Industry sector: Retail and wholesale

Antique dealer: Estimating stock costs

Your market research will have helped you to estimate how much sales income you can expect to receive over the next twelve months.

Now estimate how much your stock will cost you. This can be difficult in the antiques trade because:

  • each piece will normally be priced individually, depending on its provenance, its condition and the likely level of demand
  • there may be a significant interval between buying an item and selling it
  • some pieces may have to be significantly reduced in order to get rid of them, while others will appreciate considerably in value
  • customers are likely to haggle
  • trade customers will usually expect a discount
  • items bought and sold at auction effectively cost you more because of buyers' and sellers' premiums
  • some stock may become damaged or deteriorate

As a very broad rule of thumb a middle of the road antique dealer stocking a wide range of items might typically expect the cost of stock to amount to roughly two thirds or so of total sales.

However, this can vary significantly from dealer to dealer. If, as part of your market research, you buy enough stock to sell at an antiques fair or market this will give you an indication of the proportion of your sales income your stock is likely to cost you.