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How to Start an Estate Sale Company in 13 Steps

Written by:

Howard Tillerman is the Chief Marketing Officer for Step By Step Business and an award-winning marketing professional.

Edited by:

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

How to Start an Estate Sale Company in 13 Steps

Fast Facts

Investment range

$2,000 - $15,000

Revenue potential

$300,000 - $1.3 million p.a.

Time to build

0-3 months

Profit potential

$150,000 - $400,000 p.a.

Industry trend

Booming

Commitment

Flexible

When opening your estate sale business, keep these essential aspects in mind:

  1. Define your services — Decide on the types of services you will offer, such as estate sales, appraisals, consignment, and clean-outs. Consider whether you will specialize in certain items, such as antiques, collectibles, or high-value items.
  2. Zoning permits — Ensure your chosen location complies with local zoning laws for operating a business.
  3. Choosing a location — Select a location with adequate space for offices, storage, and staging areas. Ensure it is easily accessible for staff, clients, and customers.
  4. Appraisal tools — Invest in high-quality tools and resources necessary for appraising items, such as reference books, online databases, and measuring instruments.
  5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
  6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
  7. Hire staff — Hire knowledgeable and skilled staff for various roles, including appraisers, sales associates, administrative support, and movers.
  8. Partnerships — Build relationships with local businesses, real estate agents, and senior services organizations to generate referrals and collaborate on projects.
  9. Learn from real entrepreneurs who run an estate sale business:

The Blue Raven Approach to Estate Sales with Alyson Flynn

You May Also Wonder:

What sells best at estate sales?

Some estate sale items tend to find buyers more quickly than others. Top on the list of fast-moving merchandise includes jewelry and accessories, designer wear and shoes, vintage art and décor items, and home tools and kits.

How do I determine the value of unique or rare items for sale?

To determine the value of unique or rare items, research and consult with experts in the field. Use online resources and auction records to find comparable items and their selling prices. Remember that an item’s value is subjective and can fluctuate over time.

What do estate sales do with leftovers?

While you’re at liberty to do whatever you want with estate sale leftovers, you’re better off buying the items and selling them later at a profit, hosting a public auction to dispose of the items, or donating them to charity.

Can you negotiate at estate sales?

In most cases, the estate sale company offers a marked price on the items. However, this doesn’t mean that you can’t ask for a discount. In fact, you can get a good deal if you push the sales executive to offer you the items at a discounted price.

How can I build relationships with customers and grow my estate sale business?

Build relationships with customers by providing excellent customer service and being transparent about the items being sold. Offer fair prices and communicate effectively with potential buyers. Use social media and email newsletters to promote your estate sales and keep customers updated. Word of mouth can also be a powerful tool for growing your business.

estate sale business idea rating

Step 1: Decide if the Business Is Right for You

Illustration of an unbalanced scale on an orange background with black dots

Before you start an estate sale business, you’ll want to understand the market dynamics first. That way, you can determine if venturing into the industry is worth your time and effort.

Pros and Cons

Weighing the rewards and pitfalls of any business allows you to know what you’re getting into. Here are some pros and cons of starting an estate liquidation business:

Pros

  • Low startup costs and simple set-up
  • Few regulatory and compliance requirements
  • Straightforward and scalable business model
  • Work when you choose, from home or office

Cons

  • Highly competitive
  • Security concerns, especially when auctioning items on site

Estate sale industry trends

Estate sales, which involve the liquidation of all assets connected to an estate, is a market with great promise. 

Though the US is home to 15,000 registered estate sale liquidators, that works out to just one company for every 8,500 households((https://www.statista.com/statistics/183635/number-of-households-in-the-us/)), suggesting unmet demand.

Industry size and growth

estate sale industry size and growth

Trends and challenges

estate sale industry Trends and Challenges

Trends shaping the estate sale market include:

  • Aging population to boost demand for estate sale services
  • With 2.4 million divorces taking place every year in the US, the services of estate sale liquidators will continue to be in high demand. On average, divorces account for 160 annual liquidations for every estate sale business.

Challenges in the estate sale industry include:

  • Fierce competition
  • Long probate sale process

What kind of people work in estate sale?

estate sale industry demographics

Among those who work for an estate sale company is an auctioneer, whose job is to invite bids for each item sold in an estate sale.

How much does it cost to start an estate sale business?

Startup capital for an estate sale company ranges between $2,000 on the low-end and $15,000 on the high-end. Most estate liquidators spend $8,500 on average to get their business off the ground.

A significant portion of this money goes toward buying equipment, branding, advertising, and marketing. 

