“This is a little bit intimidating.”
Ashley Wilson is peering into a very dark, very deep closet full of boxes. She’s trying to figure out how to clear them all out.
This closet is not Ashley’s. Neither, for that matter, is this house—a 10-year-old row house in Mt. Adams that’s sale pending. And Ashley has absolutely no idea what she will find in the roughly 30 boxes neatly stacked along wooden shelves that run the length of the space. But she was brought in to get rid of pretty much everything, so she gets to work unpacking. Within an hour she’ll be sitting cross-legged on the floor, surrounded by upholstered dining chairs, mismatched glassware, framed lithographs, family heirlooms, a weight-lifting bench, and a basket full of pillows—the organized chaos of one home’s innards.
Ashley is an estate sales specialist (a.k.a. organizer, and in her case, photographer) for Everything But The House (EBTH), an online estate auction company with a fast-growing national presence on course to make more than $60 million in revenues this year. Founded just nine years ago, the company started in Cincinnati with two people, a website, and the hope of clearing six figures their first year just staging tag sales. Now the company has more than 500 employees, bidders in 100 different countries, and locations in 25 cities across the nation. They expect, says Chief Revenue Officer Jon Nielsen, “to more than double last year’s revenues in 2016.”
So how did a little local tag sale business morph into something so big? And how is it that this same company continues to grow exponentially, with no signs of stopping? The story begins more than two decades ago, at a tag sale (of course) in Mariemont. It was there that Jacquie Denny, a middle-aged woman who was running a successful tag sale company called Sorting It Out, first met Brian Graves, an unkempt-looking twentysomething with long hair and a beard who’d just gotten off the night shift at work.
He was an atypical customer,” Denny says, laughing, as she recalls that first time she saw Graves.
“At the time I was going to college for architecture, working at UPS 43 hours a week, driving a forklift [for another company], and doing construction jobs on the side,” says Graves. He had started collecting antiques to furnish the old Victorian he’d bought with his fiancée and to supplement his income. “Literally, every time I had a spare minute, I was going to buy stuff.”
Despite his questionable first impression, Graves eventually became “a fixture” at Denny’s sales, she says, purchasing items to re-sell and even helping other customers load things they’d bought into cars. Before long, the two discovered that “we really had a similar alignment in terms of being an advocate for families,” says Graves. Denny, he notes, quite clearly understood “the service component—the psychological impact of the transition that somebody’s going through” when they have a tag sale (events usually preceded by death, relocation, or divorce). And Graves, says Denny, was “always trying to be fair to the family,” even as a buyer. In fact, he never hesitated, he says, to tell homeowners who’d underpriced items: “Put that back in the house—it’s worth more.”
The pair crossed paths off and on for about 15 years. Denny stayed in the business full-time, while Graves transitioned to working in information technology, first for UPS and then Children’s Hospital. But right around Y2K, tag sale revenues began slowing as people began selling things online instead—mainly on eBay. “There was a pretty indicative change in the marketplace,” says Graves, who himself had started buying and selling online.
Still, working with eBay definitely had its flaws. For starters, finding a buyer for big ticket stuff, like cars and large pieces of furniture, was not always easy. “There was this contingent of items that would never sell on eBay because the shipping costs were prohibitive,” Graves says. Those kinds of things needed local buyers. The other problem? eBay was great at selling items individually, but “they couldn’t eliminate the entire contents of a property.”
Denny, meantime, was one of a dwindling number of people successfully running tag sales. She and her then-part-time partner Teresa Newberry “were still doing the covered wagon thing,” she says. Even so, “the writing on the wall was that more and more of our clients were going to eBay.” If they were going to stay in the industry, she knew something would have to change. She also found herself frustrated with the fact that families were still left with tons of items to donate or trash after the sales ended.
In 2007, Denny and Graves decided to combine their skills to form Everything But The House. The business was to be a modern version of a tag sale for the greater Cincinnati market, with the added bonus that when the sale was over, nothing at all would be left (a concept Denny and Newberry had previously experimented with). Graves quit his six-figure job and “we looked at how many sales we’d have to do per month to recoup his salary,” says Denny.
