Competitive advantage in antiques business
In two years, Jere Myers will celebrate the 40th anniversary of Jere’s Antiques. How did a guy from small town Sandersville, Ga., become the largest antique dealer in Savannah with 33,000 square feet of inventory?
As a kid he learned to love the process of buying, selling (and sometimes fixing) old furniture from his dad who owned a general store. He often rode with his father searching for pieces people were willing to sell cheap.
Myers and his father sold most of their finds to their local, low income clientele. They shipped the rare, higher quality items to dealers.
When Myers was about ten, he made his first individual transaction. On a buying trip he found a table he liked and borrowed $5 from his dad to buy it. Back home he sold it for $6. The profit was exciting but so was the joy of making its new owner happy.
Myers was hooked. If he could find furniture at its best value, he could make money and pass this value to satisfied customers, whether their incomes were high or low. A few years later he met a young man from England named Vic Hall.
The result is a partnership spanning childhood into adulthood.
Myers’ partner runs furniture buyers who scour the countryside in Britain, France, Holland and Belgium for the best furniture values possible.
These buyers work exclusively for the partnership. Their purchases are consolidated in a farm/warehouse facility outside London. Merchandise is shipped in 40-foot containers to Savannah.
If we rate furniture quality from 1 – 10 (highest), Myers reports growing his Savannah business by importing levels 3 – 10. At the height of his volume business, Myers was importing one 40-foot container every week. Currently, he focuses on levels 5 – 10 and takes one container every two or three weeks.
Because of the expertise and loyalty of his European buyers, Myers can offer the best values to his customers at all levels of quality.
As proof of this, he points to the fact that 85 percent of his sales are to buyers who will resell these items: dealers, designers, and auction houses.
They know value and profit from Myers purchasing power.
Though he readily admits that furniture has always been a negotiated business, his primary frustration is dealing with retail customers who begin bargaining for an item without knowing anything about it. He loves to ask customers what they are looking at before agreeing to a price below what is marked.
His favorite story (not corroborated) entails a retail buyer who succeeded in negotiating the price on a quality side table down to $1,000. Upon finding a blemish in the finish she demanded a further discount. He asked a furniture repair expert who happened to be in the shop his price to fix it. The buyer refused to pay the $1,000 plus the $100 repair fee.
The repairman then purchased the table for the $1,000, corrected the defect and sold it later to a high level shop. He reports this same buyer unknowingly purchased the table for $6,000.
Myers says consumer perception of furniture value is influenced by reputation, presentation and expectation.
When I told him that his presentation is terrible, he laughs, agrees and says he would have to reduce his inventory by 40 percent to offer proper presentation.
Over the years Myers has developed several specialties. For a while he wanted to lead the industry in high level bookcases and we book lovers can see what we have only dreamed of owning.
He is now better known locally for his inventory of British and Irish bars, which he sells throughout the country. A visit to see his current inventory is recommended.
Lesser known is his collection of English lacquered gilt secretaries with Asian motifs known as Chinoiserie.
These pieces were coveted by wealthy English people in the 18th and 19th centuries. He proudly showed me an article of one which sold at auction in London for over $200,000. His most expensive one is listed for $60,000. He claims to have the largest American inventory.
Myers is also developing a national reputation for bespoke furniture, a formal name for custom made. Buyers can give him their precise dimensions for a specific style, and his workshop near London can produce it.
When I asked whether the antique business has been in decline, he was affirmative, citing two reasons.
First, the recent housing crisis reduced the quantity of new housing being built and the demand for furniture in general.
Second, many young buyers seem to live disposable lives: purchases are short term to be replaced by the next model. Nonetheless, he has been able to keep his average gross profit margin around 25 percent.
Myers became agitated only once in my interview — when I said I was disappointed in his website. He explained that a “friend” had offered to up-date it and in so doing removed much of what he had on it.
Though proud of his low-tech operation, he admitted that he must pay more attention to the new ways people use to find products and services.
Finally, I inquired about a succession plan for the business.
He said no, as he believes his competitive advantage (the relationships he has in Europe) cannot be easily copied by a current competitor or a potential new owner.
Since his children are not interested in the business, he indicates the value of the firm is simply in his inventory. But Myer does not plan to leave soon – it’s too much fun.
Kenneth Zapp, is a professor emeritus at Metropolitan State University and a mentor for SCORE Savannah. He may be contacted Kenneth.Zap@metrostate.edu.