You’ll need a handful of items to successfully launch your estate sale business. Here’s a list to help you get started:

  • Computer, paper, pens, etc 
  • Cash register and desk/table
  • Truck for transporting items to auction site

You may also need to lease a storage facility to keep unsold items for off-site estate sales.

Here’s the cost breakdown.

Start-up CostsBallpark RangeAverage
Licenses and permits$100 - $100$100
Insurance$100 - $400$250
Computers and equipment$1,000 - $5,000$3,000
Office supplies$50 - $100$75
Branding, marketing, and advertising$500 - $7,000$3,750
Website and software$250 - $2,000$1,125
Hiring$0 - $400$200
Total$2,000 - $15,000$8,500

How much can you earn from an estate sale business?

estate sale business earnings forecast

Estate sale revenue varies widely, as you’ll generate more from an estate that has high-value merchandise. 

Most estate sale companies charge their clients somewhere between 25% and 50% of the value of all items sold, earning an average commission of 38%.

According to the Federal Reserve, the average American family has an estimated net worth of about $750,000. Setting aside the value of the real estate, the net worth drops to about $100,000.

At 25% commission, this means that every estate sale should generate $25,000 in revenue. If you handle one a month in your first year, you’d make $300,000 in annual revenue. Costs and overhead will leave you with a 50% margin, leaving you with an annual pre-tax profit of around $150,000. 

Once you build your brand you might handle three estate sales every month. At this stage, you might rent an office space and hire staff, reducing your margin to 30%. If you’re able to achieve a 38% commission rate, you could generate more than $1.3 million in annual revenue. Assuming a 30% margin, you’d make a tidy $400,000 in profit. 

Keep in mind, larger estate sale firms are able to close 10 or more estate sales per month and generate more than $1 million in annual profits! 

What barriers to entry are there?

The estate sale business has relatively few barriers to entry. The most notable obstacles include:

  • Low repeat client rate, forcing estate liquidators to incur high marketing costs
  • Persuading estate owners not to bypass estate sale companies 
  • Building a reliable brand and reputation

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Step 2: Hone Your Idea

develop a business idea

At this point, you have an overview of the market. Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

You’ll now want to develop your business idea further by working out the following aspects:

Why? Identify an opportunity

Your success as a professional estate sale company depends on your ability to identify opportunities faster than your competitors. Some of the best ways to identify business opportunities addressing an existing market gap or pain point, or turning your estate sale passion into a business. 

You’re likely to succeed in the industry if you: 

  • Have a sales, advertising, or marketing background; this industry is about promoting your services
  • Have great interpersonal skills
  • Have prior experience selling estate merchandise
  • Can leverage your connections to reach and influence potential customers

You might aim to fill a market niche with your estate sale business. For instance you could target baby boomers reaching retirement age or families looking to downsize amid the economic downturn. 

What? Determine your estate sale services

While the estate sale business primarily involves liquidating a client’s estate items, it can be segmented based on the type of product, sale method, and target market. Below are the most common types of estate sale businesses:

  • Estate sale: Liquidator sets the prices and sells estate items on the client’s property 
  • Estate auction: Liquidator puts the items up for auction and they go to the highest bidder
  • Hybrid: A combination of the previous two options 
  • Off-set auction: An auction house is hired to sell the items to the highest bidder.

In most cases, it takes just one day to complete an estate sale auction, though some estate sales last up to three days.

Apart from liquidating items, you can also incorporate other services into your business, including:

  • Estate cleaning
  • Building the auction site 
  • Selling refreshments to onsite customers
  • Buying items in bulk and selling them at a profit
  • Transportation of estate items
  • Consultation

How much should you charge for your services?

Estate sale companies charge 25% to 50% commission depending on the size of the estate, value of the merchandise, onsite security, type of items, and the need for other services, such as post-sale cleaning.

To determine what to charge, it’s best to evaluate the costs you’re likely to incur for a successful liquidation of your client’s estate. For instance, you can set a higher commission if the client asks you to dispose of any unsold items and clean the property.

It’s important to note that many estate liquidators offer 15% to 20% daily discounts to drive sales. This means items sold on the last day of the estate sale attract a lower commission. So, be sure to consider the expected sale price before you reach an agreement on your commission percentage with your client.

Further, you’ll want to check what your competitors are charging to ensure that your rate is within the industry standard. Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Identifying the right target audience for your business is one of the most critical elements of your marketing strategy. The main reasons people would want to liquidate their estate are the four D’s: death, divorce, debt, and downsizing. Thus, the primary target markets for your estate sale business will be heirs apparent, the recently divorced, debt-ridden families and people looking to downsize. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • The name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “estate” or “liquidate”, boosts SEO
  • Choose a name that allows for expansion: “Estate Sales Unlimited” over “Antique Estate Sales”
  • A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity. 