The pair knew that, as with eBay, a website would be an integral part of the business. But they also knew that transitioning into online auctions, especially in a limited market, could be rough. Ultimately, “we didn’t want to convert [to a web-based platform] with a very small group of people,” says Denny, “because then the early [seller] families would take a bath.
“No wireless in the wagon,” she adds, “but we actually had a plan.”
For EBTH’s first nine months, the company operated traditional tag sales and worked on bringing “awareness to the site”—using it to market certain items at upcoming sales, but also “building an e-mail list and a database, so when we made a transition to a bidding platform we actually had available bidders,” says Graves. Thanks in part to his IT background, the move online went “pretty smooth”; still, growing a custom auction business from the ground up had its challenges.
“Historically at live auctions you’re there the day of the sale—you bid and take [items] home with you,” says Graves. Managing pickup and shipping logistics with an online auction was not so easy. Buyers who were supposed to be picking up would come late or forget to come altogether, and Denny did all the shipping herself. “My whole house became a UPS shop,” she says. “There were packing peanuts in the sink, boxes all over. My front porch became the EBTH North warehouse. My kids couldn’t ask friends over because they probably thought I was a drug dealer.”
The pair also found themselves “trying to solve everybody’s issues,” says Denny. They began accruing voice- and e-mails from buyers, sellers, and potential clients faster than they could respond; they even hand-delivered a sold item themselves during a snow emergency when no one was allowed on the roads. By 2011 revenues were approaching $5 million annually but working “100 hours a week wasn’t doing it for either of us,” says Denny.
“We were wearing all of the hats and we were comfortable with those hats,” notes Graves, “but there’s only so much of us to go around.” Another hurdle: while the website’s software worked fine in Cincinnati—with what Graves describes as an “exceptional” bidding platform (“very stable, with dynamics that encouraged participation”)—it would not be able to handle a major company expansion.
In short, they needed more “human capital” to implement their vision. Graves and Denny knew they didn’t want to sell, but they weren’t opposed to the idea of taking on additional partners. Enter Jon Nielsen, Andy Nielsen, and Mike Reynolds. “The three elves,” says Denny, “in the covered wagon.”
The trio of entrepreneurs had been developers (Jon and Andy are siblings—an American businessman’s version of HGTV’s Property Brothers), but “coming out of the downturn,” says Andy, “we realized that real estate wasn’t really where we wanted to be.”
They were looking for something new to invest in when Reynolds, an EBTH bidder since 2009, called Jon into his office one day to show him the fledgling company’s website. “They had a Rolls Royce Phantom and a BMW M5,” Reynolds recalls, “[and] they were both at $5 each.” Jon, a car guy, says Reynolds, thought “it was the best thing ever.”
The cars sold to another bidder for well over $5, says Jon, but the group “fell instantly in love with the whole model” of EBTH. “Their reach here already looked to be pretty substantial, and we were curious about their plans for growth.”
They contacted Denny and Graves with the intent of acquiring the business, but the founders held firm in their commitment to stay. Reynolds and the Nielsens officially joined EBTH as partners in May 2012, with Reynolds stepping in as chief financial officer, Jon becoming the chief revenue officer, and Andy the chief executive officer. (Denny’s title now is chief development officer; Graves is chief learning officer.)
“We chose this group because of who they are—their moral compass, their passion for the business,” says Denny. Although it was hard initially to give up control, the founders consistently today find themselves amazed at “how the stars have continued to align,” adds Graves.
The company moved its headquarters from St. Bernard to Fourth and Walnut downtown last summer after considering a move to Chicago; it helped that the city—together with JobsOhio and REDI Cincinnati—helped them obtain a state tax incentive of 1.259 percent for seven years, which convinced them to stay. But EBTH’s growth is best expressed in raw figures. Annual revenue shot up from $6.9 million in 2012 to $13.5 million in 2014, and Jon says they expect to surpass $60 million in 2016. (In April 2016 alone, “monthly revenue was up by 162 percent over April 2015,” he notes.) The company has been entering roughly one new market every month since 2015. And the website, Jon adds, now boasts “750,000 or so uniques a month,” tech-speak for “visitors.”
