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Business

Estate sale business challenged by cut-rate newcomers

Kevin Godfrey of Henry Laurent Estate Sales shows

Kevin Godfrey of Henry Laurent Estate Sales shows off a custom-made diamond necklace that will be offered for sale for $25,000. Photo Credit: David L. Pokress

Kevin Godfrey’s company is based on four Ds: death, divorce, debt and downsizing.

As the owner of the Great Neck appraisal and liquidation firm Henry Laurent Estate Sales, Godfrey, 36, largely credits his firm’s success — it runs about 40 estate sales a year and generated $1.2 million in gross sales last year — to word-of-mouth recommendations from customers and real estate agents.

Yet, a cloud looms over the business. Within the last two years, a bunch of companies have entered the Long Island market, casting themselves as “professional liquidators” and charging commissions of 10 percent to 15 percent — substantially below Godfrey’s rates of 25 percent to 35 percent, he said. Plus, they’re underpricing furniture, art and jewelry, Godfrey said.

“They’re skewing the overall market — selling a $600 dining room table for $50,” said Godfrey, noting that these newcomers are making “it harder to sell higher-end items.” As a result, he is concerned his business will hit a wall.

But experts said Godfrey should not cut his commissions, which are within the industry’s standard range of 20 percent to 50 percent, because that would not differentiate his operation from the new competitors. Instead, they advise such fee-shielding strategies as expanding into other places where the competition is less fierce.

“He needs to invest now for the future,” said Doug Betensky, president of Hauppauge-based Upside Business Consultants.

A 17-year veteran of the appraisal industry, Godfrey said he got his start — and formal and on-the-job training — as an insurance claims adjuster for Allstate Insurance, State Farm and Nationwide Insurance. Gradually, he added the sale of his clients’ possessions to his portfolio. Three years ago, Godfrey said, he “formalized” his “freelance business,” naming his company after his deceased French grandfather, who owned a maritime salvage operation in South Carolina.

Susan Dvoor, a saleswoman with Keller Williams Realty Gold Coast in Manhasset, recently downsized from a North Hills town house to a Great Neck apartment and is pleased that she turned to Godfrey to sell her furnishings.

“He got me prices,” said Dvoor, “that I would not have thought of asking myself,” including $3,000 for a painting by Austrian artist Margit Füreder; Dvoor had paid around $3,500 for the piece about six years ago.

Although Godfrey’s business has seven full-time employees — and access to more if a home’s contents and size require extra salespeople — he limits his operation to one sale per weekend in order not to spread himself too thin. He also concentrates on the market’s high end as a way to protect his rates.

But earlier this year, in a move to create a new revenue stream, he launched Emptyup.com, a separate company that charges $35 an hour and the price of a Dumpster to clean out an entire home. After hauling away its contents, including disposing of debris and donating objects to charities on behalf of the customer, the firm charges a 35 percent to 50 percent commission on items it sells.

Helaine Fendelman, owner of a Manhattan appraisal firm that bears her name and a former president of the Appraisers Association of America, said Godfrey is smart to expand his focus beyond just the high-end market. Otherwise he could miss out on “a whole group of midrange objects that bring in money,” or possibly meeting a client who might refer him to a “very high-end palatial estate,” she said.

Betensky said Godfrey should also consider a marketing campaign to convey the added value his company brings to sales. He suggested providing real estate agents with a client handbook that delineates the how-tos of preparing for an estate sale and positions Henry Laurent as “the brand that people can trust.”

Godfrey said he is working on such a booklet and has created a complimentary step-by-step guide for new estate sale companies. He said he hopes the manual could help level the playing field by providing pointers on everything from properly pricing items to charging commissions.

He has also broadened Henry Laurent’s reach beyond Long Island’s high-end market. His efforts include selling items on Facebook, auction sites and through other dealers; expanding into Virginia via a licensing agreement with a family member; and partnering with auction houses, such as Sotheby’s and Christie’s, in marketing high-value pieces. In addition, he is spearheading a new national platform — set to launch in mid-October — that enables estate sale companies to join forces in marketing their estate sales, generating leads and auctioning their items online.

As for his operation on the Island, the Stony Brook resident plans to consolidate his leased warehouse facilities — in Setauket, Port Washington and Great Neck — where he stores and sells unsold pieces, into a large warehouse space on the North Shore. Godfrey, who relocated his headquarters from Southampton to Great Neck six months ago, sees the larger facility as an opportunity to hold more warehouse-based sales and attract additional mid-Nassau and city business, including customers who don’t have the time to hold an estate sale in their home or whose buildings don’t allow such events on the premises.

“We have to provide more services in order to cater to the high end and justify our rates,” Godfrey said.

AT A GLANCE

  • COMPANY: Henry Laurent Estate Sales, Great Neck
  • OWNER: Kevin Godfrey
  • EMPLOYEES: 7
  • 2016 GROSS SALES: $1.2 million
  • ANNUAL ESTATE SALES: 40
  • PRICIEST ITEM SOLD TO DATE: 1800s grand orchestra piano for $124,000

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