Quote:
Originally Posted by notfast
Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.
And then the BP.
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Obviously your math is right. My emphasis on EASILY was meant to communicate that it would likely be more hours. Using our auctions as a yardstick we average about 1200 lots per auction and right around $100,000 per auction. We're more likely in the 200+ man hours neighborhood per auction between sorting, lotting, writing, photographing and packing/shipping. That DOESN'T take into account pick up time and expenses, marketing efforts from reaching out to media outlets, doing social media promotion and graphic design for print ads etc. which are all still directly related to that particular auction so it could easily be sneaking up on 300 hours. That's as opposed to just general expenses like advertising rates, rent, utilities, software fees (do people realize that most auctions pay a percentage of the take to the software company they deal with?) etc...
When I do a formal appraisal (for insurance, or legal purposes such as estate situations of divorce) I charge $150/hour and that work is much easier than auction prep.
If it really was two truck loads it was likely a LOT more than 1000 lots, and we don't really have a firm idea on value, but if it's 5000 lots worth $200,000 it changes the math pretty quickly.
The point I'm trying to make is, it's a lot more work than people realize. It's work that also can't be done by just anyone. Believe me we've tried to hire cataloguers and tried to train existing staff, it's a colossal pain. The amount of expense in running an auction is MUCH greater than people seem to believe. People think "Wow, no inventory costs, the business is pure profit." It's just not the case.
We don't have enough good information to determine if this was a fair deal or not, but I have to say (as I've already said) it doesn't sound crazy to me.