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June 15, 2011

So, You’re Thinking About Starting An Estate Sale Business…

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Hanging out a shingle with a start up Estate Sale Company

We recently had the opportunity to have an email-based conversation with MA resident who is considering starting their own Estate Sale Business.  The topic at hand was: “Please share with me how you became successful in the Estate Sale Business”. 

Pot Of Gold Estate Liquidations, LLC & Auctions has been in business for 16 years, and have learned a lot over the years, so it was fun and interesting to trip back down memory lane as I wrote my reply, which I share here: 

“Starting a new business is an exciting venture, and I am happy to help!  My first instinct is to ask you a series of questions: 

Do you have any practical experience in the area of organizing  / running
Estate Sales?   

Do you have an opportunity to apprentice under another company?  If so, try
to pick someone in another area, who you won’t be directly competing with in
the future – it’s awkward to the relationship when the time comes to break
out on your own. 

What logistical obstacles to you have in your area?  In our experience, in
rural areas the population density is too spread out to make Estate Sales
practical.  And conversely, in condensed urban areas the parking / hauling
is very problematic.   

What about Estate Sales makes this the type of business you are interested
in building, over other possibilities?  You will need a strong back,
excellent organizational skills, patient & empathetic people skills (you are
selling people’s memories & dealing with grieving families), salesmanship,
and knowledge of current values of any number of items.  You also will need
to understand that working within the inner sanctum of people’s homes
requires a special set of intangible qualities, such as being
non-judgmental, not gossiping / posting on Facebook about the occasionally
odd items or un-cleanliness of people’s homes.  Dignity and confidentiality
will help you get good referrals, because people will know you are
trustworthy. 

When we began our business we had a team of two (myself & my husband) for
all the set-up / pricing / advertising.  On the day(s) of the sale(s) we
would have a staff of 3-4 additional people who we were fortunate to have as
mostly volunteer labor.  Friends & family who would work for a free lunch or
for the chance to pre-shop the public.  I was lucky to have a very
knowledgeable and professional staff even though they were volunteering.
Sales would run from 7:am – 3:pm for 1-3 days – so even if we had been
paying labor costs it would have been less than you are estimating.   

Our commission rateis reasonable, but has grown over the decade + that we have
been in business.  Commission was not something we ever negotiated
on.  We have always offered an excellent service, included advertising expenses in that
rate with no hidden fees, completely emptied each house and vacuumed up
after ourselves – making the property realtor-ready when we were finished.   

Competition has grown significantly over time, with many people wanting to
‘do-it-yourself’, so we rarely even do Estate Sales these days.  We are
mostly geared toward encouraging people to bring their items to auction
where the public competes to drive the prices up, rather than negotiating
prices down as they would at an Estate Sale.  

We were very blessed to have had the good fortune that came our way early on, but we met those blessings with dedication and hard work.  As Thomas Jefferson so aptly said, ‘I’m a great believer in luck, and I find the harder I work the more I have of it'”. 

Our best wishes to anyone who decides to dive into this wonderful and exciting business!  I invite you to share your stories – tell us what went well, what didn’t turn out as planned, and a little bit about some memorable cilents!

 

20 Comments »

  1. Thanks for the candid info. Some good nuggets of advice. Best to you and your endeavors.

    Comment by Chris Norris — June 17, 2011 @ 5:23 am

  2. Thank you so much for this. I live in Charleston, have a lot of this type of business here, but I want to retire to the Smokey Mountains and thought this would be a good supplement to pension……….I have always enjoyed yard/estate sales and love antiques………

    Comment by Paula Orr — December 26, 2012 @ 10:45 am

  3. Do you need any special business liscense or specialized TRAIING to do this? We own an antique business in our town. Estate business would go hand in hand with what we do. I also do furniture restoration. Where can you direct me to find formalized training to do this or can you just hang out your shingle an do it?
    Thanks
    Mel
    melteaches@yahoo.com

    Comment by mellie — March 27, 2013 @ 6:09 am

  4. Hey Chris,

    Thank you for the question! One of the reasons we shifted away from doing Estate Sales, and became primarily an auction-based company is because potential Estate Sale customers began do-it-yourself-ing. So, some of the scarcity of new leads that you are experiencing is likely due to that. That being said, there will always be a need for professional Estate Sale services.

