Shortly after settling into our new condo, my partner and I were invited to participate in our complex’s community-wide garage sale. Having just downsized from a larger home and purged half of our belongings, we didn’t feel we would have much to contribute but viewed this as a great opportunity to meet our new neighbors. With a few weeks until the sale, we made a point of surveying each room, closet, and cabinet for any items we could possibly sell.
To our surprise, we uncovered about 30 items to include in the sale. Although all were in excellent condition, most did not fit our new lifestyle or were duplicates or more suited to the decor of our previous home.
Having helped many friends with their own garage sales, and being customers at many estate sales, we knew aggressive pricing was the key to moving merchandise. I’ve often heard many professionals quote the “drop a zero” guideline – if an item cost you $100 new, price it at $10 or less if you are serious about selling. Hence, items normally fetch (at most) only 10% of their original retail price.
With this guideline in mind, we grabbed our markers and tags and went to work. Silk ties – $3, wool scarves – $5, mahogany table – $25, Santa figurines – $7, candles – $1, holiday wreath – $5, …
On the morning of the sale, we were greeted by a dozen or so “early birds” as we raised our garage door. They quickly swarmed our relatively meager inventory, and marveled at the quality, condition, and price of our goods. Ah, the trifecta of a successful garage sale!
Items began flying off the driveway and into their new owners’ arms at a rapid rate, our sandwich bag of cash filling with one, five and ten dollar bills. We smiled as each person left happily with his or her new find. At the end of the day, we had just a few items left, which we promptly donated to a local charity.
“Wow, look at the money we lost!” I called out to my partner, displaying the sandwich bag bursting with the day’s reciepts: $87.
“What do you mean? That looks like a good haul for a few hours’ work!”
“Well, given our pricing strategy, the items we sold probably cost us roughly $870, which leaves us with a loss of $783.”
“Oh, so true. But we cleared things out and everyone appeared happy with their purchases. I feel good.”
Scanning the inventory in my head I quickly came to an interesting conclusion – we had lost money on every single item, except one. Given we follow a “buy quality and hold long term” approach, I was comfortable in selling these items so low as I know we had amortized their purchases over many years and received great value for our money.
“Well, we did make money on one item — the holiday wreath we sold for $5.” I conceded.
“Oh, yeah! Remember, we got that for free. It was left on the sidewalk of our previous neighborhood after the neighbors finished their garage sale.”