Want to Start an Estate Sale Business? Here’s What You Need to Know
If you’ve visited more than a few estate sales in your neighborhood or town, you’ll notice that you start to recognize people -- and not just the people who get up early on the weekends and drive from sale to sale to get the best deals on antiques, collectibles, or even new items like televisions.
I’m talking about the estate liquidators: the people who painstakingly research and tag each item that’s up for sale. When you see the same estate sale company handling several sales near you, it’s a sign that they have an excellent reputation.
Estate sales are an amped-up version of a yard sale. Instead of tagging prices willy nilly the morning of a sale in your driveway or front yard, an estate sale takes days (or weeks) of prep work by a professional team. Estate sales are often conducted to clear out the estate of someone who has recently died, but they’re also used by people of all ages who are downsizing to a smaller house or liquidating a personal collection.
Building a reputation as a great estate sale manager isn’t easy, in part because the estate sale industry -- which has about 14,000 liquidators working across the U.S. -- is sort of the wild west. You don’t need special training or certifications to become an estate salesperson. That’s what makes it a good, low-investment business to start. But it also means you’ll have to work extra hard to earn the trust of your potential clients.
If you’ve walked around local estate sales, turning over items and saying, “I could do this,” then these tips are for you. Here’s what you’ll need to know before you start an estate sale business.
Build Experience With Other Estate Sale Managers
San Francisco-based liquidator Martin Codina says that estate liquidators aren’t likely to share their trade secrets with a newbie. Your best bet: work for a seasoned liquidator.
“I mean, imagine an auctioneer who had never worked in an auction house,” Codina says. “How effective would they be?” Even six months working the register for a liquidation company can help you glean some guidelines from the pros.
A lifetime of learning can also benefit your new business. Michael Gunning introduced his wife, Kimberly, to estate sales when they were dating, and perusing, researching and buying at local sales quickly became a hobby for the young couple. When their eBay store was bursting at the seams, they decided to start doing in-home tag sales for friends.
“We did 14 sales our first year in business, [and] doubled that in the second year,” Kimberly Gunning said. “Last year, we did 64 sales!”
Know When to Call an Expert
If you’re not extremely knowledgeable in a certain area of antiques or collectibles, call in help. Having an expert check up on your preliminary research can make or break the success of a sale.
“When I started in the estate liquidation business,” Codina says, “I would hire a local personal property appraiser, to make sure that I was not making any costly mistakes.”
Elizabeth O’Brien of Marketwatch echoes that strategy. You can’t expect yourself to have expertise in every area of items you might be selling, and O’Brien says, “That’s fine, as long as [liquidators] know to call in reinforcements when they’re in over their heads. When liquidators don’t know the value of an item, they should consult a trained professional, rather than, say, doing some cursory research on eBay.”
Those trained experts will be able to explain the value cycles of collectibles that families may have been amassing and cherishing for years -- even if they can’t always share good news.
“Television programs like ‘Antiques Roadshow’ have trained people to think that many basements and attics contain valuable treasures,” O’Brien notes. “In reality, they don’t.”
Set Clear Business Standards
The estate sale business is largely unregulated, leaving it up to the business owner to set and maintain ethics -- and make those rules clear to both their employees and clients.
O’Brien says that conflicts of interest arise if a liquidator buys items from an estate they’re managing, prices items too high to deter potential buyers, or pays those who worked at the sale with items from the estate.
Decide what your standards are early in the development of your business to avoid any confusion later.
You’ll need to be bonded and insured before you get your first client. Liability insurance coverage is essential for the unlikely (and unwanted) event that someone is injured at your sale. Even though the sale isn’t taking place in your own home, you’ll want your business to be covered in the event of an accident. You’ll also want to check with the homeowner to make sure their insurance policy is up to date.
Bonding is a guarantee that if there’s a financial loss during an event that you manage, your business will be able to cover the loss. Talk to an insurance agent (or two or three, to compare rates and services) to find out the right coverage amounts for your business.
Gunning recommends working with an accountant and attorney to ensure that your business is structured properly, and to make sure that your contracts and agreements protect your business. Beyond liability insurance, she recommends membership in the Antiques and Collectibles National Association (ACNA), which offers discounts, insurance plans and use of its logo on your promotional materials.
Start with a Small Estate
“Be realistic,” Codina recommends. “Start with small estates and work your way up.” As your reputation builds, you’ll find opportunities to manage larger sales.
Estate sellers usually earn a percentage of the total sales from the estate, about 30 to 40%. It’ll be up to you to advertise a sale in local newspapers, estate sale directories, and blogs, so that as the sale does better, you earn more -- Gunning recommends EstateSales.org, EstateSales.net and Invaluable.com. You’ll have to make the investment in an appraiser’s time for items of particular interest, but knowing the correct pricing before a sale starts will likely help the item sell quicker.
“We have gotten more efficient over the years,” Gunning reflected. “In the beginning it took weeks to prepare for the smallest of sales.” Now, the average sale (homes between 3,000 and 5,000 square feet) takes two full days to set up, and larger estates (homes greater than 5,000 square feet) take about four days.
“We used to do it all ourselves,” she says. “Now we have a seasoned staff.”
Get Ready to Play Counselor
“We have two important audiences,” Gunning says, “The client we are hosting the sale for and the clients who come to buy the items. Both deserve our fullest and utmost attention, professional attitude and personalities.”
Gunning recalled attending many estate sales as a buyer where estate sellers acted like they were “doing us a favor by letting us in the door to buy things.” She and Michael made a promise when they started their business that they would treat all of their clients with respect, regardless of what side of the cash register they were on.
It also takes tact and compassion to be a successful estate seller. “Working within the inner sanctum of people’s homes requires a special set of intangible qualities, such as being nonjudgmental, not gossiping [or] posting on Facebook about the occasionally odd items or uncleanliness of people’s homes,” warns Cheryl Todd, cofounder of Phoenix-based Pot of Gold Estate Liquidations. “Dignity and confidentiality will help you get good referrals, because people will know you are trustworthy.”
“We’re working with people who are emotional and grieving,” Julie Hall, founder and director of the American Society of Estate Liquidators, told the Pittsburgh Post-Gazette. Having compassion for your client while still making progress in clearing out an estate is a delicate balance that will take practice.
“Become a great listener,” Codina recommends. “Every estate is a bit different, and each client has their own unique way of communicating their needs.”
And remember: estate sales usually start at or before 8 a.m. You’ll need to be an early bird to love this business!
Your Turn: Have you ever worked at an estate sale? Would you consider running a business in this industry?