    For us, in order to capture new leads we believe it is a must to have a website that is professional-looking, attractive, and user friendly. We also are fanatical about answering every phone call as it comes in. Our experience has been that if a call rolls to voicemail, the customer will roll to our competitor(s). Finally, we had good luck partnering with other professionals, such as real estate agents. We traded leads and recommendations – we would recommend their service, and they would return the favor by recommending us.

    I hope this was helpful! Wishing you the best of everything!

    Comment by Cheryl Todd — April 1, 2013 @ 3:28 pm

  5. Mellie,

    Great questions! In Arizona, where we are based, all we need is a business license. Different states, and even counties or cities within states, may have different rules, so be sure to check the laws and requirements of your local area. The only prohibitive things we ran into over the years was signage restrictions in certain cities, and some HOAs that prohibited Estate Sales in their particular housing development. Our recommendation is that you be an informed and respectful presence, and always practice good neighbor policy by following the laws and policies of the areas where you work – professionalism at all times is paramount!

    We did not have any special training, but rather had a real-world, working knowledge of the antique and collectible market, and are skilled at research. We also partnered with other professionals who had a specific area of expertise. We purposefully did not get an Appraiser’s License, because it can create a conflict of interest. If you are the “expert” who is setting the price on item(s), then you have to sell the item at a reduced price (bargaining is a standard part of the Estate Sale business), it can be construed that you did not serve your client well, when in fact you sold the item for what it was worth on that given day. We often quote the tenet: “An item is only worth what someone else will pay you for it TODAY!”

    I hope this information is helpful! Best of everything to you!

    Comment by Cheryl Todd — April 1, 2013 @ 3:49 pm

  6. Where would I find a sample of legal contracts for the home owner to sign regarding estate sale business. I am just starting one a company and realize the home owner would need to sign a contract with me before hand?
    Thank you,
    Glenda

    Comment by Glenda — April 6, 2013 @ 3:03 pm

  7. Hi, I am considering an estate sales business on a small scale. I am a young age 57 retiree with time on my hands that I would like to turn in to a little supplemental income. Currently I will do an after the estate sale clean out or yard sale haul away. Did an estate sale clean out last Saturday in east Mesa. Believe it or not I went on Craigslist and checked out the yard sales. I contacted one listing an Estate sale. I wrote them offering my services to haul off what they will leave behind. For hauling the remainder of the estate I agreed to waive a fee and do the job for the merchandise that fully loaded my one ton truck plus a 20 foot flat bed trailer stacked at least 4 feet high. They left me nice glassware and small appliances plus some nice older furniture and tons of misc. The day we arrived at 7am my son and met with the ladies who met us at the home. They told us to take what we wanted and to leave the rest. It took us three and a half hours to do the entire clean out. We did leave behind some not usable items mostly large furniture that was broken or worn out but my son and I moved all of the stuff in to the garage and neatly arranged it near the garage door so a charity could pick it all up easily. The only things we left in the house were things the ladies told us to leave otherwise the home was empty and ready for a clean up before the home was to be sold. The ladies received a free of charge service and we ended up with a lot of goodies that my wife and family had a blast selling at a yard sale. The ladies were very satisfied with the job we did. What was not sold at a yard sale was donated to Goodwill. How do I apply for a Mesa/state business permit and do I need a state/city tax ID number?. Thanks, Bob

    Comment by Bob Lamb — July 30, 2013 @ 8:05 pm

  8. Bob,

    It sounds like you are off to a great start! “Service” is always the best product to sell, and it appears that you have that part of your business well in hand! I am not familiar enough with Mesa to offer any wisdom in dealing with their city ordinances, but I wish you the very best in your venture! Please let us know if you ever come across items that you would like to sell at auction!

    ~Cheryl

    Comment by Cheryl Todd — December 2, 2013 @ 11:27 am

  9. Glenda,

    Thank you for your question! We hired a local attorney to help us write our agreement. We endeavored to keep it very simple and basic, with as little “fancy wording” as possible.

    Trust is everything in the selling of people’s lifelong collections and possessions, and that is gained through the actions of integrity and gained reputation of the Estate Sale company. The contract is mostly a formality and a to-do list that both parties agree upon.

