consignor rates

[topley]

Hi. selling my first yearling this year and I am in the process of selecting a consignor. Got the Fee schedule from one that I like but was surprised by the fees. Wondering if I could get everyone's opinion on whether this is standard or if there is some room for negotiation.

Commission Rates (Per Horse)
5% on the first $200,000
3% on amount over $200,000
*$1000 minimum on all sales
(*earned once horse arrives on sales grounds unless withdrawn by
Veterinary certificate)
Buy Backs
1 % of buy back price or $1,000 whichever is greater
$1000 minimum

Volume Discounts
Discounts and special rates are available to high volume and repeat customers.

Additional Costs
$100 daily rate at sales (includes night watching and pedigree research)
$125 daily rate at Saratoga (includes night watching and pedigree research)
$36 daily sales prep rate 60 days minimum ($50 per day for shorter period)

Halters, stall cards, veterinarian and vanning will be billed at
cost. Advertising will be billed on a pro-rata basis per horse.

If Necessary
Blacksmith at the sale $100
Veterinary opinion on repository x-rays $125
Veterinary opinion on scopes $75

[HR LLC]

Sounds like the going rate in todays world.

My first yearling sale was an utter failure. This business will make you grow up fast.

PM if you need any advice on what not to do. I made plenty of mistakes and I am willing to share my experience. Maybe it will help you avoid some potential pitfalls.

Good Luck

[FOS]

hi topley

Hi. selling my first yearling this year and I am in the process of selecting a consignor. Got the Fee schedule from one that I like but was surprised by the fees. Wondering if I could get everyone's opinion on whether this is standard or if there is some room for negotiation.

You can always discuss possibilities and/or be creative in your thinking. Doesn't mean an agent will ultimately agree with you, but you never know unless you try.

You might consider the following...

...for starters...you've mentioned a bunch of numbers etc that are probably a reasonable guideline...but I suggest, NOTHING is etched in stone.

Be confident (do your homework), and I suggest make sure that you're dealing with an agent that not only knows his/her stuff and has a reputation of integrity etc, but also gets a high percentage of real honest-to-goodness quality sales-results with the type/kind of horse that YOU intend to offer.

I submit the following tongue-in-cheek, but I suggest you might find, at the very least, some truth to it.

Arguably, many agents will talk-the-talk for months and weeks and days prior to a sale...but on the morning of the sale, that same yearling that the agent has (for months) seemed excited about; the same one that he/she led you to believe will sell for $60,000+- (or whatever), will miraculously be re-evaluated (by the agent) on the morning of sales-day and you might hear something like...you know your colt/filly hasn't had many (if any) second-looks...and/or, he/she hasn't been scoped...and/or, your yearling looks small compared to the others; if only he was 2 or 3 inches taller...or, he's light behind...or, his sire is very quiet...or, you know he's got that one small foot, and/or that funny knee...or, the economy's down...or, whatever other comments might fit the moment.

After all that doomsday-talk and your dream is fast deflating, you might sheepishly ask your agent 'what will my yearling bring TODAY if I really want to sell him?'

The agent might then tell you...well, I think if you reserve him at $14.9 sell at $15 there's a good chance he'll get sold.

Bottom line...be serious in selecting an agent, and be realistic in evaluating your horse...now, and at sales time. Find the agent that can BEST do the job for YOU with the yearling that YOU have. And remember, it costs an agent nothing to throw a number out (when supposedly appraising your horse) months prior to a sale (in hopes of adding your yearling to his/her consigmnet). Arguably, with most agents it's a numbers game...in your case though it's about one sales-yearling, and hopefully maximizing revenue for YOU.

I recommend, discuss your situation with a number of agents...scrutinize and be selective...then put together a short-list of those that you believe can best enhance YOUR chances for success. When you've got your quality short-list, I expect that everything else (commissions, costs etc) will fall into place.

Respectfully

[topley]

Hey guys. Thanks for the feedback.

My first yearling sale was an utter failure. This business will make you grow up fast.

Sorry to hear. I am starting to see that pretty quickly. Thanks for confirming the rates.

FOS,

Thanks for the advice. I appreciate you contibuting to this thread. I have followed your posts for awhile now and I respect your opinion.

Sound advice. I have already done much of what you suggested. I understand your points/concerns.

They consignor does have a track record of strong results. From what I can tell he seems to have integrity as well. He is not pumping me up by any means. He is giving me a conservative estimate on my yearling and advised me to strongly consider the fee schedule before making a final decision because he has put me in the under $20K category. So I will more than likely be paying the flat $1000 rather than 5%. This was what surprised me more than anything about the fee schedule. Thought its was 5% across the board was expecting the $1000 minimum.

