Fur Institute of Canada
Promoting the sustainable and wise use of Canada's fur resources

How Fur is Sold

The first international marketing for Canada's premier resource began in 1670 with the establishment of the Hudson's Bay Company. Today, sale by public auction is still the principal method of selling furs, with the majority of all wild furs being sold at one of two Canadian Auction Houses. This age-old tradition is a perfect model of market economy where supply and demand will establish the price levels for each fur type.

Most trappers deliver their harvest to an auction house on a consignment basis, to be included in the selection offered to buyers at auctions scheduled principally during the winter months. Upon arrival, each pelt is identified with a bar-coded computer tag that serves as a locator to ensure that each trapper or shipper is subsequently paid for their submitted pelts. A team of skilled fur technicians then begins the lengthy process of grading the fur pelts consigned to the auction according to colour, size, sex and quality.

The graded furs are then grouped into individual auction lots, receive a "lot" identification number and the "lots" are listed in the auction catalogue. A group of "lots" containing similar pelts are included in what is referred to as a "string". A representative sample of each lot or string is then displayed to buyers during the inspection period, which precedes the auction sale.

During inspection, which can last for 2 to 6 days depending on the size of the auction, fur buyers from around the world examine the samples and note their estimate of the relative value of each lot in their catalogue. Many buyers are professional fur brokers and will purchase goods for a number of manufacturers and retailers. Thus, most of them examine all the samples in order to bid effectively during the auction.

At the auction, buyers compete aggressively to fill their orders. Once the sale is over, the buyers have to pay for their purchases by a stipulated due date, called the "prompt date" (which is usually 10 working days after the sale) and give instructions to the auction to deliver the pelts, which can be almost anywhere in the world. The trappers and dealers who consign their fur to the auction receive a report on the auction sale and a cheque for their sold furs, minus the auction commission, and government levies, on the "prompt date".

The report records the price of each pelt, the lot number in which the pelt was included and the grade it received. By allowing individual trappers to include their pelts in a larger selection, the fur auction selling system grants them access to the world marketplace. This system means the offering becomes large enough to attract major fur buyers from around the world, which leads to higher prices for the producers than selling locally.