    I hope this was helpful. Wishing you all the best in your endeavor.
    ~Cheryl

    Comment by Cheryl Todd — December 2, 2013 @ 11:34 am

  10. What was your non-negotiable percentage between you and the owner?

    Comment by Lynn — February 14, 2014 @ 5:26 pm

  11. Thank you for offering valuable advice. What type of insurance is recommended foe estate sale business owners?

    Comment by Bill — March 26, 2014 @ 9:30 am

  12. Thank you for your question! We carry the same insurance that any business would have, and I would recommend you find out if your city or state has any specific requirements for you to carry. Best of luck to you!
    ~Cheryl

    Comment by Cheryl Todd — June 4, 2014 @ 12:54 pm

  13. While performing Estate Sales in individual homes, it allowed us to conduct business without the overhead of a brick and mortar store, and at that time 25% was a reasonable rate. Now that we have an auction house with a considerable amount of overhead our commission is 35%, and sometimes it is a struggle not to want to raise that in order to cover all of the expenses that come with conducting business. We always try to cut as much internal costs as possible before we look outward to raise our rates. And so far, in the 8 years we have been in the auction business we have only raised our rates one time. Of that we are very proud, since we have increased our staff considerably over time, and our advertising methods have gotten rather pricey. But, we have tried to become extremely efficient and streamline, saving time which saves money which keeps our lights on and our consignors happy! I hope this was helpful! ~Cheryl

    Comment by Cheryl Todd — June 4, 2014 @ 1:01 pm

  14. Hello Cheryl, I Live in Dallas, Tx , My wife and I have been doing alot of research about starting an estate sale services. We have put all of the pieces of the puzzle but one and that’s how to find Clients in need of your service. I know some people suggest giving cards to realtors but I know there has to be more sources than that. I had actually conducted test phone calls to 43 realtors in my local area and didn’t receive a warm fuzzy feelings from any. So we would appreciate if you could help us! Thanks in advance.

    Comment by Steve — August 28, 2014 @ 12:34 pm

  15. My only suggestion is to try to connect with people who work with the retirement community, including Realtors, and express how much a service you are providing. Realtors can’t sell a house that is full of stuff, people who are moving into a Care Facility can’t store all of their possessions, families often don’t want or need the items that their mom & dad kept for decades. What we do – turning “stuff” into cash – is a much needed service, we have built our brand on helping those who need help. You may have people in your church or friends of friends who are struggling with the decisions that need to be made in order to downsize, relocate, or obtain the care they need in a local facility. Ask around and let people know you are starting up a service-based company. It’s a slight difference…but makes all the difference from the message “please hire me”. I hope that is helpful for you…best of luck in everything you do!

    Comment by Cheryl Todd — October 13, 2014 @ 7:57 pm

  16. I have been speaking with a gentlemen that is offering training on how to start an estate sale company, he is offering instructions, website, contracts, signs, and how to put a value on merchandise. I was wondering if this is necessary for me to pay someone for this help or could I possibly learn this on my own. I am pretty smart, have taught sales on a corporate level, and have a background in marketing. your input would be appreciated.

    Comment by SANDRA SCOTT — June 4, 2015 @ 4:51 pm

  17. We built our company by experiencing how other companies ran their Estate Sales – both as a shopper and as in “intern” helping another company on a volunteer basis. We picked the elements we liked best and tried to improve on those things. We shied away from the things that others did that we felt were impediments to the buyer. I personally don’t think we could have learned more by being “trained”. And, always keep in mind that there is more money to be made in DOING of Estate Sales than in teaching the trade…so, maybe he isn’t as good as all that. Just something to consider. Best of luck to you!

    Comment by Cheryl Todd — July 8, 2015 @ 2:12 pm

  18. Eye Opening information on this site. I was just speaking about this subject. Thanks

    Comment by Selling Home Flower Mound — February 22, 2016 @ 11:32 am

  19. Thank you for this info it was very helpful.

    Comment by Eleanor Tak — February 22, 2018 @ 3:54 pm

  20. I started my Estate Sales business last year…this is my first year doing taxes for my business. I have been trying to find a classification for my tax return but do not see anything. Can you advise what you used.

    Comment by Carolyn Morse — February 28, 2018 @ 12:20 pm

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