I am fairly certain that, on paper, pre-sale, I am at the low end of his consignment. I think there are pros and cons to being in this position. Its nice to be in good company but I am concerned about the level of attention and focus. Again he has a strong reputation and seems nothing but professional but he is also human.

Should I have concerns about my position or is it like buying the worst house on the best street?

[austique]

Topley,

Just thought I'd link you this article I found...

http://www.bloodhorse.com/tradezone/pdf/tz_05-27-06.pdf

[CurrentlyRed]

Hope no one minds me resurrecting an old topic [I attached the original string below] with follow-up questions:

http://www.pedigreequery.com/forum/post ... ly&t=10541

BACKGROUND:
We decided to breed, then researched bloodlines, looked at hundreds of mares & eventually bought a couple who happened to be in foal. All the foals are on the ground this year & it is our goal to sell them at yearling sales or before. At least 2 of this year's 3 are very well conformed, but definitely not commercial enough for Kentucky; the third might be. We need help evaluating the correct sale for each & so have a short list of consignors we want to approach based on their sale results & what we saw of them at several sales we attended. We are in the Mid-Atlantic area.

Unfortunately, it's hard to evaluate someone who has more knowledge in an area than you do -- that's why it is so hard to pick a good doctor . . . if I knew enough to evaluate one, I'd be smart enough to diagnose myself!

ANYHOW . . .

1. How do YOU pick a consignor? Do you put all your horses with the same person? Do you pick a consignor for his or her strength at a particular sale or put broodmares with some & yearlings with others? How do you know who to trust? And what kinds of contracts are you expected to sign & what commissions can you expect to pay?

2. What is the average day rate for sales prep for yearlings? For weanlings? For broodmares? I'm trying to get a feel for the range of day rates & the number of days you all think the horse needs to be at the sales prep farm. And whether the location of the prep facility is important -- is there an advantage of sale prepping in Kentucky, for example, or would quality prep in a less expensive location be just as effective.

3. We're so new at this part -- what questions SHOULD I ask that aren't even on my radar screen, yet?

Thanks for any help -- feel free to PM, if you'd prefer that to posting.

Red

[CurrentlyRed]

Oops. Thought I was starting a new thread & just referring to this one by a link . . .

[Crystal]

Top, PM me about the rates.. Also you mentioned Saratoga sale.. Is your horse in NY already?

[clh]

I interviewed about five consignors - they came to my farm and looked at the foals. I had a list of questions that I asked each one and got their impressions on the foals. The went from sky high to rock bottom.

Having used numerous consignors in the sales (with and without partners) I suggest you find someone that you can work with and that you can trust. It helps if you can get a recommendation from someone who has dealt with them in the past. Honesty and telling it like it is was what we wanted - not someone blowing smoke up our rears to get our business. There are some very honest folks out there and some very shady ones. Just be very careful and do your homework. Stay involved in the entire process and I tried to find a cosignor that wasn't so large that my foals didn't get lost in the shuffle. I don't own Grade I winning mares

Good luck!

C

[CurrentlyRed]

I interviewed about five consignors - they came to my farm and looked at the foals. I had a list of questions that I asked each one and got their impressions on the foals.
. . . I tried to find a consignor that wasn't so large that my foals didn't get lost in the shuffle. I don't own Grade I winning mares

C

Exactly what I'm trying to do. The question is -- how? And price ranges, if you cant come up with a single figure. And other than gut reaction, any red flags on who you CAN and CAN'T trust?

Thanks for helping me figure this out!

[clh]

First off - when they were "willing" to come to OH to actually see my foals they got points. Some of the consignors I spoke with just wanted to send me their contracts without even seeing the foals/mares and me not being able to meet with them. Ummmmm - no If you can't make a 2 1/2 drive for the opportunity to represent my foals at the sales you really don't need the business nor do you want it. So those folks were crossed off my list. I wrote down their comments on each foal (and mare) and then wrote down their answers to my questions. Although their prices varied we didn't go with the cheapest one. I also researched prior sales results of each consignor. How many did they have in each sale, how did those sales go for them, did they have alot of RNA's, etc....how was their interaction with us? Although we've not had huge success at the sales in the past we believe we now have a relationship with a few consignors that we trust and that we are able to work with. It is not an easy process and it doesn't necessarily mean you must put all your eggs in one basket. If you are just starting out you might want to use two different consignors to see how you work with each one of them and how they relate to you at the sales. Even though we are small fish - it is important that when I go to the barn they at least know who the heck I am and what horse they are selling for me

Good luck. If you want to PM me I can give you the names of the consignors that I interviewed and who we used.

