Want to buy a brothel?

Port of Call is the sole brothel in Karratha, a town on the edge of Western Australia's Pilbara, the centre of the iron ore mining industry. Workers earn up to $140,000 a year exclusive of food and accommodation costs, which their companies pay for, and men out number women by five to one.

The Australian Financial Review reports (paywalled) that "Vicki", who owns the business, is keen to return to Perth after seven years in Karratha and consequently wishes to sell. According to the report:

On the weekend, over 40 clients per night can pass the doors at Port of Call, making the business extremely profitable. "It can be lucrative but it's also fun," Vicki said. "You don't know what's going to happen every night."

With the nearest competition 24o kilometres away in Port Hedland [no pun intended] Vicki could probably charge what she liked for services and still be turning customers away, but she has chosen not to.

"We're actually one of the cheapest [brothels in WA]," she said.

"I don't like ripping people off. I'd rather the clients tell their friends and come back."

For anyone here looking for a change of lifestyle and with a lazy half a million dollars, the opportunity beckons.

Well I've got no money, but if anyone's looking to invest I can bring my other qualities to the enterprise. Sounds like a nice little earner.

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Which other qualities? By your own self-admission, you're useless...

And it does look like a nice little earner but I'd like to see the P&L accounts. Workers getting fairly wealthy is fine but margins are what matters...

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Management, I was thinking of.

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Quote:

I'd like to see the P&L accounts. Workers getting fairly wealthy is fine but margins are what matters...

Most legal brothels here, and according to the report, Port of Call is no exception, are in effect franchisors, which provide a stable revenue source without having to manage staff. The business owner provides premises, ambiance, essential supplies and promotion services, and sets prices. Girls (and occasionally men) effectively operate their own small businesses, and pay a time-based franchise fee. Most of the ones in Karratha, like the men who work there, are fly-in, fly-out. (The local airport is the second busiest in Western Australia.)

IIRC the mine workers work shifts that are 14 days on site, seven days off, so a brothel provides a handy opportunity to limber up at the end of a shift, before returning to their significant other.

I have no doubt that prostitution is profiteable in mining boom towns. Always was, always will be. It's like ports and seamen...

But if it is operating like a hotel, with added security service to be provided paid for by a little bit of a bigger room fee, it's likely to be a bit... tame in terms of returns...

As with every business, you want to create some sustainable competitive advantage - Controlling something that cannot be replicated easily. Since prostitution is legal in Australia, controlling the prostitutes is near impossible - Any of them with 2 brain cells must know mining areas will be good business and thus should be rushing there anyhow. Controlling the clients is the other possibility but, if it is a normal redlight district, they're probably cruising the whole sector... Controlling the real estate is the most obvious but it probably works better in something like Amsterdam with a tightly limited zone where prostitution is permissible than in a mining boomtown where you might move the hotel anywhere. Controlling the airline (if the girls/toyboys don't stay) is another possibility.

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Quote:

if it is a normal redlight district, they're probably cruising the whole sector...

As I previously observed, it's the only brothel within 240 kilometres. Furthermore, if you were an effective owner, you would realise that the sex workers are your customers, not the miners. If you treat them well, provide enjoyable working conditions and promote the business effectively, competitors will find it difficult to set up against you.

If you misunderstand who your customer is you can get into deep strife. Some executives I once worked with took on the management of a private hospital company and made the mistake of assuming that the patients were their customers.

It did not end well.

Originally Posted by roadkill

As I previously observed, it's the only brothel within 240 kilometres.

Which doesn't mean no one else could set one up...

Quote:

Furthermore, if you were an effective owner, you would realise that the sex workers are your customers, not the miners. If you treat them well, provide enjoyable working conditions and promote the business effectively, competitors will find it difficult to set up against you.

... and keep my prices reasonable, yeah, I understand. That's the rub. They're the customers and they can move at will. They're the ones with a competitive advantage, not me and unless I can turn the situation around by controlling either them (legally) or the miners (same) or control access in one way or another, the business will be a fine little affair but no different from, say, an automated launderette or a pub or somesuch. It's fine but it's not going to be great...

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