(Guest post by Robert Farrington – as part of our Side Hustle Series)
I am a full time manager who is married and expecting his first child this year. I’ve been building up my side hustles for years, and eventually plan to make the leap to self-employment. I’ve been side hustling since I was 16, doing all kinds of odd jobs for family and friends. Even before I graduated college, I focused on developing a side income by selling stuff on eBay.
It started with me selling my own junk on eBay. When I went to college and moved into my first “real place”, my parents brought over all my kid stuff and said, “here you go”. Well, I didn’t want any of this stuff, but I didn’t want to give it away. So, I took to eBay.
After about a year I’d exhausted all of my own junk to sell, so I started selling other people’s stuff. It started with friends and family, and soon it moved to buying items at estate sales and selling them on eBay. This is when my side hustle income really started increasing, and I was enjoying being able to do this in my spare time.
The Idea for Estate Sales
The more I bought from estate sales, however, the more I started feeling bad… I felt bad because I felt like I was taking advantage of a situation. I would regularly buy items at estate sales for $1, and then turn around and sell them for $100.
But that gave me an idea – the idea to be different in the estate sale space. What if I could create an estate sale company that not only helped the owner/family maximize their profits, but I got to get “first dibs” on the good stuff and a cut of the profits? I did a bit of homework of local estate sale companies and realized that nobody was really offering this.
Founding San Diego Estate Sales
So, with that goal in mind, I founded San Diego Estate Sales and built a website to be legit. This was really my first foray into building websites, and I have to admit, the website sucked. I built it using a template that had my basic info – I didn’t know anything about SEO, and I didn’t really know what I was doing. I did design my own header though (admire the basics pictured at the top!)
Without even knowing it, there were only about 5 full time estate sale companies in San Diego, and only one other company had the name “San Diego” in their name. So my site ended up ranking very high in search, and I quickly started getting leads for customers.
Running the Estate Sale Business
As the leads started coming in, I had to actually figure out how I was going to do this. So, I started with my first client – and I’ll always remember her because she was selling her mother’s pottery and other miscellaneous items.
I went to her house on a Saturday for a consultation. She had taken home a lot items, but left used furniture, a few cabinets full of knick-knacks, most of the kitchen items, and her car.
As I was digging around, I immediately recognized something from my eBay days – Roseville Pottery (pictured on the right). The lady didn’t even know what it was, but I informed her that a lot of these items would fetch a nice amount if we sold them outside of an estate sale. She took my word for it, and I told her I would be in touch soon.
After figuring out some estimates and the amount of stuff (plus my time), I suggested that we sell the pottery online, and then we host a 2-day estate sale on the following Saturday and Sunday for the other items. I told her we could advertise the car, and if it didn’t sell, I could help her sell it or she could keep it.
She agreed to it, and we were on for our first estate sale.
The Estate Sale Business Model
The basic business model of estate sales is commission based on what is sold. My commission structure was 20% of online sales after fees (so the seller would typically net 60% or so). For physical estate sales, I charged 50% commission, and that included all of my fees.
I also offered a variety of add-on services, like cleanup after the sale. Basically, anything that didn’t sell, we would donate or toss.
Finally depending on the items, other venues would be a better way to sell them. My business model was completely based on getting the highest price – it benefited the seller and me. As such, I’ve also done consignment (especially for artwork) and auctions (for coins). Think Heritage and Teletrade (coin collectors will know what this means).
My First Estate Sale
So, for my first estate sale, it was just my wife (at that time she was just my girlfriend), her sister, and me. It was a very small house, and not much to sell, but it was a great starting point.
I learned the key to a great estate sale was advertising – online, Craigslist, and the local paper. While advertising in the newspaper is expensive (upwards of $100), it is totally worth every penny. Also, you need to litter the neighborhood with signs. For our estate sales, we typically had 10+ signs at all major intersections and routes towards the house.
Our setup was simple – table by the garage with my wife, who would take diligent notes on what sold and for how much. Her sister would be by the other door, and I would be in the house to answer questions and haggle.
My wife would keep diligent records in Excel on her laptop, which we would turn into an invoice at the end for the seller. We would put as much detail as possible, but for a lot of stuff, it was just a generic title (i.e. tools).
When everything was said and done, we would tally everything up and provide the seller with a detailed receipt and a check for the amount.
In my experience, a typical sale that I hosted would break down as follows:
- Gross Sales: $5,000 (with $500 to $1,000 coming from online)
- Fees: $200
- Advertising Expenses: $250
- Labor (Wife’s Sister): $200 (I would give her $100 per day, about $10 per hour)
- Seller Net: $2,400
- My Net: $1,950
My best year was about three years ago, and saw us net about $10,000 running 5 estate sales.
The Pros and Cons of Estate Sales
Running estate sales was a lot of fun! As someone who loves going to them, I find that I’m in my element buying and selling, haggling a little, and just talking to people. Plus, you never know what you’re going to find – I’ve encountered just about everything, from rare coins to nasty molded furniture. Given my background, I’m also very frugal, so I like getting a good deal – both when buying and when selling.
Given the market and lack of competition, I think that it’s pretty easy for anyone to get started with estate sales – if you have the time.
And that’s the biggest con – time. Estate sales take time, from finding clients, to putting everything together, to giving up a weekend to do the event. I found that the max I could do was one per month, and even that was pushing it. Working full time and trying to balance this was tough. Plus, I never even got that many going. The most I ever did was five in a year, plus a variety of other selling online or elsewhere.
However, the income for the amount of work, I felt, was pretty decent. To earn the $1,950, I would say that we put in about 50 hours of work between my wife and I, including the day of the event. That’s about $39 per hour, which isn’t too bad. Plus, I considered anything I was able to sell online as a bonus, since the time commitment was less and the reward was a bit higher!
Side Hustles and Estate Sales Today
As I mentioned, the time constraint for doing an estate sale is the biggest drawback and roadblock to getting started, and for us, continuing to do them. I wasn’t able to host a single estate sale last year, and so I finally decided to let my website lapse and fade away. I was getting leads and felt bad not being able to respond to potential clients.
However, it just shows that the market is there. I’m finding that more and more people are searching online for estate sale companies, and yet, many of the “older” estate sale companies haven’t made the move online yet.
It doesn’t mean that I’m out of the side hustle game just yet. In fact, I’m totally about developing multiple income streams, and am working towards a new goal of beating the nine to five by becoming an entrepreneur. I’ve just moved towards activities that require less time, and are more flexible around my schedule. With a baby on the way, you can’t be giving up full weekends for estate sales, even if it is a lot of fun and makes a nice side income.
Are any of you fans of estate sales? Do you ever buy to resell?
Robert Farrington is passionate about helping young adults and college students get started with investing, and blogs about it at thecollegeinvestor.com. He is working on a new project with the goal of moving towards solopreneurship by 30 at his new site, Beat the Nine to Five. Be inspired to develop your side hustles and follow his free Quitters Checklist to start your journey with him!
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!