The “three elves” brought a lot to the table, including $43 million worth of private equity and venture capital funding that they’ve raised since 2014. (According to the Business Courier, the company made the Inc. 5000 with 190 percent growth and raised the city’s second-largest Series A round of funding in November 2014.) The new partners also ramped up the company’s technology, using it to do everything from “protect monies coming in for sellers,” to “innovate marketing channels, ship unpackaged inventory with the click of a button,” and cull “data to drive the decisions we make.” Add it all up, says Andy, and you’ve got “the beginning of the next evolution of EBTH.”
There’s one other very low-tech thing that’s helped boost EBTH’s bottom line, too: baby boomers. “Many people presume that the majority of possessions on our website come from the estate of someone who’s passed away,” says Jon. “But over 50 percent of our business is now downsizing.” It’s a trend, adds Denny, that likely won’t even plateau until 2030: “We’re downsizing the largest generation in history.”
Less than a week after that first encounter with the closet, Ashley’s back at the house in Mt. Adams. This time she’s whittled down the home’s sellable items into groupings, or “lots”; each lot, she says, should be worth at least $50 to $100. As she photographs everything for the website, her assistant for the day, Jake—a new employee—uses a laptop to type descriptions and do online research for some of the things she’s found (among them: a Coca-Cola poster from the 2002 Winter Olympics, signed by Peter Max). An EBTH online tutorial for new employees serves as background noise, with the moderator periodically saying things like: “The EBTH website is your friend.” And: “If we’re not creating raving fans, none of this is working.” According to Denny, referrals are the company’s best form of advertising.
The general EBTH online auction process is, by now, a well-oiled machine. A client calls, indicating they’ve got a houseful of stuff to sell. An EBTH relationship manager comes out to do a free consultation, which includes a walk-through of the property and some questions: “Why is it they need us? What type of situation are they in? What type of timeline are they on?” says Denny. If the homeowner is ready—as 85 to 90 percent of them usually are, she says—they sign a contract.
The process from there lasts roughly four weeks. An organizer, like Ashley, is assigned to the project (big jobs—“in excess of 40 years’ accumulation,” says Denny, use multiple organizers) and almost immediately gets to work dividing the home’s contents into four categories of items: sell, donate, throw away, or set aside for the homeowner. Documents, photos, and heirlooms fall into the last category. Organizers discuss unexpected found items of a sensitive nature—love letters, maybe pornography—discreetly, with either a family member or executor.
Depending on the size of the estate, organizers spend anywhere from 2 to 10 days cataloguing everything and taking photos of the things they’ll sell. Ashley, a DAAP graduate with an art history degree, has enough education and experience to make a rough determination of value based on a little bit of online research, but EBTH has a strong in-house support network, too—experts in gemology, art, collectibles, coins, furniture, glassware, and porcelain are all on staff. “For other specialties that we do not use on a daily basis, like Southwest pottery,” says Denny, “we hold relationships with experts outside.”
After the organizers have uploaded their photographs and written descriptions of every item, the marketing staff sends out e-mails to previous bidders to drum up excitement for upcoming sales. Once a sale goes live, it stays live for seven days. Bidding for every item on the website starts at a dollar. This makes some families uncomfortable at first, says Graves, but it consistently works out in the end: “We throw everything into the hopper for a family, and that always runs into a strong, medium, fair market value…. If you’re holding a five-figure thing in front of a football stadium of educated buyers, they’re not going to let it go for a buck, [or even] $500. They’re going to understand some level of value.” And unlike on eBay, potential buyers are given additional time to make counter-offers if someone else swoops in at the last minute and ups the bid. EBTH has as much skin in the game as the homeowners: Every penny of EBTH’s profit on these sales comes from commission, typically 35 to 45 percent—no fees upfront, or on the back end, either.
