through the questions you will fall into one of these two groups.
For the goal oriented sellers, who view the accomplishment of the goal of selling the knife or collection without being forced to sacrifice price just to realize the time goal, then an auction is a definite consideration. We will also consider a bulk sale to a dealer (possibly to a collector) in contrast to an auction. Then we will look at the two basic options of auctions: Online vs. traditional auctions.
For the price sensitive seller, who in actuality is not really a seller, it is hard to advise this group because most of the time there is another agenda at work here. The best bet for them is to keep doing whatever they are doing because more than likely what they are doing now is a function of their real agenda anyway.
In general, experience says a commodity is only worth what someone is willing to pay. The only question is- who are you talking to? Is it a collector or a dealer? Obviously, their values are going to be much different. If it is only worth what someone is willing to give for it, we must ask ourselves what factors/set of circumstances can I create to create the ultimate buying environment so that when that “offer” comes in it is the maximum offer I could/can expect.
The next installment in this series will examine each of the sales approaches’ pros and cons.
May 8th, 2008 at 6:43 am
[...] Part II of our topic of “What is the best approach to use to sell your collection?” In Part I we looked at questions to ask yourself. These questions are pointers to help determine which [...]