As a small business, we benefit from keeping things, well… small. An affordable payroll, an easy-to-manage yet robust inventory of rare books, and a lean overhead allow us, in a counterintuitive way, to compete with larger firms. There may be only two of us, but pound-for-pound, we believe we are one of the strongest independent book companies out there.
As I alluded to in last week’s post, however, there are times when small just can’t compete with large. A few years ago, we received a call from a man who wanted to have his father-in-law’s book collection appraised. He had met with a few other sellers and did not like their manner (some booksellers tend to be grumpy), so he eventually found us. We arranged to see the collection in order to provide him with an appraisal letter for insurance purposes.
We spent several days surveying the books, and there were some really fine gems. Among the collection was a signed Oscar Wilde, a limited edition of Hamlet illustrated and signed by Picasso, and a book inscribed by F. Scott Fitzgerald. We documented and appraised the worth of the collection, and we gave him the letter of appraisal.
Mistake #1: This was one of our very first high-end appraisals, and we gave this man the list before we received payment. We assumed he would send the check when he said he would, but it never came. Drats! Never turn over an assignment until it is paid for in full.
Mistake #2: We never asked him if he was working with other booksellers. He could have lied, but had we asked, we might have been tipped off that he really only wanted the appraisal letter (with estimates in full retail, not fair market) so that he could shop the list around to other local booksellers and auction houses. Serendipitously, with the estimates in full retail, no bookseller was able to make an offer that came close to what he wanted and the collection remained unsold.
Mistake #3: We dealt only with the son-in-law, not his wife or her father (who owned the collection), so he was able to sidestep us by hiding behind the “I’m just the messenger” routine. We’ve found that if you’re going to make an offer on someone’s collectibles, it’s always ideal to avoid the proverbial middleman who can often stall, confuse, and sabotage negotiations.
Mistake #4: Even if we had known that he wanted to sell all along, we couldn’t have afforded the collection anyway. At this point in our early career, we only had our small bank account and had not yet applied for a business loan. We had been encouraged by our accountant to apply for a business line of credit, in case this very scenario were to happen, but we "never got around to it”. Now that we really needed a credit line to write this man a large check, we simply could not do it.
In the end, the family eventually paid us our appraisal fee (a few months later…whew!) and they consigned the entire collection to a local auction house. We waited for the sale and then bid on the items we really wanted (and could really afford), and actually won a few of them. We were lucky that this scenario didn’t turn out worse, as it certainly could have. Since then, we always demand payment ahead of time, and we’ve learned how to ask better questions with the goal of uncovering someone’s true motive. We applied for a business loan and are now able to buy books on credit so that we can grow our inventory and ultimately our business. We’re still rather small in the scheme of things, but are able to compete with larger firms (with larger bankrolls) now that we have the right tools.