May 2001
A Strategy for Success at the Del Mar Yearling Sale
by CLYDENE BOOTS
DEL MAR YEARLING SALE
In its ongoing efforts to assist breeders/consignors who are planning to sell their
stock at the 2001 Del Mar yearliing sale, the CTBA Sales Committee has decided to provide a set of guidelines for the event.
Here is the third of a series of articles that will be featured in California Thoroughbred in the few months leading up to the sale.
While this series of articles has focused on the Del Mar Yearling Sale, most of the information also applies to other sales, where the majority of Cal-bred youngsters will sell. Del Mar is a unique marketplace with a narrow base of buyers who are seeking a certain type of yearling. The summer yearling sales, Del Mar included, inherently have an element of the "beauty contest" about them, and horses selling there need to be very skillfully conditioned and prepared in order to be competitive.
Many high-quality yearlings will also be selling at Barretts yearling sale in the fall, including some who were just not the big, fancy early-maturing type sought by summer sale buyers. (Top runners do, after all, come in all sizes, shapes, and degrees of beauty.) Some will be selling at Barretts instead of Del Mar because their sellers preferred not to split their consignment, and some will because the sellers did want to split up their horses. And on some, the decision to sell was made after the Del Mar nominations were due. This level of Barretts yearling should also receive very careful sales prep in order to maximize its potential return.
Poorly-prepared yearlings are unwelcome at the sale, but will look especially out of place at Del Mar and may be scratched by the sales company. A booklet outlining sales prep procedures was sent out with the nomination forms-please contact the CTBA if you need additional copies.
Sales prep is something you may need to have done professionally if you lack the time, facilities or experience. Most places charge about the same as they charge for breaking, for full-scale sales prep is equally demanding. It will involve stall care, grooming and hoof care, an exercise program, practice in setting up and showing, and ideally some individual turnout time in a sale arena to maintain a good mental attitude. Expect to pay a minimum of $20 to $25 a day, with some places charging well over that. Most Del Mar yearlings will have been in sales prep for at least two months. Your agent can probably recommend several places that do a good job.
Choosing an Agent
If you are new to selling, it is better to have your horse with an agent than trying to handle it at the sale yourself, even if you are an experienced horse person. Even long-time market breeders will usually sell through an agent. The more potential your yearling has to bring a good price, the more important it is to have it with a highly-qualified agent who has the necessary experience and contacts.
Getting lined up with a compatible agent can be a challenge for the industry newcomer, for there is much variation in the services different agents provide and in the ways they operate. You'll want an agent who is:
1) Experienced and successful at selling the type of horse you are offering;
2) Has credibility with buyers and others in the industry;
3) Whose business practices and ethics are compatible with yours;
4) Who is willing to clearly and fully answer your questions;
5) Is someone with whom you feel comfortable, and in whom you have trust and confidence.
Even reputable agents vary in how they handle certain aspects of their job, so here are some things you should discuss with them to hopefully avoid unpleasant surprises or an unhappy experience.
Exactly what services will they provide, and exactly what will you be paying for those services? Most agents charge a day rate, and a five percent commission, with a set amount as a minimum commission, plus certain expenses such as the sale halter, advertising, etc. Some agents will try to set their day rate where it should cover expenses except those clearly incurred by the individual horse, such as the halter. If their expenses end up being higher than expected, they end up having to cover the difference.
Other agents will divide the final expenses among the horses in some fashion, and can only give a potential client an estimate of what the costs will be, based on prior experience. If costs run higher, the added expense will be borne by the clients.
The main thing is that you need to ask them about their method of allocating expenses and be comfortable with that method. Ask what kinds of expenses will be included and how detailed a breakdown you will be given. Will you just be paying for expenses involved in the sale of the horses, or also for things that benefit the agent but don't directly relate to the sale of these particular horses?
Another potential problem area is a seller's perhaps unrealistic expectation of the agent's ability to get someone to pay a good price for his horse. If the animal is a truly good one, there are likely to be a number of interested bidders and it will sell for near its value if the market is strong. But if the animal has weak areas, an agent loses credibility with buyers if he tries to persuade them the horse is of top quality when it is not. If a horse has little value in the eyes of buyers, there is not much an agent or sales company can do to persuade someone to buy it.
Setting a Reserve
This is an area where an experienced agent can help, but they need to understand your goals and your plans for the horse if it does not sell. Do you try to get every dollar possible and risk the likelihood that you'll take the horse back home? That may not be a problem if you can afford to race it yourself. But if you "must sell", usually the losses only increase by taking the horse home and putting it in a later sale.
If a roomful of knowledgeable buyers disagreed with your valuation of the horse first time around, and there were no extenuating circumstances such as an earthquake at the time your horse went through the ring, chances are the buyers won't like your horse much better the next time he sells. Remember that you'll still owe the commission to the sales company and your agent. Some agents do reduce their commission on "buybacks" but that would have to be previously specified in your contract with them, and most likely would require that the reserve be very reasonable.
An alternative is to put just enough of a reserve to get the bidding started. .
.making it appear that there are "live" bidders interested in the horse. Along those lines, if you are ever faced with selling a very low-end horse, one auction company suggested placing a reserve at the level of the minimum bid, as that allows the auctioneer to ask for a bid one step up and those are sometimes easier to get than a first bid at the minimum. Really, though, it makes little sense to take "thousand dollar" horses to a Thoroughbred sale where your costs will run to about that. You'd probably save money and sleep better if you found it a good home instead.
Reminders!
If your yearling is a colt, check right now to make sure both testicles are descended. If they aren't, you want to hold him for a later sale, giving him more time to mature, and/or consider castrating him if feasible. Many bidders are scared off by the unknown, and would more readily bid on a gelding than a colt whose undescended testicle might mean a need for expensive major surgery. Best to discuss the financial implications of this with your agent, too, if the colt has a stud quality pedigree. A sale is the worst possible time to discover something like this.
And, don't wait till the last minute to make shipping arrangements. Remember, that horses shipping across a state line will need health certificates to get across, in addition to the recent negative Coggins test required for all horses entered in a sale, or shipping interstate.
So, if you have questions about selling, even if they don't pertain specifically to the Del Mar sale, feel free to call the CTBA Sales Coordinator Cookie Hackworth at (626) 445-7800. For questions relating to
Barretts, call (909) 629-3099 and for American Equine Sales, contact Jimmy Fostinis at (510) 886-8234.
SPECIAL NOTE
The new date for the American Equine Sales yearling sale at Pleasanton is August 28. The closing date for entries is June 1.
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