2023 Estate Sale Industry Survey: Insights and Trends

Welcome to the 2023 Estate Sale Industry Survey, a valuable resource capturing key insights and trends within this dynamic sector. This survey delves into the evolving landscape of estate sales and property liquidations, providing a detailed analysis of sale methods, service providers’ business operations, customer needs and industry innovations.

Since its inception, the survey has aimed to provide estate sale companies with insights to better understand and navigate the industry. It explores the operational dynamics, challenges, and achievements faced by industry professionals. Additionally, it serves as a benchmarking tool, allowing companies to compare themselves against industry averages. The survey also examines how trends have evolved by comparing these results with those from the last survey, conducted in 2021.

Let's explore the latest developments shaping the estate sales space and gain valuable perspectives from industry professionals and enthusiasts alike.

Geographic Spread: A National Perspective

The survey covered a broad spectrum of the United States, with respondents from 756 businesses in 38 different states. Texas continues its 2021 lead in respondents (12%), with a notable concentration of respondents in states like California (7%) and Florida (8%).

Primary Income: More Than Just a Side Hustle

Since 2021, the estate sale industry has seen significant growth, with 60% of respondents now stating that their estate sale business is their primary source of income, a notable increase from 49%. This rise emphasizes the sector's transition from a niche or side business to a primary profession for a significant portion of respondents.

Sales Conducted: Variety is the Spice of Life

This year, 74% of respondents are exclusively conducting estate sales, with 20% handling both auctions and estate sales, and 6% solely focusing on auctions. This is a shift from 2021 figures, where 7% were dedicated to auctions, 17% managed both, and 77% were solely involved in estate sales, indicating a gradual trend in sellers incorporating the auction sales method into their service offering.

Annual Volume: A Year in Sales

The annual number of sales across the industry shows a wide range of business sizes, highlighting different levels of operation. This year, 28% of respondents conducted fewer than 10 sales, making it a significant portion, while the most common category, accounting for 31%, handled 10 to 20 sales. Furthermore, 17% of respondents managed 21 to 30 sales. Compared to the 2021 data, where respondents averaged 32 sales annually, the latest data reveals the cohorts of sellers who may be operating on a monthly to bi-weekly scale.

Company Size: Small Teams, Big Impact

The estate sale industry primarily consists of small operations, with statistics showing that 28% of respondents work by themselves and 20% have one to two employees, making up nearly half of the sector with small team structures. This is followed by 19% of businesses with three to four employees and 22% with five to nine employees, reinforcing the sector's preference for smaller, more adaptable teams that can offer personalized service.

Wage Analysis: Hourly Rates

Overall, employee wages typically range from $10 to $30 per hour. 66% of companies pay between $15 and $20 per hour. The average hourly rate is $16.73, which represents a 12% increase from the average hourly rate in 2021. This suggests that compensation within the industry has become more competitive.

Extremely low or high wages, such as $8 or $50 per hour, are very rare, each reported by less than 1%. Interestingly some employers also offer a percentage of the seller commission to employees as compensation, and others offer a bonus on top of the wages paid.

Commission Rates: Fees for Professional Services

The most common client commission rates fall between 35% and 40%, with 25% and 30.92% of respondents, respectively. This aligns with the 2021 average of 37%, indicating stability in the industry's pricing structure. However, rates vary widely, ranging from 10% to 60%, highlighting the industry's flexibility to accommodate diverse selling scenarios and client needs.

Gross Revenue: The Financial Landscape

Most respondents report that a usual sale generates less than $20,000, accounting for 70.57% of all reported sales, an almost even split with 36.88% generating less than $10,001, and 33.69% generating between $10,001 and $20,000. This indicates that most estate sale transactions generate revenue in this range. Additionally, there is a gradual decline in the percentage of sales as revenue increases, with higher brackets such as $70,001-$100,000+ representing just 3.9% of reported sales. .

Minimum Sale Value: Setting the Bar

The data provides insight into the minimum gross revenue accepted by estate sale companies in 2023, compared to the 2021 average minimum of $8,468. Notably, 20.51% of respondents indicated they would accept a minimum of $5,000 revenue, while 14% set their threshold at $10,000. This indicates a preference to set a higher bar for sales revenue when compared to the 2021 average. However, there is variability, with some companies willing to accept lower minimums and others setting higher thresholds, highlighting the industry's readiness to accommodate a variety of client needs.

Item Count: From Minimalist to Collector

Most sales contain between 1,000 and 1,999 items, accounting for 23.17% of the total. Sales of 250 to 999 items are also common, each range representing 17.77% of sales. Smaller sales with 0 to 100 and 101 to 249 items are less frequent, constituting 1.22% and 10.63%, respectively. Larger sales, particularly those with over 5,000 items, make up 8.01%. Sales with 2,000 to 4,999 items vary more moderately in frequency, with percentages ranging from 2.96% to 12.02%. This distribution highlights a wide spectrum of estates to liquidate across the United States.

Common Reasons for Sales: Life’s Transitions

The most common reason for an estate liquidation is following the passing of a loved one, cited by 57.48% of respondents, which shows an increase from the 49% recorded in 2021. The second most frequent factor is due to downsizing or moving, at 38.2%, a decline from the 46% reported two years earlier. Other reasons include business liquidation and debt, each accounting for 0.36% of sales, and divorce, slightly higher at 0.54%. Hoarding is the least common reason, at 0.18%. This data highlights shifting dynamics in the reasons behind estate sales compared to 2021, particularly with a notable increase in sales due to death which mirrors changes in the national mortality rate.

Sourcing Clients: Diverse Channels for Diverse Needs

Respondents indicate that word of mouth is the most effective source for client leads, accounting for 31.37%, closely followed by personal networks (25.62%) and professional networks (23.71%). Digital platforms also play a crucial role, with the company's own website and EstateSales.NET each contributing around 22% of leads. Google and Facebook Ads are significant too, generating around 10% each. Other noteworthy sources include email marketing (13.55%), and online aggregators like Angi's, Craigslist, and Yelp (4.96%). Traditional advertising and other social media platforms each account for about 6%.

Online Sales: Embracing the Digital Age

In 2021, 27% of companies incorporated online estate sales and auctions into their business operations for the first time. Two years on, while 55% of respondents still do not conduct any sales online, 37% are embracing a mixed approach of both in-person and online sale formats, and 8% are selling 100% online only. This demonstrates a cautious yet growing adaptation to digital sales methods in the industry.

Final Thoughts

As we wrap up our overview of the 2023 Estate Sale Industry, it's evident that the sector continues to evolve and succeed amidst the changing population, consumer needs and market dynamics. This survey has provided deep insights into the industry's landscape, from geographic distribution and primary income sources to the adoption of online sales and the diversity of company sizes. Notable mentions are the growth in digital sales, a wider range of channels used to execute sales strategies, and shifts in client sourcing techniques, all highlighting the industry's adaptability to new technologies and selling methods. The estate sale industry remains an essential part of the American economy, expertly assisting families through significant transitions. The insights from this survey will continue to help companies strategize and thrive in their businesses while serving their local communities.

A detailed report is also available for more information and historical data. For press inquiries, please contact us at press@estatesales.net.