It should come as no surprise that in furniture consignment, sellers almost always think their items are priced too low and buyers tend to think items are too highly priced. So how do we arrive at a price? Though it’s far from an exact science, there is a methodology.
Unlike selling a house, boat or car, there is no MLS system for furniture or Kelly Blue Book to tell us how to value pre-owned furniture, so we must be market savvy. If you are selling a dining set that you paid $15,000 for 5 years ago, you should look at how many dining sets are selling for $15,000 today. You will quickly find that there are a great deal of dining sets available in today’s market. Since most buyers can purchase a new dining set of their dreams for $15,000, how do we create an appropriate economic incentive for a buyer to purchase your pre-owned furniture?
Here are some things to consider when pricing your furniture:
- Start by dividing what you paid in half, then see what is available in the marketplace at that price. Let's go back to our dining set example. What if we surveyed the marketplace for dining sets priced at or around $7,500? How does your set fare against those other sets that are for sale in that price range?
- “Retail” is a fictional number so throw it out the window. "I paid $15,000 for my dining set 5 years ago, but a similar set retails for $25,000!" Retail pricing is a bizarre phenomenon in the furniture industry. Nothing sells for retail. In fact, most furniture stores discount 30% to 40% off of retail. So the dollar figure we want to work from is the price that somebody can actually buy the set for "new".
- On top of retail discounts, we are currently in the midst of a recession and so there are two factors to consider: First, furniture retailers are doing anything to get customers to open their wallets, so there are heavily discounted sale prices to consider. Secondly, many furniture stores offer financing, which you cannot offer as a seller. Again, this may factor into how you decide to price your piece.
- Customization does not translate into resale value. In fact, it may make your sale more difficult. "I paid $200/yard for this fabric on my sofa". Upgraded fabric means that it matches the rest of your home, not a potential buyer’s.
- The question you have to ask yourself is: “Am I searching for a special buyer who is going to appreciate this unique fabric?” If your answer is “Yes”, you will have to price your item more aggressively than you may have anticipated.
- If you have extraordinary furniture, such as pieces from D.R. Dimes, Eldred Wheeler, Kindel, etc., one of the advantages that you have is that people can have it now! Often pieces from high-end furniture manufacturers are built after the sale, meaning that lead times can run from a few weeks to a few months.
- For this grade of furniture, you should be able to achieve an asking price that is closer to the original purchase price. These manufacturers pitch their product as an appreciating asset. While they may not actually increase in value, these pieces do have strong marketability on the resale market.
- Condition is paramount! Tiny scratches can affect the purchase price that you are able to achieve. Try having a friend evaluate the condition of your furniture and ask them to be picky. You want to be sure that you have accounted for imperfections in your pricing.
If you're furniture sells right away, then you likely did your homework and priced it just right. The buyer feels like they got good value for their dollar and the seller walks away with fair market value, some space in their home, and money in their pocket.
Jay Frucci is President and Owner of Furniture Consignment Gallery and http://www.furnitureconsignment.com/
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