Step 4: Create a Business Plan

Here are the key components of a business plan:

what to include in a business plan
  • Executive Summary: Summarize your estate sale business’s focus on organizing and conducting sales for clients who are downsizing, relocating, or handling a loved one’s estate.
  • Business Overview: Describe your business’s services in managing estate sales, including item appraisal, staging, pricing, and selling household goods and valuables.
  • Product and Services: Detail the range of services offered, such as estate appraisal, sales management, clean-out services, and consignment options for unsold items.
  • Market Analysis: Assess the demand for estate sale services, considering factors like local demographics, real estate trends, and the prevalence of downsizing retirees.
  • Competitive Analysis: Compare your business to other estate sale companies, focusing on your strengths like extensive appraisal knowledge, marketing techniques, or customer service.
  • Sales and Marketing: Outline your strategy for attracting clients, including networking with estate attorneys, digital marketing, and hosting informative seminars.
  • Management Team: Highlight the experience and skills of your team, especially in areas like appraisals, sales management, and customer relations.
  • Operations Plan: Describe the process of organizing an estate sale, from initial client consultation to sale execution and post-sale cleanup.
  • Financial Plan: Provide an overview of financial aspects, covering startup costs, commission structures, and projected revenue.
  • Appendix: Include supplementary documents such as client testimonials, partnership agreements, or detailed market research to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to an estate sale. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your estate sale business will shape your taxes, personal liability, and registration requirements, so choose wisely. 

Here are the main options:

types of business structures
  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

types of business financing
  • Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding an estate sale business.

Step 8: Apply for Licenses/Permits

Business Licenses and Permits

Starting an estate sale business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your estate sale business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

types of business insurance
  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

Launching a Business

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as Prosale, Firstfifteen, and ConsignPro to manage retail point of sale, customers, inventory, expenses, and more. 

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Marketing

Here are some powerful marketing strategies for your future business:

  • Strategic Partnerships: Collaborate with local real estate agents, funeral homes, or antique shops to establish mutually beneficial partnerships, expanding your reach to their client base.
  • Targeted Social Media Campaigns: Utilize Facebook and Instagram ads to specifically target local audiences interested in estate sales, vintage items, or home decor, ensuring a cost-effective and precise reach.
  • Email Marketing to Subscribers: Build an email list of interested clients and regularly send updates about upcoming estate sales, exclusive previews, or special promotions to maintain engagement and loyalty.
  • Community Bulletin Boards: Physically post eye-catching flyers on community bulletin boards in high-traffic areas like grocery stores, coffee shops, and local community centers to attract local residents.
  • Mobile Advertising: Explore advertising on local public transportation, like buses or trains, to showcase upcoming estate sales and reach a diverse audience within your community.
  • Themed Estate Sales: Create themed estate sales around holidays, seasons, or popular trends to generate excitement and make your sales stand out from the competition.
  • Host Pre-Sale Events: Organize exclusive pre-sale events for select customers, offering them early access and a chance to snag the best items, fostering a sense of exclusivity and loyalty.
  • Utilize Estate Sale Listings: Leverage online estate sale listing platforms, such as EstateSales.net or Craigslist, to increase the visibility of your sales to potential buyers actively searching for such events.
  • Professional Photography: Invest in high-quality photos of key items for sale and share them on social media platforms and marketing materials to generate interest and entice potential buyers.
  • Local Newspaper Advertising: Place ads in local newspapers or community newsletters to reach a broader demographic that may not be as active on digital platforms.

Focus on USPs

unique selling proposition

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your services meet their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your estate sale business could be:

  • Get top dollar for your estate assets
  • Fast, hassle-free liquidation! 
  • The most technologically advanced and efficient estate sales
  • From set up to clean up — we take care of everything

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an estate sale business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in estate sales for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in estate sales. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

Building a Team for a New Business

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an estate sale business would include:

  • Estate Sales Executive — engages new prospects, closes deals, develops and negotiates contracts
  • Marketing Lead — ensures that clients can easily find your website; SEO optimization and social media 
  • General Manager — handles administrative duties, supports clients, hiring and firing, scheduling, bookkeeping

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Start Making Money!

Running a Business

Hosting an estate sale can be exhausting. But if you develop a system from the start, you’ll find it easier to dispose of all the items on your list. For example, it’s wise to arrange similar items together on the same table or in the same room. It’s also important to conduct research on each item to find the best price it can fetch. Holding an estate sale on the weekend is a good idea. 

Also, be sure to check the American Society of Estate Liquidators for more information on how to host an estate sale. You’re now ready to start liquidating and making good money!

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How to Start an Estate Sale Company in 13 Steps