Online surplus property auctions growing in popularity

Online auctions of surplus, impounded and confiscated assets provide county governments and agencies the ability to greatly increase the amount of funds returned to governments and ultimately to taxpayers by marketing these assets to a wider network of potential buyers.

Lincoln County, which began using GovDeals in April 2004, recently sold a surplus tub grinder for $65,000. The piece of equipment generated 147 bids.

In North Carolina, 350 government clients, including 71 counties, use GovDeals as one way to dispose of surplus property. Since 2003 almost $29 million worth of surplus property in North Carolina has been sold online on GovDeals, encompassing more than 34,000 items.

The rise and acceptance of online shopping, banking and other activities has made consumers more comfortable with conducting activities online. In years past, governments and agencies disposed of surplus, confiscated and impounded vehicles, equipment and other property through a local auction or sealed bid sale. Usually the people that purchased items in a local auction or sealed bid sale would be from the general area of the local auction. As a result, there would not be a lot of bidders, and sales results would typically be very low.

GovDeals allows governments and agencies the ability to reach a wider audience and thereby generate more money from the auction sale. Additionally, the security of online auction venues increases the transparency of the auction process and provides very sound auditing trails for items sold.

"GovDeals provides an opportunity for us to expose our surplus property to a much wider audience base via the Internet than we would be able to achieve locally," said Lincoln County Finance Officer Leon Harmon. "This translates to more dollars for our property and a faster sales cycle."

Through mid-August 2009, Lincoln County had sold 563 surplus items on GovDeals, garnering more than 5,800 bids and totaling more than $351,000.

Cabarrus County began using GovDeals in October 2006 to sell surplus property online. Through mid-August 2009, 222 surplus items were sold garnering over 6,600 bids and totaling more than $176,000. The county recently sold a 1989 John Deere 2155 Tractor for $9,001. The tractor generated 112 bids and went to a buyer in Florida.

"GovDeals has been an extremely helpful tool and saved us countless hours and lots of hassle in disposing of our surplus property," said Sherri Barnhardt, who works in the county's Finance Department.

Utilizing GovDeals also has other benefits. Assets can be sold as soon as they become available without having to wait for a local event to achieve a sale. Immediate sale of assets decreases storage requirements and also allows them to be sold without any further deterioration or depreciation, which could occur while being stored.

There are also environmental or "green" aspects to utilizing online sales. Vehicles and equipment that are awaiting sale in a local auction can leak oil and other fluids onto the ground, which could potentially put those fluids into local waterways and watersheds. Also, attendees of a local sale must drive to the facility, where they may or may not be a winning bidder, to purchase an item. This puts an incremental carbon load on the environment. In an online sale only the bidder who "wins" the sale will arrange for transportation of the item to their locale.

GovDeals (www.govdeals.com), a strategic partner of NCACC, is a full service online auction company that specializes in assisting governments in the sale of surplus equipment, impounded and forfeited vehicles, and other government assets. For more information, contact Rebecca Murphy at (980) 254-8908 or rmurphy@govdeals.com.