Perhaps the most intriguing thing about the site is the variety of items it showcases. “Cars inevitably perform very well,” says Jon. But over the past nine years, EBTH has peddled everything from yard tools to Charley Harper prints, jars of beads, antique scissors, basket collections, dresses, designer purses, and a signed Andy Warhol. Once EBTH even sold a basement full of “60-year-old newspapers for $10,” says Jon. Even better? The buyer picked them all up. “It would have cost [the seller] $500 to have somebody come in and haul it out,” he adds. Like those papers, roughly half of all EBTH purchases are picked up; the other half—a number that “has grown exponentially over the last six months,” says Jon—are shipped. In new markets, notes Andy, “we ship closer to 70 percent of our inventory.”
The biggest single-item sale in company history was $89,000, for a 2004 Boston Red Sox World Series ring. The most unusual sale item is a tie between a horse in Lexington, Kentucky, and a coffin from a funeral home—“contents not reviewed,” deadpans Graves.
“A typical estate sale,” say Jon and Andy, “generates between $20,000 and $30,000. That said, we handle sales less than $20,000 and we also handle multi-million-dollar estates.” The company will also sell small lots (i.e., one room’s worth of items or a small collection), and even single, rare items for clients. Oftentimes these smaller collections are combined with others from different clients—kind of like a virtual multi-family yard sale. Sometimes, though, if a single item’s value isn’t very high, it’s not always worth the homeowners’ time and effort to sell it on EBTH, says Graves. “We’re looking at each situation independently,” he notes, “and trying to see if there’s a good fit there.”
Regardless of what they’re selling, there’s a definite service component to EBTH that makes the company unique. You might call it a soul, if businesses have such things. It seems to rest in the knowledge and experience that Graves and Denny accumulated over so many years buying and selling on their own. “We’re a life-event company,” says Graves. “Everybody we deal with is experiencing death, downsizing, divorce, relocation. We make sure our crews are empathetic and understand that.”
“It’s not a sad process with us,” adds Denny, noting that the natural “closure,” “inclusiveness,” and “transparency” that come with an online estate sale all play a huge role in making clients (and their extended families) feel more comfortable about moving on. “In all these years, I’ve never gotten one letter saying, ‘Thanks for the big check,’” she says. “It’s always ‘Your crews were angels.’ It’s always about the service component.”
One thing Denny and Graves feared they’d lose when they first converted to an online platform was “face-to-face interaction”—the human element. But they’re still handling those local item pickups, and earlier this year, the EBTH website staff began working to create a “community” feel by posting stories about sellers’ family histories online, like the one about a deceased woman named Fan, a Southern belle-slash-psychic who met her husband during a reading and favored all things pink. “We found people really respond to that,” says Denny. “People love to become curators of things. They want to know where they came from and how they connect. Whether our parents live in a $30,000 home or a $3 million home, all of them have interesting stories.”
Another thing that’s different about EBTH is what the executive team calls the “multi-directional” aspect of the business. The company represents homeowners by selling nearly 100 percent of listed items for the best possible price and taking a huge chore off their hands during an otherwise stressful time of life. But EBTH protects potential buyers as well, by “doing the best we can to research and represent every item and give it an accurate description,” says Graves. This includes multiple photos of every item—different angles and various close-ups—plus written descriptions that include disclaimers about damage. EBTH employees are trained to think of themselves, says Graves, as a “kind of personal representative” for buyers, going into a level of descriptive detail “that you typically don’t see in this industry.”
Even so, as with any auction process, buyer’s remorse is inevitable, however occasional. People get caught up in competitive bidding and sometimes pay more for an item than they really wanted to, says a cashier named Phil Germann who, along with his wife, has worked for EBTH four and a half years. But since you can’t even start bidding until you’ve given the website your credit card number, the buyer (and ultimately, the company) is always protected. Unclaimed items, though rare, are held in the company’s warehouse for 21 days. After that, says Denny, they’re usually “donated to ReStore to support local Habitat for Humanity Projects.”
