How do I check what an estate sale company really earns before buying?

An estate sale company usually does not own the goods it sells. It earns a commission on the proceeds of each job, sometimes with fees for cleanouts or for buying out leftovers. Because the money moves through the company on behalf of clients, the financial statements can look larger or smaller than the real earnings. Checking takes a job-by-job look.

Follow the money on a sample of jobs

Ask for a list of recent jobs with the gross proceeds of each sale, the commission kept and the settlement statement sent to the client. Match those totals to the bank deposits and to the books. Ask how the company holds client money between the sale and the payout, and whether any client is still owed. A tidy trail is a good sign; gaps need explanations.

Separate the fee types

Commission is one revenue line. Others may include flat fees for cleanouts, charges for hauling, fees for appraisals or the company buying items outright to resell. Ask for each line separately, and ask which are repeatable. A buyer should also learn who prices the items and how, so ask who prices the items and what happens if that person leaves.

Look at the pipeline and the labour

Work arrives in lumps, and a busy season can hide a thin one. Ask how many jobs are booked, where they came from and how far ahead the calendar runs. Then ask what the owner does on each job and whether the books pay anyone for that labour. If the owner works unpaid or on a modest draw, a replacement manager changes the picture.

Bring in your accountant

Your accountant can read the statements with you and help you separate client money from company money. Our page on how an antique store owner’s take-home is checked covers a different model, owned stock, but the habit of tying records to deposits applies here too.