Do you want to know how much money antique businesses make yearly? If YES, here are 7 factors that determine the profit margin for antique dealers. Whenever any entrepreneur wants to start a new business, one of the first questions that they usually ask is how much they are likely to make from the business.
This narrative also applies to entrepreneurs who are looking towards opening a business that involves selling or auctioning off antiques and collectibles, such as coins, jewelry, books, figurines and memorabilia. They would want to know how much they are likely going to make daily, weekly, monthly and annually from their antique dealership business and of course, the profit margin they should be expecting from their investment.
There is no one mold-fits-all when it comes to how much an antique dealer is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average antique dealer makes yearly and these factors are;
7 Factors That Determine How Much Money Antique Dealers Make Yearly
Table of Content
- 1. The Size or Capacity of the Antique Dealer
- 2. The Location of the Antique business
- 3. The Types of Products and Services Offered by the Antique Dealer
- 4. The Management Style of the Antique Dealer
- 5. The Business Model of the Antique Dealer
- 6. The Advertising and Marketing Strategies Adopted by the Antique Dealer
- 7. The Number of Years the Business is in Existence
- Estimated Profit Margin for an Antique Dealer Business
1. The Size or Capacity of the Antique Dealer
Under normal circumstances, one cannot conveniently state the amount an antique dealer is expected to make yearly if you do not know the size or capacity of the business. As a matter of fact, the amount a small road-side or mobile antique dealer is expected to make annually will be far different from the amount a standard antique dealer with several outlets will make annually even if they operate in same location.
Of course, the amount invested in a small road side antique business is different from the amount invested in a large and well – organized antique business hence the amount they will both make will be far different.
When it comes to setting up a new business, location plays a major role which is why feasibility studies and market survey are essential before settling for a location. Usually, if your antique business is located in an area with good human and vehicular traffic, an area filled with people who appreciate ancient stuffs or an area that attracts loads of tourists, you may not have to struggle to get people to visit your shop and make purchase.
Please note that the amount an antique business that is located in a low traffic area will make yearly will be far lower when compared to the amount an antique dealer that is located in a high – traffic area in a cosmopolitan city will make.
So, if you want to make it big with your antique business, then you must be ready to rent a store / gallery in a high traffic area, a location with the right demography of people with the lifestyle and purchasing power to buy from you. Please note that you are going to be paying more to rent a store in a high – traffic area as against the rent you are expected to pay in a low – traffic area.
3. The Types of Products and Services Offered by the Antique Dealer
Another important factor that will determine how much an antique business is expected to make yearly is the type of complimentary services offered along – side selling of different types of antiques and collectibles.
No doubt, an antique dealer that goes beyond selling antiques and collectibles, and is into offering online sales and auctions of original art pieces, operating auction houses that bring buyers and sellers together will definitely make more money than an antique dealer that only retails antiques and collectibles, such as coins, jewelry, books, figurines and memorabilia et al.
4. The Management Style of the Antique Dealer
Another key factor that will determine the amount an antique dealer is expected to make yearly is the management style of the business. Trust me, the results you will get when you have a good manager will be far greater than what an average or bad manager will get; definitely their results will be obvious and different. Even if you give the managers same conditions to work and same products to retail.
There are different business models that an antique dealer can adopt and these business model offers different results. For example, the amount an antique dealer that also runs an online store or auctioning portal with deliveries make yearly will be different from the amount a strictly brick and mortal antique business will make yearly.
The amount an antique dealer – business that also sell and operate franchise will make yearly will be far different from the amount a strictly one location walk – in antique business will make. This goes to show that the amount an antique dealer – business will make yearly is dependent on the business model of the dealer.
6. The Advertising and Marketing Strategies Adopted by the Antique Dealer
Another key factor that will determine the amount an antique dealer can make yearly is the advertising and marketing strategies adopted by the business. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings but you may be expected to spend more.
But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect an antique dealer that is engaging in aggressive advertising and marketing to make same amount yearly with an antique dealer that is passive with its advertising.
7. The Number of Years the Business is in Existence
Lastly, another key factor that will determine the amount an antique dealer is expected to make on a yearly basis is the number of years the business is in existence. In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is properly managed. This is so because you would have over the years won loyal customers.
For example in your first fiscal year (FY1) you might make two hundred and fifty thousand dollars ($250,000), in your second fiscal year (FY2) you might make seven hundred and fifty thousand dollars ($750,000) and in your third fiscal year (FY3) you might make one million, five hundred thousand dollars ($1,500,000). Interestingly, most businesses including antique businesses usually breakeven from the third year of operation.
Estimated Profit Margin for an Antique Dealer Business
The profit margin of antique business can vary a great deal and it depends on the items in stock and the value placed on the items by people. For example, a figurine that is purchased for $2,000 can be auctioned for a whooping sum of $2 million depending on how desperate the figurine is needed by buyers.
As a matter of fact, the Antiques and Collectibles Sales industry has continued to grow due to the growing love for ancient stuffs. Antiques and collectibles are timeless yet discretionary items, making this industry highly sensitive to changes in disposable income.