It’s pick-up day in Mt. Adams, and there’s been a little incident.
A local antiques dealer (and self-described EBTH addict) is standing in the garage with both hands over her eyes, muttering “Oh my Jesus” over and over again. In fact, she seems afraid to turn around. Her husband and nephew have just dropped a roughly seven-foot-tall wood and glass Chelsea House curio cabinet in their haste to load it into a pickup truck. The dealer paid $355 for the piece, and is hoping to sell it for significantly more. The glass is miraculously intact, and the rest of the piece mostly unharmed. Everyone in the room catches their collective breath.
Pick-ups are normally pretty uneventful, though, Ashley, Jake, and Phil will be glad when the day is over. They purposely stay cordial, but mostly hands-off, as buyers come to collect the treasures they’ve won. A middle-aged couple looks especially happy walking out with the signed Peter Max poster, which they snagged for $360.
Jake’s just been promoted to organizer and next week Ashley will move on to cataloguing a new sale up in Sharonville. A few days after that an e-mail will pop up in targeted inboxes across the country touting “Our biggest, most incredible sale yet!”—the contents of the Strader family’s Clifton estate (Jack Strader was a local radio personality). This one has a story with it, told by Strader’s grandson, and includes everything from an “antique porcelain toilet bottle” with bids hovering around $12, to three volumes of “Audubon’s The Quadrupeds of North America,” whose bids on day six were already up to $7,650.
The executive team is quick to note that high-profile estates are more the exception than the norm. “When you use the term estate, a lot of people think wealth,” says Reynolds. “It’s really the typical home we handle.” Like the one in Mt. Adams, or the one where Ashley is headed next—a former professor’s place with a lot of science glass, Asian decor, and a Lionel train set.
Back at EBTH headquarters, plans are in the works for a new $1 million, 100,000-square-foot distribution center on Cooper Road in Blue Ash (state tax incentives came through this spring). It’s a response, say Jon and Andy, to continually climbing “e-commerce volumes” that will ultimately “cut down on shipping times.” The executive team is working diligently to stay ahead of the curve in an estate sales market “driven by downsizing,” says Andy, that is estimated to grow “by $10 billion between now and 2020.” And although “the baby boomer generation will be downsizing through 2034,” he notes in an e-mail, “Generation X is expected to surpass the size of the baby boomer generation by 2028—and the Millennial generation already outsizes both the boomers and Gen X!” In other words, as the folks at EBTH see it, almost everyone on this planet—well into the foreseeable future—will be downsizing at some point, so business is safe.
Given those facts, EBTH’s main goal is ambitious—becoming “the household name” in estate sales, says Reynolds. But for a booming online auction company that started out as a partnership between two tag-sale buddies, the sky really might just be the limit. Sure, there will always be problems to work out. Denny and Graves continue to worry about losing that human element; as the business has grown, Denny admits “it’s harder to maintain the personal touch.” And, according to the Better Business Bureau website, where the company maintains a 3.8 out of 5 rating, shipping is still a thorn in EBTH’s side (it accounts for the majority of the company’s consumer complaints). Even on employee review website Glassdoor.com, current and former staffers alike often mention “constant change” in structure and processes as a challenging byproduct of EBTH’s rapid growth. The company takes this uncensored feedback to heart, say Denny and Graves, while trying “to see the common themes within [complaints] and just work that much harder to eliminate misunderstanding.”
There is also always the distinct possibility that an even bigger fish could try to buy them out. “At the end of the day, it’s whatever’s best for our clients,” says Graves of the chance. “It wasn’t just about creating this business for the benefit of us, it was about creating this for the people that need access to this.” Then again, says Andy, “if we’re here in 20 years, we’re all happy.”
After all, they’ve already chosen the next 12 to 15 cities for expansion, says Reynolds, and somewhere within those cities, or the next few, will be international markets. As soon as he says that, the rest of the executive team breaks out in excited chatter. Before long, someone yells: “Conquer the world! On a covered wagon!”