Collection Liquidation - Profit or Loss?

Kevin
People who know me know I do not sugarcoat anything.I tell it how it is and how I have lived it.I am not a friggin wannabe.Been there done that
Had 5 or 6 Corvettes in front of my house at any given time.Had all the desireable ones53,57,63 sw 67BB roadsters ect
I am also not an expert and some of you points are valid,but I am doing what this thread is about.Selling a collection.I am not a photographer,nor a dealerand am not perfect.I do not live in a perfect world.All i am doing is creating some income and believe me I thank the lord every day when I get up for having this stuff to sell.
I do not collect junk and most of my collection is(was) prestine.
I am living this thread and when it is said and done I will have a select few knives that are going in the coffin with me.
Les and the guys have a different slant on things than I do right now and that is how it is BUT DO NOT TELL ME THAT BLACK IS WHITE.And this thread is about what I am living day to day
Regards
 
Kevin,
You started a great thread. Where do you think would be the best place to liquidate a collection? Ebay, forums, purveyors or shows? Jim Treacy
 
ptgdvc said:
Stephen F,

Whatever floats your boat is fine with me. It is your money and your escape, enjoy!
I just can't afford that level of indulgence. Caveat emptor, because escapes can become traps.

P
Click to expand...

Peter, when prospective purchasers and new entrants to the market stop buying because they become overwhelmed by all the homework and caveats they face, what happens to our carefully chosen collections then?

The very principles upon which so many buy their knives may eventually be the instruments of their devaluation.

Stephen
 
WoodWorkGhost said:
If a seasoned and educated collector such as yourself can make mistakes (and we have all made them including me) imagine what the newbie collector faces.

As PTGDVC so eloquently puts it (as he usually does) "Caveat emptor, because escapes can become traps.

Im going to use that in my next book! <G>

WWG
Instigator of the "I" word in custom knife circles.
Click to expand...

WWG : This illustrates my point ....... why is it a mistake .... terminology is everything!

By classing it as a mistake it implies that one has chosen the wrong knife: Why do we say this, because it hasn't made any money? If that is the reason, then we imply that the ONLY reason to buy a custom knife is to make money!

It is a FACT that not all, but only relatively small % of custom knives sold will make any money if you talk about the total volume sold. A select few makers will offer good opportunities for this if you choose correctly.

My point is not about the right or wrongs of this aspect of collecting, or the personal motives people have for it. My point is that by over emphasing something that is not that readily achievable we create an expectation that eventually sours alot of existing and potential new collectors ..... and eventually everyone suffers.

Stephen ( the grumpy!)
 
Stephen F said:
Peter, when prospective purchasers and new entrants to the market stop buying because they become overwhelmed by all the homework and caveats they face, what happens to our carefully chosen collections then?

The very principles upon which so many buy their knives may eventually be the instruments of their devaluation.

Stephen
Click to expand...

Stephen,

I disagree, wholeheartedly.

1. Newbies that don't do their homework deserve what they get. If they are not willing to put in the time, they should be the collectors that use everything that they get, and not worry about what they have tied up into it.

2. KNOW who you are going to sell your collection to. By this, I don't mean the whole thing. Enough of the collection that you have some breathing room. Right on this Forum here, if I needed to sell my "Top 10", I'm pretty sure that I could, maybe even to you, Stephen.

3. I'll say it again--Piece first, maker second, price third.

The individual piece is the most important thing. You have to love it. You have to be married to the idea that you are going to be STUCK with it as a "graveyard piece", and will have a hard time giving it away. This is a safe perspective, and will allow enjoyment of the knife, as a "museum" knife, to quote another collector.

The maker is the second of the equation. Love the maker, love the piece, buy it, and there are so many variations to that.

The Loveless drop point will bring top dollar. Semi-skinner man? Less desireability, lower price. "But, but, you say, the semi-skinner is a more useable knife!" Yup, and not nearly is attractive. The Big Bear subhilt is the
most desireable, but also the most expensive. It helps if you know some well-heeled collectors, like (fill in the blank with those that you know, I'm not giving away my sources here.:D )

4. As long as I know 20 people that play the game like I do, I'll do well for myself. THIS has been borne out of experience as well. When you have a finite time to handle business, you are shooting yourself in the foot. If it takes 10 years to amass a collection, 90 days is pretty unrealistic, no? 1 year is pretty realistic, and buys some space to think. IF I had 90 days, I would move the top tens, and expect to bequeath the rest to my nephew.

