FOOL'S EYE VIEW
Creating Wealth from Thin Air

By David Kuo (TMFDragon)
September 25, 2001

Carburton Street, London – How would you like to produce cash out of thin air? It might seem too good to be true. But did you know that most of us have money tied up in unwanted personal possessions that are just simply lying around our homes gathering dust?

Registered businesses, unlike individuals are required by law, for accounting purposes, to conduct a stock take at least once a year. They are also obliged to account for their assets, which will include all their furniture and fittings in addition to consumable that are used in the course of their business. But as individuals, we are only required to account for the movement of capital goods on our tax form. The incidental purchases that we make do not come under this remit.

Perhaps it is this lack of financial discipline that allows some of us to lapse into bad habits. We acquire goods, which always seemed like a good idea at the time, but become outmoded -- very quickly. These items are hidden away out of sight in cupboards and drawers, wardrobes and lofts and will probably never see the light of day, ever again.

The amount of cash that is tied up in these so-called "assets" can also be quite significant. But as long as they are unused, their value to us is zero. To others, however, these items could have some value. So the key to unlocking that value is to try and find the buyers for these goods.

The car boot sale has become a popular place where buyers and sellers can meet. There is something very Foolish about car boot sales. It is not only a good opportunity to de-clutter our houses of unwanted possessions but it also a place to practice our negotiation skills and unleash the selling and marketing talents that lie dormant within all of us. And best of all, we get to make a couple of quid out of doing it.

The secret of a successful car boot sale is marketing -- the business function that made Sir Stanley Kalms, Sir Charles Forte and Calvin Klein living legends. The marketing tools that are used in high street retailing are just as pertinent when selling from the car boot. But there are many marketing-mix tools of which the most popular is the five-factor classification called the Five Ps: product, price, position, promotion and place.

The first "P" is the product itself. Try to ensure that there is sufficient breadth of product range. Remember that your customers will be drawn from all walks of life ranging from children, eager to spend their pocket money, to other homeowners with a keen eye for a bargain. For this reason your range of products should include soft toys and games, china ware, videos and books, soft furnishings and furniture etc... In fact anything goes at a car boot sale – but just make sure they are clean and appealing.

The second "P" is price. Forget about what you paid for those items – they are a complete irrelevance now. What is important is what you expect to get for those items today. It is quite a good idea to take a trip down the high street to ascertain the current retail price for those goods at today's price. Your customers are only interested it bargains and often at a very generous discount to high street prices. A good rule of thumb is to pitch the price at an 80% discount to the current retail price.

The third "P" is position. Your target customers are bargain hunters. They may all be different in terms of their demographic attributes of age, sex, income groups, occupations, educational background and ethnic origins. But the one common denominator will attract their attention is the price on offer.

The fourth "P" is promotion. The organisers will be promoting the car boot sale. But as a participant your responsibility will be to ensure that your products are properly displayed with prices. Make sure that the items can be seen at eye level with toys placed lower down for the benefit of children.

And the last of the Five "P"s is the place. Every venue will have their good pitches and bad ones. And the best way to determine the better locations is to visit the venue in advance. Observe the customer traffic flow and ascertain the entry and exit points -- where footfalls tend to be higher. But remember that pitches at a car boot sale are allocated on a strictly first-come-first-serve basis so make sure you arrive early.

Where Next

Living Below Your Means discussion board.