$800 million in Auctions

I had never heard of this company that you showed me, Heritage Auctions.

Yeah.

Um, I think that auctions, particularly marketplaces, I would love someone to criticize this because I want to hear the downsides. I think that they are potentially one of the top, like, 2 or 3 business models.

Uh, auctions?

Or, well, auctions and marketplaces.

Oh, marketplaces for sure. Yeah.

But auction-style marketplaces. I think they're one of the best.

Yeah, you've seen a bunch of them. Yeah, eBay being the sort of classic.

Yeah, and I think eBay sucks, by the way. There's— someone's totally going to crush them. I mean, they're going to be dead— not dead, but somebody told me this is half, half, half information.

Somebody told me eBay has had like a revival, and they don't do the auction stuff as much anymore. They're all like— it's basically Amazon-ish.

I fucking hate it. I hate it.

But somebody said that their numbers have turned around. I don't know if that's true.

Well, they're a behemoth. They're not going anywhere anytime soon. I mean, they're like Google, like You're like, oh, well, they're sucking. Like, okay. I mean, they're gonna last for another 50 years at least.

Yeah.

So anyway, um, I love auctions. Uh, I like— I— and I love niche auctions. Um, and Heritage, which you pointed out, they do that. Um, you, you got the— you got that pulled up, Henry? Uh, and you could pull it up on your phone. Um, so they did $800 million in sales. So it's not on the screen. Um, so let's look at their top categories. Do you have it on your phone?

Yeah, I still have it. So coins, I think, was their top, right?

Yeah. So they do, I think, $300 million in currency, right? Okay. But look at some of the more interesting ones. Movie posters, $10 million, $10 million in sales. What was comics? Comics is on there.

Yeah. Let me just pull it up.

What's it say for comics, Henry? Uh, $50 million. Comics, $50 million. Sports, $60 million. Sports, $60 million.

Sport collectibles, basically.

Mm-hmm. $300 million.

Luxury real estate, $19 million. Wine, $10 million.

Crazy, right?

Tons.

Crazy. And here's what I like about it.

This is a big idea. We talk a lot. In fact, I have a pet peeve. We talk a lot about these like small little business arbitrages, hacks, little businesses. This would be a big, big company if you could get this right.

And so what— so I love, I love marketplaces and I love auctions. I love auctions because there's a time component to it.

Yeah.

And that urgency makes you buy more. And what I think is even better— and so for Heritage Auctions, I think roughly half of their sales of $800 million sales are online and the other half are in person. You want to know another in-person auction that's doing wonderfully? Barrett-Jackson. Have you heard of Barrett-Jackson?

No.

So Barrett-Jackson is based in Arizona, bootstrapped, owned by one guy. Is that his name? Barrett— maybe Barrett is dead, Jackson is alive.

Okay.

Or it could be the other way around. One of them is dead. But what they do is they actually have a— they put this on TV all the time. I watch it all the time. What they do is sell cars, so classic cars, right? And not all classic cars, but just like rare or like interesting cars. You could buy like a $10,000 car there, but— so they'll have a car on and they'll say like, this Ferrari, there was only 500 of them, this, it sells for $200,000, and they show it, and you're like, oh awesome, that sale just happened in 3 minutes, that was great. And so they do, I believe, 68 shows a year, and they make hundreds of millions of dollars in revenue. It's a huge business, and I love that. And so another one is Bring a Trailer. They do cars as well, and the guy who started Bring a Trailer also started Mailbox. Uh, Gentry Underwood. So he's like a— which he sold to Dropbox, right? And so I like these auction places. And first of all, I like niche auctions, so I like watches, anything that's niche. But tell— but what do you— what is another— and I have one idea— what's a current marketplace that's very illiquid and hard to sell and you wish that it could go away faster?

Uh, houses is one. Luxury houses, which they put on here because it takes a while to sell a house. Um, in general. And so OpenDoor is trying to make that instant, uh, as a market, as a, uh, a real estate company, not, not as much as an auction. Um, I have a friend who did this with sneakers.

He, uh, people are doing that now. I think it's working well.

He did it as a 90-minute auction. So he would say the sneaker goes live, it's 90 minutes, and we're going to get you your guaranteed price. Um, uh, or we— they basically offer the seller, they're like, we will buy it at this price if the auction doesn't go higher. So if you agree to that, you start the process and it's 90 minutes.