Best Regards,

STeven Garsson
 
Kohai999 said:
Stephen,

I disagree, wholeheartedly.

1. Newbies that don't do their homework deserve what they get. If they are not willing to put in the time, they should be the collectors that use everything that they get, and not worry about what they have tied up into it.

2. KNOW who you are going to sell your collection to. By this, I don't mean the whole thing. Enough of the collection that you have some breathing room. Right on this Forum here, if I needed to sell my "Top 10", I'm pretty sure that I could, maybe even to you, Stephen.

STeven Garsson
Click to expand...

STeven, your arguments are logical, but they are also reinforcing my point in that you paint a picture of complexity: Its my hypothesis that this very complexity will lead to either over analysis and "safe" buying, or a rejection of the market completely by propsective collectors. The established collectors have as much as a responsibility as the makers and dealers to attract new blood. If we over emphasise the profit motive and the complexity, and preach self fullfilling prophecies we may fail!

...... this is actually good fun!

Stephen
 
The last show I went to I did a couple of Impulse buys.A Crowell,Neely,Rodebaugh,Williams,Diskin,Farr,Williams,Rexroat(who is that)Ferry,Bradshaw,Fitch andWheeler.All impulse buys.Probably in Les's eyes all overpriced.
Randy
 
Stephen F said:
STeven, your arguments are logical, but they are also reinforcing my point in that you paint a picture of complexity: Its my hypothesis that this very complexity will lead to either over analysis and "safe" buying, or a rejection of the market completely by propsective collectors. The established collectors have as much as a responsibility as the makers and dealers to attract new blood. If we over emphasise the profit motive and the complexity, and preach self fullfilling prophecies we may fail!

...... this is actually good fun!

Stephen
Click to expand...

1. Stephen, it is an inherently complex hobby. In the same way that coin, stamp, and comic book collecting is inherently complex. Sure, it seems simple enough in the beginning, but when you get into it, it takes on a whole different aspect.

2. You START out teaching collectors about the aesthetic, function and elevated craftsmanship that custom knives offer. Unless they have thousands of dollars to burn, you work them up to big ticket items, you don't start out with something that is guaranteed to bring on shock!:D Of the 30 or so collectors that I have brought to the community, maybe 5 are still active. You have to work towards high numbers of collectors so you can get some that stay involved.

It all depends how serious you are.

Best Regards,

STeven Garsson
 
Hi Stephen,

If you have done your homework and chose correctly, those knives you purchased will be the same ones the new collectors (who have done their homework) will want. Consequently, your collection will be worth more.

My hobby is coin collecting. The phrase every numismatist knows is "buy the book before you buy the coin". Meaning do you homework on the coin before you buy your first one. You don't simply walk into a coin show and buy the first shiny silver dollar you see. Well you can...however you will probably take a loss.

Fortunately for coin collectors such things a population reports and buy/sell spreads are available to those who will do the research. Without a doubt the hardest part of coin collecting is grading. This is where you have to really know what you are doing and usually for the seasoned collector this is where you make or lose money on the coin.

In the entire world there is only 1 book dedicated to custom knife buying (you may have seen the synopsis in the current issue of Knives Illustrated :D.

This book was written with beginners in mind. It only touched on custom knives with regards to the "I" word. What collectors like Bob are looking for is a guide, similar to the ones that have been written on factory knives. These guides are an incredible resource to factory knives as are similar books written on coins.

Due to the diversity of knives, materials and makers there will never be written a comprehensive book like this on custom knives. Consequently, it is up to each collector to create their own book on each maker they collect or want to collect.

This of course takes work and research and subsequently takes the fun out of collecting for most custom knife buyers. I bought what I liked until I spent over $10,000 and got back about $5,000 when I sold them. Even before I got my MBA I realized that was a losing proposition.

With all the information on the Internet, let there be no doubt that some collectors, even new ones, are gathering at least rudimentary data on knife makers and how their knives perform in the after market.

