Local governments turn surplus items into cash through online auction site
By News-Argus Staff
Published in News on May 29, 2006 1:47 PM
Some local governments are finding that one person's trash can be another person's treasure -- literally. Municipalities and county governments are turning to GovDeals.com, an online auction site that facilitates the sale of government surplus items nationwide.
Wayne County has raised about $330,000 in the past three years by selling surplus items on GovDeals.com. Goldsboro, Mount Olive and Duplin County governments are using the Web site hoping to join in the county's success.
The Web site works as an eBay for government offices, Wayne County Finance Director Norman Ricks said. Any person can join GovDeals.com and buy vehicles, computers, cell phones and many other items, but governments are the only entities that can sell items through the Web site.
"You don't have to worry about a governmental entity being a good seller," said Tom Clark, vice president of client services for GovDeals.
The first item sold by Wayne County on GovDeals.com was a 1995 Chevrolet Caprice on June 23, 2003. The opening bid placed by the county was $250 and the car sold for $2,201 after 47 bids.
The most recent item sold by the county was a 2000 Ford Crown Victoria on April 18 for about $2,460, which had a starting bid of $300.
In between those two sales, the county has accumulated more than $329,000 in sales using the Web site. In the last fiscal year alone, the county sold about $94,000 in vehicles, computers and equipment.
In most sales, the county has at least doubled its profit from the starting bid, while others have made a larger profit for the county. In August 2004, the county sold two roll-off truck and hoist vehicles both with a starting bid of $700. After more than 120 bids for each vehicle, one sold for about $25,600. The other sold for $34,000, which is about 48 times more than the starting bid.
It is sales like these that keep Wayne County Finance Director Norman Ricks and his staff elated with using the Web site.
"We've been excited about this from day one. We can get much higher prices with this than the traditional process," Ricks said.
Prior to using GovDeals.com, Ricks said the county would move any surplus items to an inventory warehouse. The items would sit until it could be sold at an annual auction.
County employees would be paid to transport the items to the warehouse before the auction and wait for buyers to pick up their equipment afterwards, Ricks said.
"Now, we leave an item where it is, sell it and they come and pick it up," he said.
The Internet provides a more visible space to governments looking to make a sale, Clark said.
"They will typically sell for more than they would at a local auction because we've got a lot more bidders," he said. "Things that maybe you or I wouldn't walk across the street for, somebody can't live without. It's amazing to see what some people will pay for something other people classify as junk."
Ricks said the process saves unnecessary employee work hours and taxpayers' money.
The county sells items by filling out a form of an item with a starting bid, Wayne County Purchasing Fixed Assets Manager Noelle Woods said.
GovDeals charges no fee to list items, and makes a 7.5 percent commission when items are sold, Clark said.
Each item is photographed and county officials place it on GovDeals.com based upon the time they believe the county can get the best price for the item. For example, most items are placed on the Web site for 10 days, but vehicles are placed on GovDeals.com for two weeks to allow more time for bidders, Mrs. Woods said.
Once an item is placed for auction of the Web site, Ricks said the market and demand determine what that item will sell for.
Once the county receives payment either through certified check, money order or cash, a bidder can pick it up from the county during weekday work hours, Ricks said.
Based in Montgomery, Ala., GovDeals held its first auction in April 2001. Now, about 800 government entities sell surplus items through the Web site.
"We've been very fortunate to have great clients and great bidders. We're bringing them together," said Clark.
Although the town of Mount Olive hasn't been using GovDeals as long as Wayne County, it has also found success through the Web site.
"In the last 60 days, on GovDeals, we've moved $28,000," he said.
The amount includes an old, unused firetruck at the airport and a backhoe that sold for $12,000, Brown said.
"The firetruck, we sold for $1,500," Brown said. "We had been offered $300 for it."
Brown said many of the items for sale on GovDeals would have been thrown away otherwise.
"We sold a box of pagers that had been surplused by the fire department. Literally a cardboard box on their way to the dumpster."
Brown said a fire department in Iowa bought the box for parts for $650.
"We're big fans of GovDeals," he said.
In March, Duplin County began listing items on GovDeals, including police vehicles, office furniture and election equipment. The early returns are good.
"In my opinion, it's been very successful for Duplin County," said Teresa Lanier, county finance officer. "It opens it up to a wider market for bidding. Overall, we've gotten better return on that online auction than we would normally get at a sale just around here."
Mrs. Lanier said she spoke with Ricks before deciding to register Duplin County with the site.
"He said he loved it. He said it had been very beneficial and 'I don't believe you'll be disappointed in it,'" Mrs. Lanier said Ricks told her. "And we haven't been."