An Estate Seller’s Year in Review: Liquidation Earnings
As a coach, there are three questions I’m asked often about liquidation earnings and income:
- How much money can you make as an estate seller?
- What kind of revenue can you expect when you open an estate sale company?
- Can an estate liquidation business replace my full time job?
I always answer your questions and share the nitty gritty with you. So here is my real 2015 year in review. Yes, a case study of the real actual numbers from my estate sale business.
25 Estates and $218,228 in Gross Sale Revenues
In 2015, my estate sale company (Expert Estates LLC) handled 25 estates, how could I coach if I'm not out there holding sales too? I would quickly become out of touch with all the current trends and developments because the industry changes quickly.
My sale tally for the year is $218,228.69, with an average sale of $8,729.
This tally doesn’t include sales from my store or online sales. Typically an estate liquidator doesn’t have a store and may or may not also do sales on eBay and Etsy or other online sale venues, so I don't want to throw off the numbers.
Since our third baby girl was born in July this year, we had several weeks at a time occupied with family visits and without holding any sales. So this was actually a slower year for me than 2014. But it is an example of the kind of year you can have within one or two years of opening your estate sale business. The numbers are pretty close to my numbers for my second year in business. I was averaging about 2 sales each month. As you can see, there are months I did one sale or no sales, some I did three or four in a month. There were two estates that I did for two weekends each in 2015. Of course, even when I was traveling or when we had visitors, I still had to stay on top of incoming leads and handle consults. This is not a 4 hour work week, lifestyle industry. I do have supporting staff but your estate sale business won’t run itself or provide passive income.
What Kinds of Estates and How Many Sale Days?
My heart is happy when I help as many people as possible, I take in large estates and small ones as well. Even people with a small estate can seek and need our help. But I am a business owner not a charity, I will take a small estate sale job as long as:
- The client seems easy to work with
- There is a benefit to helping them (I won’t just break even or lose money)
- The seller agrees to a one day sale with a $1500 or $2000 minimum commission (depending on the labor that will be required)
- It is a good neighborhood where I can pick up new customers, grow my list and generate leads
- I have room in my calendar for the sale.
I do just a single day or a two day sale for smaller estates and I take those jobs only if they are going to be easy to set up involving little work. Small sales that require lots of organizing and cleaning are not worth the time invested. When there is too much work for a sale to be profitable, I will offer clean out and donation assistance to the client instead of an estate sale.
I typically do a three day sale but at times I hold a four day or a sale over two weekends. Every sale is unique and I customize the days and hours depending on what I think we need.
Best Sale Days
Our year round tally on our main sale days came out as follows:
- Friday $63,683.62
- Saturday $67,733.63
- Sunday $52,809.06
Typically when we had a three day Friday-Sunday sale, Saturday was our lowest sale day, but Saturday appears higher here due to holding an occasional Friday-Saturday or Saturday only sale. Once in a blue moon Saturday will beat out both Friday and Sunday - every sale is different.
My sales usually run 9am-3pm. Over all the years we have been open, generally (unless there is a weather issue keeping people home) no matter what time we open, the sales peak one hour after opening, they dip down at around 1pm and then surge up a bit again an hour before closing.
Commissions - The Real Scoop
We work on commission, the more we sell, the more we bring home in liquidation earnings.
If you have on average a 40% commission rate, this year’s tally brings $87,291 in commissions.
At a 35% commission rate, it brings in $76,379.
My commission ranges between 35-50% once in a while I charge more if there is a lot of work or for other unusual circumstances.
For example, I charged a higher commission for an estate with a lot of good inventory but that had been owned by a smoker. We did get the smoke smell out, but I disclosed the smoking in my ads and charged less for the inventory to ensure sales, especially on the upholstered items. The commission should be higher to make up for the lower sale prices and all of the extra work to clean smoke odor and stains. And in 2014, I charged a 60% commission for a person who needed a last minute sale. Not only was it last minute, but also, I already had two sales booked for the only weekend the client could have the sale due to her closing date. Taking the job meant a very long workweek and required that I hire and train more staff. I explained what my commission would be normally for the sale and what I needed under the circumstance. They called me back the next day and agreed to the higher rate. Though that was a long week for me, I was earning more too.
The Cost of Doing Business
Our commission is not the end of the story, we have business expenses to factor in. Your liquidation earnings need to cover all of these expenses and leave you money as your take home pay. Some of these costs can be offset or billed back to your client - some sellers split or charge clients for expenses like:
- credit card processing,
Some sellers absorb them preferring billing with just commission. But a commission can’t be one size fits all unless every sale you take requires the same work and yields about the same in revenue.
Here are the things to track and consider:
- Credit Card Processing Fees
- Cash Deposit (you’ll go over the allowable amount for cash deposits, shop for the bank that lets you deposit the most cash each month for free)
- Other Banking Expenses
- Business License
- Promotional Materials
- Web site
- Legal Fees
In addition to my commissions, I charge extra for add on services. This provides additional income and helps cover some of these expenses on many sales. I add on options and get entire jobs for liquidation related services such as:
- donation oversight,
- full home cleaning,
- trash hauling
- written appraisal reports
- liquidation consulting.
I am really looking forward to another great year liquidating estates in 2016. For me, one of the things I love about being an estate seller is that I can adjust my schedule and work as often as I want. I can stay busy for a month or a year and then dial back the schedule if I want or need a break, a vacation, or just more quality family time.
If you aren’t reaching your goals or if your liquidation business is not supporting the lifestyle you want yet, I would love to book a free discovery call with you to see if I can help you achieve success. You can get there on your own, but I'll share my tips, the exact steps to take and solutions that work when we work together. Get where you want to be now instead of learning by trial and error. What will things be like for you if you can achieve your goals now instead of years from now?