As Kevin pointed out even some of the better known ABS makers work of a few years ago is not what people are looking for now. Imagine the ABS MS landscape in just 5 years. All those high speed JS makers, doing excellent work with value pricing.....there are going to be a lot of MS Makers out of work.

Here is some research for you and other ABS collectors. Identify the top 50% of the ABS makers (you set up the system by which you make the choices). Anyone in the lower 50% sell now. Do this every year for the next 5 years. You will notice at least 25% of the makers in this years top 50% will no longer be in that top 50% five years from now.

Why will this happen? The bar for making your JS and/or MS rating is being raised every year. Many of those makers who do the quality of work to attain the MS rating, relax and sit on their laurels. Not realizing that the ABS and fellow makers through things such as the School in Old Washington, Hammer-In's and shows are giving invaluable information to new makers.

However, the ABS is doing nothing to educate buyers and bring new customers into the market place. Consequently, those makers who are not doing this are going to slip into that lower 50% and subsequently fade away from the collective consciousness. Only the most hard core collectors will know their names and seek their work. This of course will be to fill a hole in a collection not to profit from re-sale. Of course this knife will be purchased only when a more than fair price (read loss by the seller) can be reached. Once the hole in the collection is filled, there will be no more need of this makers work.

WWG

Man someone should be writing this down! :D
 
If I were to sell my collection right now, there would be knives on which I would lose money, some I would break even on, and some I would make money on. As a hole, I think I would make a little profit, but not much.

When I started, I collected knives that I liked. That was the only criteria. As I became more experienced, and after reading the sound advice provided by Les, Steven and others, I became more knowledgeable. I still only collect knives that I like, but now more thought goes into the investment part of collecting.
 
nifrand said:
The last show I went to I did a couple of Impulse buys.A Crowell,Neely,Rodebaugh,Williams,Diskin,Farr,Williams,Rexroat(who is that)Ferry,Bradshaw,Fitch andWheeler.All impulse buys.Probably in Les's eyes all overpriced.
Randy
Click to expand...

Randy,

You know that we are tight, man, and I do love you like a brother!!

Impulse buy, is a BAD impluse buy if it CAN't make you money, and you need to. (This is a predisposition to buy work that cannot be resold, in that there are maybe 2 people, besides the maker, who like the knife, enough to buy it)

If you buy stuff that YOU like, and not many others appreciate that aesthetic, getting mad at anyone else but yourself is an exercise in frustration.

Of the makers that you listed above, 2 are VASTLY interesting to me, and 2 others mildly so. The piece that I know you have/had from one maker of the 4 is not a piece that I personally like.

Are you going to be mad at me for not buying it?

Best Regards,

STeven Garsson
 
Kohai999 said:
1. Stephan, it is an inherently complex hobby. In the same way that coin stamp, and comic book collecting is inherently complex. Sure, it seems simple enough in the beginning, but when you get into it, it takes on a whole different aspect.

2. You START out teaching collectors about the aesthetic, function and elevated craftsmanship that custom knives offer. Unless they have thousands of dollars to burn, you work them up to big ticket items, you don't start out with something that is guaranteed to bring on shock!:D Of the 30 or so collectors that I have brought to the community, maybe 5 are still active. You have to work towards high numbers of collectors so you can get some that stay involved.

It all depends how serious you are.

Best Regards,

STeven Garsson
Click to expand...

STeven: Why is it a complex hobby?

Cheers,

Stephen
 
Stephen F said:
My point is not about the right or wrongs of this aspect of collecting, or the personal motives people have for it. My point is that by over emphasing something that is not that readily achievable we create an expectation that eventually sours alot of existing and potential new collectors ..... and eventually everyone suffers.

Stephen ( the grumpy!)
Click to expand...

Dear Grumpy Stephen, :p

How is discussing this topic "over-emphasizing" it? It is a theme you have returned to in every post in this thread. Different views are being expressed. Some people are firmly in the "buy what you like" camp. Others take a very cautious approach with an eye toward short or long term return being a significant factor. A lot more are in the middle.

