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20 DISCUSSION OF FACTORS REQUIRED FOR SUCCESSFUL OPERATION OF AUCTION MARKETS The Hillsborough market has operated since 1941. Besides the longevity of the market, which has operated at an average volume of around 300 - 325 animal units per week, there is little evid.ence as to its profitability over that period. Given its longevity, one would have to assume that the market was at least earning its operating cost on its owners books. Under current cost conditions, it is unlikely that. a new market will make a positive profit because costs are higher now at average volumes. The only way. profits can be increased would be to increase the volume sold, or increase the tariff on each animal without losing volume. The major operating cost in any auction market is remunera- tion for labor. In this case labor exceeds 75% of total opera- ting cost. Cost savings may be possible in this area if some portion of labor time can be utilized in other income earning employment. The possibility of linking the auction market with a farmer's market /horse arena or other facility may provide oppurtunities for labor sharing. The salary of the manager is $20,000 in the budget ' above . This is probably too low to attract a person with the skills necessary to do the job. A major task of the manager will be to. first reestablish, and then increase, the volume of trade necessary for profitable operation, requiring good communication and negotiating skills. A salary scheme which gives incentive to increase volume would be the best alternative. A cost not accounted for in the operating budget is litiga- tion expense associated with prosecution of writers of bad checks, or the expense associated with credit searches. It is. unknown what these expenses might be. Certainly, they are worrisome to- every auction market operator and require the ability to make astute appraisal of character.