Tuesday, January 6, 2009

Want More Money? Sell Your Stuff

At this time of the year, most people are feeling some regret after holiday splurges. We’re trying to shed bad habits. We’re also trying to relieve the financial pressure we feel as bills are coming due. When there isn’t enough money coming in, one way to rid ourselves of debt is to sell things. These could be items we don’t need, or use, or even like. Or they could be items of a size or magnificence that does not suit our current lifestyle and income. The classic method of selling one’s used stuff is to hold a yard sale, except this is not the weather for it in most states. So we turn to other methods.

We all know about eBay, but most of us don’t use it. And we shouldn’t just jump in, because amateurs never get the best prices. But if you have a collectible possession that you would like to turn into cash, eBay (and other auctions of its ilk) is your best bet for getting the attention of a huge pool of potential buyers. And, more important, for selling your item at somewhere near its full retail value.

The sad fact is that most of the time we can’t re-sell a possession for anywhere near the full price we paid for it. The big exception is a house, but right now, with the housing market in freefall, a lot of people can’t recover the price they paid for their houses. Housing prices will recover. A car, or television, or article of clothing will likely never gain in value as the years go by. Unless they become collectibles. Ordinarily, if you sell something to a dealer, you will be lucky to get 10% to 25% of it current retail value. And that value may be substantially less than its original purchase price. Selling your possession directly is the only way to up your percentage.

You can put an ad in your local newspaper or on Craigslist, or on eBay. In some cases, the ads will be free. Take advantage of the free ones, and see if you get any responses. If not, then it’s on to other venues or to lowering your asking price. You can sell your item through an auction house, although the auction company may take a very large bite as a commission. We’ve all heard about auctions that garner millions of dollars for genuinely valuable items, so an auction house for old paintings, seriously valuable sterling silver, collectible comic book original art, or antique furniture is often the right choice.

You also can place your item in a consignment shop, but these stores take a fairly high cut, so you need to be willing to accept a low dollar figure as your eventual net. And some items just don’t sell, because the stores depend on foot traffic only.

But don’t try any of these venues before investigating them. Talk to friends who use eBay and get tips on how to maximize your profit and minimize your risk. Read the ads on Craigslist over a period of time. Contact auction houses and ask about their typical terms and their buyers. Ask friends if they have had success with a particular consignment shop. If you have social reasons not to want to admit you are trying to resell possessions, then investigate discreet resellers. If you’re not sure that the item you want to sell will be marketable through a particular method, ask. Auction houses will be happy to tell you what they can sell and what they can’t. Talk to consignment shop employees to find out what their most popular items are, and what is the financial level of their customers. Obviously, a thrift shop located in a poor neighborhood caters to a different clientele than an upscale designer resale shop located in a more affluent area.
If you are lucky enough to be able to use the IRS itemized deduction form, Schedule A, another way of getting some financial relief is through deductions when you donate your unneeded items to charity. The catch here is that you are on your honor not to overstate the value of the items. A moldy old couch is worth nothing, so take it to the dump. A nearly-new couch might be worth at most a few hundred dollars. You have to check the price structuring of the charity you select. Some price higher than others. As a rule of thumb, expect to claim slightly higher than yard sale prices for any used item you donate to an ordinary charity. (If you are donating rare artworks to a museum, that requires an entirely different level of appraisal and bookkeeping. I’m assuming that anybody reading this is not at that financial level.) So go inside the Salvation Army store or the hospital thrift shop and look at the prices for items similar to the ones you are donating. Those are the values you must assign. In rare cases, you can donate never-worn, tags-still-on clothing to high-end shops and credit yourself the full purchase price. But you know they aren’t likely to sell for that, so don’t pull a con on the IRS. Settle on a fair price in today’s market.

Vintage items are harder to price, but the same method applies. Go to an antiques mall and find out what others are charging for their beautifully restored furniture pieces. Price your own similar piece lower if it needs some repairs or refinishing. Hundreds lower. Go online for prices on vintage garments, but remember, these prices are for attractive, cleaned, and mended garments, not the smelly, stained dress you found in the back of your late aunt’s closet.

The worst aspect of reselling is dashed expectations. You know that vase is art glass and it’s worth a lot of money. But it’s so hard to find a customer willing to pay what it is worth. It’s also a lot of trouble. If you have a house full of such items, at some point you may have to just call a junk dealer or auction house and let the pros make the profits. Your time is worth something, after all. Maybe you should go to Plan B and look for a moonlighting job. It’s a lot easier to trade your time for cash than it is to spend time trying to sell your things.

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