Millionaires down on their luck now have a place to sell their mega-yachts, super-cars and family jewels without having to resort to the pawn shop.
An Internet auction site devoted to millionaires launches officially on Monday and is likely to profit from the worst recession in decades, which has extended its reach to the rich and famous in the United States, BillionaireXchange said.
The company said it has already played a role in the sale or exchange of more than $180 million in assets during a 10-month test phase, and has noticed a trend of distressed transactions from U.S. clients.
I would say that in the United States market that's probably the majority of the types of the transactions that we're seeing right now, Quintin Thompson, co-founder and executive partner of BillionaireXchange, told Reuters.
Because of the current economic conditions in the U.S. we're seeing a lot of people who need to actually trade out or trade down from some of their luxury items and facilitate that transaction somewhere discreetly and privately so that they don't have to deal with the shame and or embarrassment of downgrade.
The company said its website aims to exploit a market niche between internet sales sites such as eBay, which are available to the general public, and auction houses such as Sotheby's and Christie's for fine art and collectibles.
Given the nature and price of items auction houses come to mind as potential competitors. But BillionaireXchange's completely on-line model, is likely to be a key difference.
The site facilitates sales and trades of everything from arts and antiques to commercial properties, businesses and foreclosed homes.
Above all else, it aims for privacy and exclusivity, requiring of prospective members a minimum of $2 million in verifiable net worth.
BillionaireXchange will charge sellers a fee of five percent of the sales and said it would have generated approximately $8.75 million in revenue had those fees been charged during the test phase.
The Miami-based company set high financial qualifications to make sure bidding for the high-priced items would be taken seriously, according to Thompson.
He said the firm counts among its clients professional athletes and A-list actors. Overall, the five-member firm claims more than 26,000 multi-millionaires as well as nearly a dozen billionaires as its members.
(Reporting by Burton Frierson)