I just don't get that discussing the investment aspect of custom knife has as a consequence the stifling of buyer enthusiasm in any general sense. I didn't think about investment at all when I first ventured into the field. I think about it a lot more now. It sure hasn't turned me off of buying. I just don't accept the "either / or" proposition that you are either in it for the pure passion or for the cold cash. The two can co-exist quite amicably.

As for Randy's recent experience I think Keving touched on some valid points. Another might be short term market saturation. If I turned loose 100 forged bowies on the market (and I assume we're talking about the bladeforums market here - I am not aware of Randy actively trying to sell his collection eslewhere) I would expect the top pieces to be quickly snapped up by those in the know and the rest to sit for a while. Which is not to say that these other knives are poor in any respect, just that there are rather a lot of them all available all at once to a relatively fixed pool of buyers.

The photograph aspect can hardly be understated. As Coop mentioned, nobody needs a custom knife, they have to WANT it. A quality photo helps the otherwise fence-sitting buyer WANT the knife enough to hop down and open his wallet.

Roger
 
Hi Randy,

Most people know you are an impulse buyer. Part of the reason for that is because you feel confident in your knowledge of custom knives. Part of the reason is that you like the maker and the other part is you have the money in your pocket at the time.

Whether you paid correctly for the knife at the time (for resale purposes as the collector seems to have switched gears to become an investor) was and is determined by the maker, their position in the market, style, materials used and of course price.

As I have said at numerous seminars and in my book..."The after market is where you get your education about what a knife is really worth".

WWG
President Arbitrage Knives
For pure speed, thrills and profit nothing beats an Arbitrage Knife!
 
I don't understand that "buy what you like" thing. Of course, I buy what I like - but there's a vast number of knives that I like, many, many more than I can afford. So, I'm not going to buy a knife I don't like, but I'm going to look beyond a knife simply being attractive to me. One of the things I'll consider after that is the likelihood I would at least get my $$$ back.

The other response to the meaningless "buy what you like" comment is that tastes change. So when you buy what you like, you need to factor in the fact that you might one day change your mind about it.

This is to say that you can buy what you like, and yet be smart or dumb about it. I'd rather be smart about it. What that means is that I try to buy knives from people who are loosing money on them. I'm not a shark, but if someone is selling a JW Smith folder for $350, or an amber stag handled Newton hunter for $420, etc, I'll take notice.

I have found great value purchases directly from makers (most - not all - makers price their knives so that their first buyer can make a material profit from them), from dealers (not all dealers are well educated on the value of their inventory), and from individuals.

With this said, I think that in the scenario proposed by the OP, I would loose money on most my knives. I have a few big pieces by Don Fogg where I might make enough of a profit to offset all the other losses, I'm not sure. I think collectors whose sole driving principle is to "buy what they like" would loose their shirt.
 
Stephen F said:
STeven: Why is it a complex hobby?

Cheers,

Stephen
Click to expand...

Because the first part is knowledge about what you are looking at. Remember what we wrote about in "Dealbreakers?" thread? Fit, finish and flow will take some people the rest of their lives to learn and master. We ARE talking about collectors here, right?;)

Now factor in thoughts about maker's market position(determined by skills, price/return, and personality(maybe)), and that adds an element of complexity.

Tell me why you think it might be a simple hobby?

Best Regards,

STeven Garsson
 
Kohai999 said:
Randy,

You know that we are tight, man, and I do love you like a brother!!

Impulse buy, is a BAD impluse buy if it CAN't make you money, and you need to. (This is a predisposition to buy work that cannot be resold, in that there are maybe 2 people, besides the maker, who like the knife, enough to buy it)

If you buy stuff that YOU like, and not many others appreciate that aesthetic, getting mad at anyone else but yourself is an exercise in frustration.

Of the makers that you listed above, 2 are VASTLY interesting to me, and 2 others mildly so. The piece that I know you have/had from one maker of the 4 is not a piece that I personally like.

Are you going to be mad at me for not buying it?

