Selling Medical Collections

Liquidating an antique medical collection

Advice for anyone who collects Medical Antiques

You’ve spent years and a lot of after-tax income assembling your medical collection.  Now, at a certain age or due to unforeseen circumstances (e.g., retirement, divorce, tax issues, death, health problems, or a concern for your collection), you have decided it is time to let go of your prized possessions.  What do you do?  How do you go about it?  Who do you contact?  Who can you trust?

There are multiple choices on passing along or selling your collection. Should you use an auction house or eBay?  Donate to a museum? Sell directly to another collector? Sell to a trusted dealer? Or, the two worst case scenarios: You get a divorce and are forced by her attorney to quickly sell.  Or, you die and your family sells everything at a garage sale!  Think I'm kidding?  Think again.  I have witnessed all of the aforementioned.

In the past, I have seen multiple large collections go to auction or a forced sale and fail miserably.  In all cases the realized prices for the collections were telling because they were so low.  Why you ask?  Here are several reasons:

1. The most common reason for low realized prices is because the seller bought medical antiques in isolation, without unbiased expert advice, and paid way too much or bought misrepresented items (a.k.a. fakes).
 
2. The buyer did not have particularly good taste or was a ‘gatherer’ rather than a true knowledgeable ‘collector’. In this case, there is not much anyone can do to help.

3. The buyer was an inexperienced student of the topic he collected and was taken advantage of by unscrupulous dealers or auction houses.  Just remember: if you bought cheap then it is likely you got cheap.

4. The collection was poorly presented or inadequately described by an auction house or internet sale, resulting in low bids which were not allowed to be posted with reserves.

There, I've said it.  Not everyone is a ‘knowledgeable’ collector/seller and they generally fail terribly when it comes time to sell.

So, what should you do?  First and foremost… plan ahead.  Assume the worst case scenario and do your homework because I guarantee you, no one else will do it for you, especially if you are disabled or dead:
 
1. Know your topic inside and out.  Read, talk, and know everything there is to know about the topic you collect.  Have a friend, dealer, or paid advisor who will serve as your brains.  (If you have not done this all along, you are a prime candidate for this article and advice.)

2. Keep meticulous records of everything you buy.  If you have not done this, get busy and reconstruct the facts.  If you drop dead, who do you know who is going to know what you paid or what anything is worth?

3. Research the provenance or history of each and every piece. (You are in luck, Google and Google Books makes this much easier to accomplish today.)

4. Track the prices, dates, and from whom you purchased each piece on a spread sheet or ledger book (If you have a large valuable collection, do it on an Excel or similar spread sheet and do it right! Keep multiple backups too. Watch eBay sales and track the numbers.) 

5. Tag each item with a number or full name to relate it to your spreadsheet entries.  Use removable stickers or string tags on the item.

6. Keep up with sales of similar items at auctions or on-line and note those sales with dates on your spreadsheet or ledger.  Watch eBay and auction houses that specialize in scientific and medical antiques.  (Or, you can buy auction prices-realized research on-line.)

7. Above all, it is your responsibility (and in your best interest) to weed out the junk in your collection (sell it on eBay) before you try to sell it to another collector or dealer.  You cannot expect to come to the table with a lot of odds and ends material and a ‘take-it-all-or-leave-it’ attitude.  This is not a flea-market game.  If you want to deal with just any buyers, dump it all on eBay. 

It’s just good business manners to prepare the collection for sale and you have to do it before you make connections with major collectors.  Never forget what you have been told since you were a child: you never get a second chance to make a 'good' first impression.

High dollar buyers expect to be treated as professionals and not flea-market dealers.  If you miss or avoid this point, you are going to severely lose your shorts in any auction.  Clean out the closet, get rid of the obvious junk and prepare your collection for 'curb appeal' just like you would to sell a home.  If you don't know what I"m talking about here ask your collector friends.  Friends don't let their friends collect junk, or they shouldn't.

8. If your collection contains rare medical books, papers, or art, you will need specialized advice on listing and valuation.  Do not expect anyone other than a medical dealer or knowledgeable collector to understand this arcane area of medical collecting.  No dealer or auction house is going to be or have a specialist for every medical item.  Even the largest auction houses are woefully poor at evaluating medical antiques, and especially at placing accurate values.  (The reason so many people don't know 'real' prices or values is because serious collectors and dealers keep quiet about what they pay for really rare or prized items.)

