When the Dickson family wanted to sell off a wide array of items – comic books, World War II posters, furniture, fine jewelry and more – they hired Blue Moon Estate Sales to conduct a sale at their home.
Chris and Terri Dickson were so impressed with the company’s work that, after they moved from the Triangle to Greensboro, they became Blue Moon’s first franchisee.
“Without them, I don’t think we would have been as successful as we are,” said Terri Dickson. Her 2-year-old franchise has racked up $335,000 in sales so far this year by conducting estate sales on the weekends – already doubling their 2014 sales.
Based in Fuquay-Varina, Blue Moon Estate Sales is one of the few estate sales companies that offers franchises. Since the family-owned business began offering franchises in mid-2013, the company has grown from its flagship Raleigh operation to 11 franchises – mostly in North Carolina, but also in the Philadelphia area and Texas. A 12th franchisee has already signed up and is expected to begin operating early next year.
“We figure we take about two to three years off the learning curve,” compared to people who go into the business for themselves, said David Blue, Blue Moon’s vice president.
Gross sales – that is, total proceeds from items sold – are on track to reach $2.5 million this year, more than double last year’s volume.
“The majority of that went to our clients,” David Blue said. Blue Moon franchises typically charge a 35 percent commission on the total proceeds, which for individual estate sales have ranged from a minimum of about $5,000 to more than $80,000.
For the uninitiated, an estate sale is a liquidation of the contents of a home via a sale that is held on-site and typically runs for two days. Blue Moon sells items at a fixed price the first day; the second day, everything’s discounted up to 50 percent.
“Once in a while, we run into people who think that we just conduct garage sales,” said Debra Blue, who co-founded the business with her husband, Ken, in 2009. “We definitely do not simply conduct garage sales.
“We sell everything from the pots and the pans in the kitchen to the Lexus in the driveway,” she said. “We sell fine jewelry, artwork, all of it.”
That requires determining the market value of a seemingly infinite array of items – whatever people have in their home – and staging the house to create an inviting array complete with display tables covered with tablecloths.
“What people grossly underestimate is the amount of work it takes to successfully conduct estate sales,” said Julie Hall, director of the American Society of Estate Liquidators. “You’re unearthing a lifetime of possessions. You have to clean it, organize it, research it, advertise it, it goes on and on.”
Estate sales companies are enjoying newfound popularity.
Although there’s no way of knowing for sure because the industry isn’t regulated, Hall estimates that there are more than 16,000 estate sales businesses nationwide – most of them mom and pop operations – and the number continues to grow rapidly.
“We aren’t seeing any signs of it slowing down,” Hall said.
Locally, the number of estate sales companies has mushroomed.
“There were only four estate sales companies in Raleigh in 2009 when we started, and now there’s 22,” said Debra Blue.
There was a time when estate sales mostly arose from the death of homeowners whose heirs didn’t want the bulk of the home’s contents. That’s still a factor, but people looking to downsize – especially baby boomers reaching retirement age – have been added to the mix.
“About 80 percent of what we do is people downsizing and they just don’t know what to do with everything,” said Debra Blue. “About 20 percent of the time, people have passed away.”
When the Blues founded the business six years ago, Ken Blue was a recent victim of a very different kind of downsizing – he was working as a contractor at IBM when his group was laid off.
“After a few months of job hunting, we just looked at each other and said, it’s time to create your own job,” Debra Blue said.
They turned to estate sales in part because they had been going to auctions and estate sales for years just for fun. They even sold antiques on the side at antique shows in Wisconsin when they lived there.
At the outset, Ken Blue was the main force behind the business while Debra Blue, a physician, helped out some on the weekends while continuing in her job as the medical director at Hospice of Wake County.
The enterprise got off to a brisk start, so much so that it wasn’t long before the couple started thinking about expansion.
“We were riding around in the countryside one day and there was this huge billboard that said, ‘Franchise Your Business,’ ” Debra Blue said. “And the bells and lights and whistles just went off.”
But it wasn’t until 2013 – after establishing a successful track record for the flagship Raleigh business and laying considerable groundwork – that the company began offering franchises. That’s also when Debra Blue transitioned to a new career in estate sales.
Today, Debra Blue runs the franchising side of the business while her husband focuses on running the Raleigh estate sales – and providing on-site training for new franchisees.
Their son David, who joined the business after graduating from college in Wisconsin with a business degree, works both sides of the business. One of the things he focuses on is the company’s website, which is key to the franchisees’ ability to attract customers.
“We spend a lot of time focused on SEO,” or search engine optimization, said David Blue. “Our main competitors in our industry are local operations that may not have the resources, or the education, to really know how to properly optimize their websites.”
Franchisees pay $25,000 up-front plus a 5 percent royalty on gross sales. Each franchise typically includes a full-time owner or owners who work out of their homes plus a contingent of part-timers.
The franchisees receive a combination of classroom and on-site training, typically lasting two weeks, on how to start and run their franchise – including instruction on how to price items and a course on ethics.
“We have heard some horror stories of people … conducting the sale and not paying off the clients,” said David Blue. “Or selling nice pieces to themselves for nothing – some big ethical problems.”
Help with pricing
Andi Zuckerman, the owner of a franchise in the Philadelphia/South Jersey area, gives the training top marks. “It gave me everything I needed,” she said.
Zuckerman, who previously sold office furniture, began operating in June.
“I don’t know if it’s like this everywhere, but the demand for sales in this area is unbelievable,” she said. “I’ve had sales every single weekend except for the holidays. I’ve even had two on some weekends.”
Franchisees also get help with marketing – the headquarters operation pays for their pay-per-click Google AdWords for their first year of operation – and with pricing items.
“To me, art is hard,” Zuckerman said of pricing. “Sometimes the signatures are tough to decipher.”
In general, said David Blue, factors that determine pricing include: the item’s age and condition, what customers have paid for similar items in the past, what people have paid for similar items at online sites such as eBay, and “whether or not it’s in vogue anymore.”
“Some things that weren’t popular 10 years ago are extremely popular right now, like mid-century modern furniture, more contemporary things,” David Blue said.
Franchisees can call upon the Blues for help with prices or consult with an online networking group that all of the franchisees participate in.
With the estate sales industry in expansion mode, the Blues harbor ambitious expansion plans. Nonetheless, they’re picky about franchisees and have turned a handful of applicants away because they didn’t seem to be a good fit.
“It’s hard, but at the end of the day it’s what needs to happen,” David Blue said. “Because it’s so crucial right now that we have the right people in place to grow this correctly. We don’t want our franchises to fail, especially when we are so new in the franchise world. So we really have to be selective.”