Selling surplus is a snap on GovDeals

By Terry Bazzoon
GovDeals.com

One lot of 15 beige Kimball guest chairs sold for $80. Four other lots of the chairs sold for $55, $55, $48 and $47, respectively. NCACC gets online with GovDeals The NCACC has auctioned off its first items using GovDeals.com. The Association sold nine lots of unused office furniture in auctions that closed Oct. 4. All told, the NCACC sold 55 side chairs, 13 metal book cases and two metal file cabinets for $485, minus GovDeals’ 7.5 percent commission. According to NCACC Comptroller Scott Kauffman, the items had been collecting dust in storage for three to four years. After the Association no longer had use for the items, the vendor had offered to buy them back, but at a minimal price. “We’re paying a couple hundred dollars a month to store it and it would cost us a couple hundred to have someone come haul it off to the dump,” Kauffman said. “I can sell it on GovDeals, and even if I only get $50 for it, someone just paid us $50 for our trash.” Getting set up to sell on the site is a breeze. GovDeals representative Scott Starcher provided on-site setup assistance and training, and tips on selling items – such as that it is better to sell in bulk. Kauffman said the Association will soon have more items – cubicle walls, storage cabinets, and possibly computer equipment – up for auction. “It’s all driven by us – whatever we want to put up there,” he said.

Online auctions have changed the way local governments handle surplus vehicles, equipment and other assets. In the past, governments would accumulate property and equipment such as retired vehicles, computers, heavy equipment, seized and confiscated property and other assets and then conduct an auction on some regular basis or perhaps sell via sealed bid. These methods were necessary primarily due to the fact that local auctioneers did not want to hold an auction until enough items were accumulated to make it worth their while to conduct a sale.

Unfortunately that delay in selling property has a negative effect on the value of items due to depreciation, weathering, pilferage and vandalism and also requires significant storage space to accumulate assets. Local auctions also, by their nature, do not usually attract top values for assets due to the fact they typically attract “local bidders.”

The problem with this model of managing assets is that it is not designed with the needs of the local government in mind. An ideal scenario would be to use an asset until it reaches the end of its useful life and then immediately sell it for the highest possible price at the lowest cost to the government. Ideally the asset would also be sold in place without moving it or storing it, and the transaction would be dependent upon the buyer paying quickly with certified funds and picking the asset up at their expense.

Online auctions allow this very process to occur. GovDeals pioneered online auction services focused solely on governments six years ago and recently celebrated its 1,400th client nationwide. In North Carolina, GovDeals is used by 219 different governments and agencies, including 53 different counties, numerous cities, utility districts, school systems, law enforcement and other governmental agencies. GovDeals is endorsed by the N.C. Association of County Commissioners and the N.C. League of Municipalities.

The way GovDeals works is quite simple – GovDeals provides a framework where a government client can list assets for sale, including descriptions, photographs and other details necessary to communicate the particulars of the asset to potential bidders/buyers. Items can be sold as soon as they become available, eliminating storage issues and the cumulative depreciation of assets. Items such as Crown Victorias sell in as little as five to seven days while assets such as heavy equipment will typically sell in 14 days. More specialized assets might require a 30-day auction to allow targeted marketing time to attract bidders.

GovDeals provides a large database of pre-screened and qualified bidders and support in the form of marketing, advertising, public relations, training and ongoing technical support. All support functions are provided at no charge. Sellers pay one simple fee of 7.5 percent to sell on GovDeals as opposed to 10 percent (or more) in seller’s commissions and/or a 10 percent buyer’s premium in a typical local auction.

Decisions about how long to list an asset, if and when to use a reserve bid strategy and other auction details can be made in conference with GovDeals employees, which include professionals with backgrounds as varied as former government employees, purchasing professionals, sales and marketing professionals, technology professionals and even a licensed auctioneer and appraiser.

About the author: Terry Bazzoon is a licensed auctioneer and appraiser and has more than 20 years experience in strategic marketing and auction marketing. He can be reached at (865) 406-3783 or at tbazzoon@govdeals.com.