What else?

Um, I don't know what else you got.

Small businesses.

Okay. Just flip my business.

And this is a maybe would just fall flat. This is one of those. It could be amazing or it would just be horribly idea. But if I were Quiet Light Brokerage who sponsors this, or if I were another brokerage, I would 100% have an event and try to gather 1,000 people and We're going to auction off these businesses.

My idea from yesterday, the first dibs where you're auctioning future, the future first, future first, whatever you're going to create. I think that would work really well with this as well. But businesses, the hard part is you have—

there's so many hard parts about it.

There's a lot of hard parts, but one is just the diligence, right? So like when I buy the, the movie poster or whatever, if it has sort of the certification and the person who's selling it sort of says this is authentic, I don't need to look too much more into it, whereas with a business, you really have to sort of understand all these different components. I think that's hard.

I agree it's hard, but I think it's interesting, right? Because like, if someone just— like, if I knew Shopify apps or something and there was this gathering and they're just auctioning off a shit ton of them, and it's kind of like a Storage War where it's like, which you're not sure what you're gonna get, but let's just find out. Like, it could be fun to gamble tens of thousands of dollars.

Yeah, just storage units. That would be interesting, like a mystery box basically that you're buying.

Well, fuck yeah, that would be really—

that would be really fun and interesting. It'd have to be cheap enough.

That's interesting. Is someone doing store— storage unit, like blind auctions? Yeah, yeah, surely they have to be, right?

I don't know, but you could tie some of these ideas together, right? So like what HQ showed where they did basically— they took a traditional TV show and turned into a live-streaming mobile app where the game shows on your phone. This is the future of TV. Like you can do a QVC or I don't know what show you talked about you watched the auctions on, but like you could—

that's Bear Jackson, but there's another one called—

you could turn these into mobile livestream shows and you could essentially sell these all through, through, um, you know, you could take— so one way to look at this—

Antiques Roadshow, that's what I was thinking about, right?

So one way to look at this is you, you start selling some item that's not currently sold on these auction places. Might be hard because a lot of time has passed and sort of like You know, the law of supply-demand has pulled things that want to be sold this way into the market, but maybe you can find a new niche, or you just take the existing platforms and you make them smaller, more lightweight, and mobile-focused. You just win that way. And so like, I don't know if you know Top Hatter.

Uh, yeah, what are they?

Top Hatter, incredible company. It's Wish. So it's a mobile app where you see a bunch of really cheap stuff from China, uh, random stuff. It can be like a back brace and a ring and a Um, you know, whatever, a poster, a shoe, dollar store crap, dollar store. Well, it's like the, it's like the Wish crap, which is like random electronics and memorabilia and items. Yeah. Laser pointers and class rings and like, you know, whatever. Um, but what they do is, which is interesting, is it's a, um, this, the item starts. So you open up the app and you see all these things and like, you've never seen your adrenaline spike like this in a mobile app before. All the prices are starting at like whatever, $50, and they just start dropping and then somebody just hits buy and then they buy it. And so you kind of want to wait to get it lower, but you don't want to wait too long because somebody else is going to buy it. So Top Hatter is a startup here in San Francisco and they do hundreds of millions of dollars of revenue. Very good, very interesting business. I don't know how profitable it is, how sticky it is, blah, blah, blah. But when you go into the app, it's like a—

it's like being in like this high stakes Chinese market, like those dollar auction, like those penny auctions things. It's a little bit like—

it's a little bit like that.

But they—

but you don't have to buy credits and stuff like that. It's more like Wish, but instead of— what they tap into is instead of browsing and picking, they pick— they, they like inject into your FOMO, you know, part of your brain. And so you're like, okay, this item, do I want it? Do I want it for $6, $5, $4, $3? I'll take it. And you end up buying a whole bunch of shit. And, uh, it's just a bunch of moms who are bored at home that are just shopping on this thing, and they feel like, hey, we're getting tons of value. But like, this is stuff you didn't even know you wanted. You don't even want—

it's just shit.

It's just shit.

And I'm going to download it and buy some stuff. I buy shit all the time. Top Hatter's cool.