I Can Has Moneys?

So our philosophy when setting up our booth at the flea market was similar to the thought process in pulling items to sell at a yard sale - anything we get for it is profit.

Now of course, that’s not strictly going to be the case. In hardline dollars and cents, there was a massive loss in the set of stereo speakers that I paid $300 for that I sold for $30. Until you figure in the fact that I paid $300 for those speakers in 1993 and hadn’t turned them on for at least a year. In the meantime, the $30 that I got for them can be immediately applied to a car payment, which all goes to our concept of snowflaking.

We chose items to sell at the flea market that we no longer use AT ALL, and no longer receive any joy of ownership from. If it’s something that we find useful even once every three months, it doesn’t get sold at the flea market. We’re looking for stuff that not only would we not miss it when it was gone, but we had forgotten we owned in the first place!

So once we selected an item, how did we figure out how to price it? We went through a series of simple steps and had a couple of rules for our pricing.

Rule #1 - Anything is worth $1.

I didn’t want to deal with change. It’s heavy, and messy to deal with. I’m looking for convenience, and there’s nothing convenient about a pocket full of change. So if we didn’t think something was worth at least $1, we put it on a section of the table that was $1 BOGO items. Realistically, my tenet of “anything is worth $1″ is pretty true, and I only mentioned the BOGO if someone seemed disinclined to pay $1 for an item. The idea is not only to make money but also to reduce clutter, so getting stuff out of the house was as important to me as getting maximum value for the item.

Rule #2 - Forget what you paid for it.

That money is gone. An you’ve gotten all the joy out of the item, or you’d still be using it or looking at it on a shelf rather than selling it at a flea market. So what you paid for it is irrelevant. It makes no difference that I paid a couple hundred bucks for an XBox. What matters is that I don’t play it anymore and someone was willing to give me $60 for it.

Rule #3 - Don’t mark anything with your final price.

There are no firm prices at a flea market. If you try to draw a hard line on pricing an item, you’re doomed. People who frequent flea markets love to haggle, and haggling is a contest. If the customer pays less for it than is on the label, they win. If they pay more for it than your bottom-line price, you both win! I frequently took half the sticker price on items, just to move them. A dollar in the hand is worth $5 on the price tag.

Rule #4 - Mark it $5 more than you’d pay for it at a flea market

That was my philosophy on a lot of things. If I’d pay $40 for something at a flea market, I marked it $50. That gave me not only a good flea market type price point, it also left me built-in haggle room.

Rule #5 - Beware of pricing things at mental sticking points.

People have different ideas of what’s a lot of money, but there are always certain things that you see consistently. $100 is a big number for a flea market item, so if you want $100 for something, you’ll get closer marking it at $95. $125 is a less scary number than $100, for some reason. I had several items marked at $45 just to avoid the $50 number. The psychology of pricing is important, because if your sticker price is too high, you won’t get the change to haggle, and that’s where you make your sale - when you talk to people.

So there are 5 rules (or tips) for pricing things at a flea market. Eventually I promise I’ll get to a breakdown of what sold and what didn’t, and why I think those things succeeded or failed.

I’ve read a lot of personal finance blogs where people talk about having garage sales, selling things on eBay, or selling things on Craigslist. All of those are great options, and I’ve done all those things myself for fun and profit over the past few years. But the one thing I haven’t seen anyone talking about is setting up a booth at a flea market. And in my opinion, overlooking the flea market would be a mistake if you have a bunch of excess stuff in your house (and let’s face it, you do!) and want to make a little extra money for it.

The flea market is to a yard sale what eBay is to Craigslist. Where a yard sale has a lot less overhead, you are dependent on the traffic in your area, or what you can generate with a newspaper or craigslist ad. With a flea market, you have a little bit of overhead and more hassle in moving stuff to the site for sale, but you have the benefit of increased traffic as well. Suzy and I have been planning to get started selling at a local flea market for a few months, and this weekend we bit the bullet. Here’s what we did, what we learned, and what we made in the end.

First off, we investigated two local flea markets. There is one about 30 minutes to the south of us, and one about 45 minutes north. We got up early one weekend morning and headed out to look at both markets and decide which one would be more profitable. The southerly flea market didn’t seem to have a great deal of traffic, and required a business license to have a booth. Most states and cities do not require a business license if you’re just reselling things out of your home, but check the laws in your area first.

We gathered up all sorts of stuff for our first foray into the flea marketing world - books, VHS movies, clothes, electronics, kitchenwares, whatever we didn’t want in the house anymore. We spent quite a bit of time pricing things and putting it all into plastic storage tubs for ease of transport. We have a pickup truck and a Honda Element, so we can move a lot of stuff at one time. Our initial outlay of cash was pretty low, as the rent for an outdoor space with two tables at the flea market we chose was $8 per day. We took two booths for two days, for a total outlay of $32.

We decided to spend $95 on a pop-up canopy from Wal-Mart, because the idea of sitting outside n August in North Carolina without shade seemed ridiculous to us. It turned out to be a great buy, as the tent not only saved us from the sun, but made our wares a little more attractive to people looking to get out of the sun for a minute or two. The tent went together in just a few minutes, and made a world of difference in our first flea marketing experience.

My first mistake on the weekend of the flea market was staying out wayyyy too late the night before. Flea markets open at 8AM or earlier, and the people that sell at flea markets also like to buy at flea markets, so the fact that we weren’t set up by 7:30 on Saturday cost us some customers. But the main reason it was a mistake to stay out til 2AM playing poker was the fact that we got up at 5 to load the cars and head out. That was brutal, so next weekend we plan to load the cars on Friday. We’ll still have to get up at 5, but we then can be set up by 7:15 or so. But when we finally got everything set up and set out, we started to move some things. Sales started off slow, but momentum built as the traffic picked up and more people came by.

We approached pricing things as we would at a yard sale, with complete disregard to what we originally paid for the items. These are things we are not using, so they no longer bring us any joy, and thus have no intrinsic value to me. $5 for something I paid $100 for ten years ago is better tha tripping over it on the way to the fridge for a midnight snack.

Another pricing tip - if you put price tags on your items, price them a few dollars higher than what you actually want for the item. Haggling is part of the flea market experience, and most folks who go to flea markets enjoy the haggle. I do to, so I tended to price things in increments of $5 more than I actually wanted for them. I sold a boom box for $5 that I had marked at $10, and a full-length mirror for $10 that we had marked at $20. It was worth the $10 just to not move it again!

The first day we had a whole table dedicated to books, at $2 per paperback and $3 for hardbacks. We also had a ton of VHS movies for $1 each. The VHS movies moved well, but when we sold two books all day, I made the executive decision not to bring books back and focus on more big-ticket items. Note - for us a “big ticket” item was $20 or more. We aren’t trying to pay off the car in one fell swoop here, just build up some momentum in our snowflaking and help make ends meet this month since I didn’t have much in the way of freelance writing work last month. My goal going into the weekend was to cover expenses (including the tent) and clear $100 profit.

We certainly exceeded our expectations, selling $191 on the first day, for a $56 profit and a freeroll on anything we sold Sunday. Sunday saw us with a better understanding of what people were looking for, so we targeted our selling better and sold a ton more. All total, our profit for the weekend was a whopping $456! We’ve already made plans to expand to 3-4 booths next weekend, and part of our profits this weekend will go to buying an additional tent so we can have more covered shopping area, and more shelter for my exceptionally fair-skinned wife.

I’ll be back later in the week with a detailed list of what we sold and what I considered to be our best decisions of the weekend.