9. As more information becomes available, update your spreadsheet descriptions and the reasons a given item is unique or has unusual value. File and preserve documentation with links and instructions about the item or items you are documenting.  This takes serious time and effort.  Again, no one but you can or will do it for your collection.  Yes, I could help, but this is the hard part and not something anyone with a day job is going stop and do for you for free.  Yes, you can pay a knowledgeable dealer to do this part, but do you really want to write-off that much of the profit in your collection?

10. Photograph (digitals only!) every single thing in your collection using a planned and consistent technique and make certain the photos are clear.  Do not just take random photos, pretend you are going to publish a book and do a professional job or hire someone to take your photos accordingly.  Photos will be invaluable for a sale or evaluation in the future, especially if you are in a burial urn.  This is one of the most essential items on this list.  It must be done digitally, not with film prints! 

Now let’s think about the various options you have to sell your collection since this is what you really want to know:

1. Dealers: The bottom-line with dealers is they have to make a profit and have absolutely no motivation to pay you top dollar. When you buy you are their best friend.  When it comes time to sell…well, you already know the answer to that one don’t you?  Most dealers do not have the financial ability to make large purchases and will try to ‘cherry pick’ your collection.  Unless you are unusually up-to-date on values, odds are you are not going to know how much your collection is worth and you will sell too low. 

Dealers have connections and buyers you will never know about, but again they have to make a profit and it’s usually in the 50% or better level.  Another problem with dealers is they want to buy a few high-dollar pieces, sell those and then come back over and over to ‘pick’ your collection clean of all the ‘good stuff’.  What it amounts to is you financing the sale each time the dealer returns.

2. Auction houses: This can be the absolutely worst method of liquidation possible because of poor listings, lack of knowledge by the auction house employees about medical items, grouping of smaller items under one bid for their convenience, low attendance at the auction, poor timing, low-ball starting prices.  And worst, they charge you a high price and then turn your sale results over to the IRS.  Yes, individual, well-known medical objects, or surgical sets can do well at auction, but large numbers of obscure medical items bring next to nothing at auction.

3. eBay: If you have sold on eBay or have a friend who will do it for you, this is an interesting way to sell everything in your closet, especially the smaller or less valuable items,  but don’t think it’s easy for rare or high-dollar esoteric medical items.  It is not.  And then there are the PayPal and listing cost issues.

Consult anyone who deals on-line via eBay and they will clue you in on the problems, costs, and dangers of being in the on-line auction business…that is unless they are asking to sell your collection for you at a commission!  EBay stores located in your community might work for small low value items, but forget the big stuff or expensive items you need to get sold for top dollar.  It's not likely to work.  They absolutely do not have the medical or antique expertise to pull it off.

4. Museum Donation: Yes, you can go this route and achieve the satisfaction of having your name on a display (which, by the way, is not guaranteed by the museum) or getting a write-off for IRS purposes.  In case you didn’t know, most museums do not carefully store your gifts and may sell them if they need to raise cash to make another purchase.  Smaller, specialized museums frequently go out of business and sell everything in the museum.  They always want for you to ‘donate’, not for them to ‘buy’ your collection.  All you get is a letter to document you made the donation.  If you have the right tax situation and capital gains income this option can work.  If you don’t, you end up with a nice letter you cannot use to pay your taxes, CPA, attorney, or for when you need that angioplasty.

The Art and Collectibles Capital Gains Tax Treatment Parity Act (S. 374) sponsored by Senator Pete Domenici (R-NM) and Charles Schumer (D-NY) would "provide the same capital gains treatment for art and collectibles as for other investment property." Currently the capital gains tax rate for art and collectibles is 28%, compared to 15% for other types of investments.  (As of Dec. 2, 2008, and all bets are off with the Obama crew in charge.)

 5. Selling to another collector: This can be one of the quickest and most satisfying methods to pass on your collection. You most likely will know the buyer, you can dictate the price, and odds are it’s going to be a private sale with you and your CPA controlling the terms and taxes.  The best part: it is quick money all at once or made in structured payments without commissions going to auction houses and dealers.  Individual collector-to-collector sales are about trust and preservation, not a middleman taking a cut of the proceeds.

Some of us have friends and associates who are collectors in multiple areas and will understand your situation.  The objective is to find that 'someone' to assist doctors or individuals who may not have the advantage and knowledge we medical collectors share among ourselves.

We all know:“it’s good to have a friend in the business.”

Dr. Michael Echols is a retired orthodontist, who resides in Ft. Myers, Florida, and is a long-term medical collector.  He has written and published many articles on collecting medical and Civil War surgical antiques, all of which is available for 'free' on his extensive web site.  You can also contact Dr. Echols via the web site: American Civil War Surgical Antiques, which you can find via a Google search or check on My eBay.