Tuesday, February 23, 2016

Auction Fee Structures

      Nine out of ten times when I am contacted by a family the first question I am always asked is "What do you charge?" This is an important question, but the simple answer is it depends.  I truly don't know until I see what is there to sell.    I often meet with the family of a recently deceased or parents that have been moved to an assisted living facility and have a house full of stuff they need to get cleared out.  They rightly want to get the most money for the items they have loved and treasured, but don't completely understand how auctions (or estate sales, tag sales) work.  

A good auction for me is around 30%, I do some higher and some lower, but on a typical $8,000 estate with a week of set up and a one day sale that's where I need to be.  From that fee that's how I cover my expenses and pay myself.  

Here's the math 
Gross $8,000 X Commission @ 30%  = $2400
-Expenses these are estimated and vary depending on needs and are included in my %

 -Helper for 1 week to set up $500
-Labor day of sale $350 
-Advertising $100 for online advertisement, but this can get very high very quickly.

My net for auction is $1450 give or take, that profit helps covers my labor and daily operating expenses.  Not a bad day, but I'm definitely not getting rich.    

Some other fees that may be charged that we typically do not.
Buyers premium 
This is a fee charged by (some) auctioneers to offset expenses this percent is charged to buyers by auction company.  We don't charge a buyers premium, with the thought being bidders bid conservatively when a buyers premium is in effect. 
Lot fee
This a fee usually $1 for each lot sold.  A typical auction for us runs 400-600 lots.
Set up fees or labor charges
These can get very costly figure $100 a person a day if you are paying labor the fee structure should reflect that. 

The fees below are fees we have asked sellers to pay, but is on a case by case basis.
Hall Rental
Moving and Storage
Clean out

This is not an all inclusive list, but may help you better understand the estate sale or auction costs.  If the company you meet with has a large fee or includes charges for other expenses, make sure you are comfortable that your getting what you pay for.  Walt

Walter Holt owner operator Have Gavel Will Travel (HGWTllc)
St Louis, Mo