Best Regards,

STeven Garsson
Click to expand...
I am not mad at anything or anybody.But do not sit there behind your monitor and try to convince me about knife collecting.
we are all different and that is what makes the world revolve.
I personally do not like damascus.So most of my collecting was carbonblades.
Les I was also a coin collector and someone who has one of the best collections of walking liberty quarters told me to buy the best grad you can afford.Sound advise.I sold a MS 62+ liberty dime collection for a bundleLesI know you are a custom knife dealer but I made more money on Randalls than any of my other stuff 1999 silverproof sets State Quarters.Bought 100 sets for I think 32.00 Sold four sets in California when I was there for $275.00ea.
i know we all have stories
Then there were the Ken OnionsLast one he made for me It was 450.00.
That goofy guy in Reno gave me $3700 for it and a couple more.
But not all of them have been like that.
But like I said earlier,I get up in the morning and thank the lord for the beautiful house,and beautiful placethat I live.And this knife collection has paid for some of it.And by the way I still have some nice stuff,that I really love.
Randy
Ps I would not trade the friends that I have made in this hobby for anythingI am also one of those people who bought the maker.Do not own any from knifemakers I don't care for.
PSS love you too STeven.You are one of those good guys
 
Coin collecting is infinitely more complicated than knife collecting. Yes, there's a lot of printed material available, but there's also a lot more knowledgeable collectors, and less than ethical collectors / dealers. I got interested, and then I decided it wasn't for me. I still have a couple No Motto gold coins though, and a St Gaudens Indian Head Eagle. You've got to love those. :thumbup:
 
I would love to crunch some numbers this weekend and perhaps set-up a database. Anyone interested? Les, you may already have one. I don't believe that knife collecting really needs to be compex....come on now...these are knives, not major corporations your purchasing (I didn't want to use the "I" word), however, some of the same principles apply. Most folks on this forum are well educated and prominient business men.

The big piece to the puzzle is trying to get some real numbers. It was interesting in the last issue of Blade Steve Shackleford posted some of that information on tactical folders with aftermarket value. I'm not sure how credible it is, as he doesn't provide any other data.

Bob
 
jjtjr said:
Kevin,
You started a great thread. Where do you think would be the best place to liquidate a collection? Ebay, forums, purveyors or shows? Jim Treacy
Click to expand...

Jim, you ask a good question there.
First of all let me be clear on two things, I asked a question with this thread I have not yet answered and I collect knives because I love them. I just believe you can break even or make a little doing it. But first let me give you my opinion on your question.

I hate the word "Liquidation" as to me it always projects negative feelings. Having said that, I don't believe there is a good way, some just better than others.

Ninty days would be tough. Now six months would help as you could concentrate on single pieces, maximize profits on some minimize losses on others. And it of course depends on your collection regarding prices paid, how long owned and which makers and styles of knives. I remember an old business associate and mentor of mine used to say "bought right, half sold".

Those few pieces that you just happened to get a good deal on will come in handy. The fact that you have been able to get knives form the "Blue Chip" makers will help. Having good knives bought years ago when you first started will help. Jim, sounds like you have hit a homerun on all accounts.

Ebay: Don't like Ebay for selling, as everyone's just looking for a deal.
Forums: can be good, however sellers are ruining it as we list low then drop every day it doesn't get action. The smart buyer just sits back and waits to snatch it up first after it reaches a rock bottom price.

Purveyors; Here's an interesting example that will point out a scenario for both purveyors and forums.
Say a collector bought a nice MS Bowie three years ago for $1200. He now wants to sell it, so he lists it on a forum for $1200. He finally sells it for $875 after a week or so of lowering it every two days. A well known purveyor who has built a market or a large following for this MS maker is able to get $1500 from his worldwide audience. After commission the collector now gets his original $1200 back not $875.

There are instances where I believe a Forum could net you more.
So what I'm saying Jim is its no one good way to sell a knife. It&#8217;s just finding the best way for the particular knife and circumstance.

So to answer my thread question:
As I'm a relatively new collector, in 90 days I believe I could make aprox. 5 to 10%. In a year, perhaps 30% on my current collection.

My advice to new collectors is to do your homework before you buy. Pick five of six top makers, study them, follow their primary and secondary markets. Talk to them, build relationships with them, buy from them, grow their markets with them. You will most likely end up with excellent collection of multiple knives form five or six excellent makers and the same number new friends.
 
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