🔒Auctioneers see opportunity in CT’s lightly regulated industry

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Connecticut has a reputation for being a tough place to do business. But the co-owners of CT Auction House in Vernon wish things were just a little tougher in their line of work.

Business partners David Bonadies, Scott Liscomb and Patrick Soucy recently opened their auction house on Route 30. Its first auction, which attracted 150 people, was held Oct. 21. All three are industry veterans with Soucy the owner of the popular Golden Gavel in East Windsor.

It's Soucy who suggested during an interview amidst public previews for the site's first auction that more regulation might be good for his industry. “Every other state has it but Connecticut,” Soucy said. Regulations exist little beyond a requirement that furniture upholstery be sprayed and sanitized before it goes to bid.

The state does have strict regulations on automotive auctions. The sale of precious metals is regulated at auctions and municipalities can require auctioneer registration. Auction houses under most circumstances must also charge sales tax, according to state laws. But the last time laws concerning auctions were revised appears to be 1997.

Soucy said neither auctions nor auctioneers need licenses in Connecticut.

“I'd like to see it because we get 'flashes in the pan' who come over the border from New York and Massachusetts,” he said describing auction firms that will hold pop-up sales to avoid regulations in their own states. Pennsylvania, Soucy added, requires a college course to become an auctioneer.

Assessing the market

CT Auction House is a more slimmed down version of Golden Gavel but in a high-traffic area. Liscomb said an estimated 20,000 vehicles a day pass by their Rt. 30 location.

Soucy didn't want to open Golden Gavel II as a sequel. He wanted to give this operation a different flavor. He's the sole owner of the East Windsor location, while this is a joint venture. He had been looking to expand into southern Connecticut. He said there's no fear of diluting the market. “There's a Burger King on one corner and a McDonald's on the other,” he said.

The partners picked Vernon because Bonadies lives there and Liscomb grew up in Manchester. They said Vernon, Manchester and South Windsor are aging communities with good sources of material for their auctions. “We're eying other locations if this works out,” Liscomb said. “The demand is there.”

Liscomb and Bonadies own Great Picks, an off-site estate sales service. They remove contents of a home and sell it online or through remote auctions. They had outgrown local auction houses.

“We were finding a void of auction houses that would take an entire estate,” Liscomb said, adding 80 percent of their volume is between junk and high-end goods. Soucy said the average auction house wants to take the best six or 12 items.

“We take care of every step of the process,” Soucy said. It does appraisals. Family keeps what they want and then CT Auction takes the rest to auction or donate to charity. Items that are trash are hauled to a dumpster and the property is swept broom clean.

This isn't a business that relies just on the surrounding communities. The partners have seen work from as distant as Newton, Mass., to Milford. “If they have good stuff, it doesn't matter where we will go,” said Soucy.

Business model

Bonadies said there is a mix of sellers, retail people, dealers and the public who come to auctions. The 6,000-square-foot facility, formerly the arcade at CT Golf Land off I-84, employs five people overall. By 2016, the partners plan to have four full-time and 10 part-time employees.

What's not readily apparent to the casual observer is that the auction is just the icing on the cake. A lot goes on behind the scenes and varies from auction house to auction house. CT Auction will go into a home and process all the items inside for auction, donation, or the trash bin. “We really need to be a one-stop shop. That is the demand we're getting,” said Soucy.

Liscomb said Baby Boomers are retiring at the rate of 1 million a year and they typically accumulate 30 to 40 years of stuff. Auctions are proving to be a popular business with Millennials who like to source repurposed items.

Marketing for an auction house relies heavily on the Internet. Top Google placement is important as bidders will come from different states and even other countries to bid over the phone during auctions. Internet marketing becomes more important as Baby Boomers rely more on the web for finding goods and services. “We hear from a lot of people who didn't know who to call,” he added.

Auction houses make their money by charging a 15 percent buyer's premium, which pays for overhead costs like marketing and rent. The seller doesn't pay fees. Instead a commission is charged on a sliding fee depending on the value of the item with commissions dropping as value increases.

Furniture from the 1960s is drawing strong interest at auction houses. Soucy said it's more popular than 1860s furniture. “Traditionally when the economy goes soft, the used furniture market picks up and antiques go soft,” he said.

Scott said costume jewelry is selling well now. “Five years ago people would throw it away,” he added.

The same is true of Baby Boomers' playthings from childhood. “A lot of Baby Boomers are trying to buy back the toys of their youth,” Soucy said. “We just had a sale of G.I. Joes. Things were going crazy.”