Where are you planning on selling?

[Cathy D]

In addition to the great suggestions from FOS, I would try to interview some clients, both past and present, that sold at the sales you are considering for your horses. This takes some work, but can be very enlightening. Another tool might be to look at the on-line Blood Horse stallion Register. In the sales data, you can see who is consigning as well as who is buying the offspring of the stallions or covering sires, and how they did with them at various sales.

My own preference is for the medium size consigner. With the large consignment, most of the attention is concentrated on the "hot" horses, the ones that everyone wants, the ones that are going to sell well anyway. Most horses are not the hot horse and need some help to sell their best. Ask the prospective agent what he/she has done at prior sales to help the average horses along. One local agent had them videotaped running in the paddocks, brought a laptop to the sale, and had CDs ready to distribute. I saw a lot of buyers reviewing the CD. Look for the consigner that knows the buyers and suggests horses that maybe the buyer overlooked.

I would definitely be concerned going in knowing I was on the low end of the consignment. Ideally, you would like to be in the top third of the sale. Did the agent suggest any alternate sales?

Good luck!

[Topsmeade]

Some very good advice on this thread. Those rates are pretty standard, you can get deals from smaller consignors, myself included. I assume you are looking at the Saratoga Select as not many at the Prefferred sell for over $200,000.

I used to sell my yearlings with a very good NY based consignor. I was talking to him about the progress of one of my colts when he told me he looked at him a couple days ago. I then asked if he thought the farm was doing a good job and what he thought of their new walker. (They didn’t have a walker) He went on about it and then when I pointed out he didn’t even act embarrassed. He later told me he didn’t get an important e-mail from me, even though he had actually replied to the e-mail.

What do you expect from the consignor- [b]To sell your horse for as much money as possible! [/b]

How is this done -?

1 You must show the horse in a professional manner, have him clean, posing, and walking well. This requires some one with a good eye and good vet knowledge to know if a horse needs some vet care on the sales grounds. My experience as a trainer definitely helped me in this regards.

2 Know the players. Definitely being an established name, a friendly face, a previous working relationship are all positives

3 Keep a list of everyone who has looked at each horse with contact info. Determining the reserve is the hardest part of any sale. If that horse doesn’t meet the reserve the consignor should be grabbing the guy who made the last live bid and seeing if you can strike a quick deal. If you go into the second day, you want a consignor who will work the phones and call everybody and anybody who wants to buy a horse.

4 Be an expert on the pedigree, especially any updates that have occurred between then and the catalogs publication.

5 Look Good.

I have had people happy with the job I have done and I have people unhappy. The unhappy ones are the ones I couldn’t sell.

I set my day rate based on feed and staffing costs. The day rate is just enough to cover that. I only make money on the commission. I had one client who was unhappy that I couldn’t get a horse sold and asked me to cut my day rate after the fact. I am already the lowest around and was unable to do so. After that experience I make a point explaining how I derive my day rate.

[clh]

Topsmeade - I for one would be very ticked off if my consignor bold-faced lied to me about seeing one of my foals and didn't

It sounds like you have a very good idea of what sellers are looking for in a consignor - someone they can trust, someone who can get the job done, placement in the book for their foals in the correct place (and not just getting them in the front of the sales if they don't belong) but if knowing if they don't sell who looked at them and then trying to sell them after they go through the ring!

It is always interesting to me that Keeneland for example charges me the same rate for my foals that they charge someone who is going to be getting seven figures for their foals. I'm thinking the sales companies needs to rethink the way they do business. For example - if they think the horses going in books 1- 3 are top of the crop they should be charged more than the ones selling in books 4-7. Why should those of us selling in book 4 pay the same price to Keeneland as the ones selling in Book 1? We certainly aren't having the same clients at the sales grounds looking at our mares/foals/weanlings. I for one have no problem paying a consignor's fees when I feel the consignor has done their job trying to sell my horse. Sometimes it works and sometimes it doesn't. If they are hussling and showing the horse and getting people to look at and have prepped it to the best of their ability - it is perhaps my fault for choosing a bad breeding, not having a decent mare and page, etc... Again, NOTE I said if the cosignor HAS DONE their job

[Topsmeade]

Thats partly why I'm a consignor now. The above mentioned consignor is actually very good except the fact that he lied. In fact he almost always got my horses sold, but who needs a B.S. artist.