Planning Your Business 8

Can I make money selling at flea markets?

If you go about it in the right way you can. John Hunter, who runs Tools-N-Stuff, a company that sells tools and other items for automobiles, makes his entire income by selling his wares at flea markets. One of the tricks of the trade, he says, is knowing your products and learning where and how to buy your goods. Your prices should be a little lower than those in retail stores—10 percent or lower works, Hunter says. But the real secret, he says, is selling items that are hard to find at any price in retail stores.

Another key to running a profitable flea market business is to have a wide variety of items in low to medium price ranges so you have something available for everyone. Hunter usually sets out about 500 different items, many of which are priced at $5 or less. These will help attract traffic to the booth. The small sales add up and "keep you from just sitting there all day watching people walk by." Items you choose should not be prone to fading in the sun and should be attractively displayed. You also need to be equipped to quickly cover everything with plastic and secure the plastic with clips in case of rain. At flea markets that have open-air booths as well as indoor booths, the outdoor vendors often do better than the indoor vendors. In fact, Hunter says, some who have indoor booths rent space outdoors as well.

To locate merchandise to sell, look in Thomas's Register of Manufacturers for names of manufacturers, go to trade shows, and look for items to sell in publications such as Cover Magazine (24 Grassy Plain Street, Bethel, CT 06801-1725, http://www.sumcomm.com). Sumner Communications, Inc. 24 Stony Hill Rd. Bethel, CT 06801 (203)748-2050, (800)999-8281, Fax: (203)748-5932 http://www.wholesalecentral.com/

The biggest mistake people make in working flea markets, Hunter says, is not being businesslike. You have to get necessary licenses and comply with the tax laws, and you also have to plan. "You can't do things halfheartedly. You have to run it like a business." If you are businesslike, he says, you should be able to gross at least $400 to $500 every day you sell.

What about online auctions? Are they just for hobbyists?

Many people who sell on the auction sites are hobbyists, but there lots of small businesses that use online auctions either as a way to clear out excess inventory, or as their primary way of selling. . To make a profit with auctions you need to specialize in a particular type of merchandise, know your prices, and the market. To make money on an ongoing basis, you'd also need to have a steady supply of items to sell. One big advantage of selling this way is that you can start off in your spare time without any initial cash outlay to rent flea market, craft show, or retail space.

One caveat: if there are a lot of people selling the same or very similar merchandise on eBay or other auction sites, you will have trouble making a profit. People who have bought mail order business opportunities (ie: plans, catalogs, etc. to start a mail order business), often find that there are so many other people trying to sell the same merchandise on eBay, that its unprofitable to sell that way.

What about crafts? Is there any money selling them?

There are a variety of ways you can make money in crafts, but for many businesses that sell handicrafts, the profit is low compared to the number of hours it takes to create the craft items. But as in any field, those who treat their activity as a business and keep a close eye on the market for their goods, their raw material, and marketing costs and the labor costs (including their own time), can make crafting a profitable business.

Terrie and Richard Floyd, owners of Laughing Moon (http://www.toymakerscollection.com/) began designing and crafting collector-quality toys and decorative accessories in 1967. They produced expensive, one-of-a-kind pieces until 1994, and also licensed some of Terrie's designs. "The licensing helped us get more of my art out to the general public," says Terrie, "and also let us see that my artwork was very popular at affordable prices." As a result, they decided to "mass produce" Terrie's jumping jack creations in special limited editions. Their customers have included the Metropolitan Museum of Art, Art Institute of Chicago, Gumps, Flax Art & Design, and hundreds of small, quality art galleries.

To increase profitability, treat crafting as a business and keep a close eye on costs and time. Selling other people's crafts on consignment, selling craft supplies, and selling your own original patterns are other ways to add to craft income.

If you develop unique products or designs as Terrie does, you may want to consider licensing them. Look in department stores and discount stores and attend wholesale shows to see if there might be mass-market applications for your work, and contact any appropriate manufacturers. If you can interest manufacturers in your work, be sure to have a contract drawn up that spells out the specific rights you are granting to the manufacturer. Have an intellectual property attorney go over the contract carefully so you know exactly what you'd be giving away (for instance, can the manufacturer use your design on one type of product, or on any product they manufacture?) and what you'd be getting under the contract terms.

Whether or not you plan to license your designs be sure to register a copyright on original designs. That way if someone copies your work, you could sue and collect damages and attorney fees (if you win).

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