The most common type of auction sale is a public auction. As the
name suggests, these sales are open to the general public. Items
available for sale vary greatly--cars, real estate, furniture,
business equipment, restaurant equipment, antiques, collectibles,
tools, machinery, and anything else imaginable. Items being
auctioned can be supplied by private sellers, estates, businesses,
and trustees, or any combination of these supply sources. Auction
sales featuring household items are generally conducted on weekends
and evenings, when the largest number of the target audience is
available to attend. Business and bankruptcy sales are typically
held Monday through Friday during normal business hours.
Regardless of the type of auction you attend, you must plan and
think big. Make the experience worth your while in order to justify
your time and expenses. Buying an item for $20 and reselling it
later for $40 might be doubling your money, but if it was the only
item bought at the sale, a $20 gross profit hardly justifies the
time and expense. In fact, you would be losing money. Only attend
sales that have the potential to make you money. Buy items that are
$100, $1,000, and more, and look to double or triple these amounts
when reselling. Calculate your total fixed costs for the day
including an hourly rate for your time, and factor in your costs to
market and resell items. Chances are you will come up with a figure
in the range of $250, which means if you cannot earn $250 in gross
profit from the items you intend to purchase at the sale and then
resell, in all probability it would be best for you to skip the
sale. Depending on your overhead and other factors, the $250
minimum gross-profit base may be less or more; nonetheless, you
still need to know in advance how much profit you have to generate
from each sale before attending.
Resources
Police Auctions
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Police auctions represent an excellent opportunity to purchase a
wide variety of secondhand products at very low prices. Many police
forces in the United States and Canada host quarterly, semiannual,
or annual auction sales to sell stolen items they have recovered,
but were never claimed by owners (that is, the people the thieves
ripped off in the first place). At police auctions you will find a
vast array of products for sale, including bicycles, tools, car
parts, home electronics, computers, jewelry, and shoplifted
merchandise, much of it for a mere fraction of the original retail
value and current resale market value. There are several levels of
police forces--city, county, state, and federal.
So the best way to find out about police auctions in and beyond
your area is to log on to police websites, or call and ask who
conducts sales and how the organizer can be contacted. Most forces
hire auctioneers. As noted below, some are starting to utilize
online auction services to sell recovered property. Online or off,
police auctions are conducted in the same manner as any auction;
you bid on the items you wish to purchase, and, providing your bid
is the highest, you will get it. As always, preview items of
interest first, stick to your preset bid amounts, don't
impulse-buy, and have the right transportation.
Resource
Government Auctions
Government surplus and seized-items auctions and tender sales
are other excellent buying sources, especially for large-ticket
items that can often be purchased for 10 percent of their original
value, making them extremely profitable for resale purposes. Many
government agencies routinely hold auction sales or sealed-bid
tenders to dispose of government surplus assets and equipment,
foreclosed property, seized property, and unclaimed property. A few
of these agencies include:
- Internal Revenue Service (IRS)
- U.S. Department of Housing and Urban Development (HUD)
- U.S. Justice Department
- U.S. Marshals Service
- U.S. Postal Service
- U.S. Small Business
Administration (SBA)
- U.S. Treasury Department
There are many more government agencies at the federal, state,
county, and city level that also routinely hold auction sales to
dispose of surplus, foreclosed, and seized property. Most of these
sales are conducted like traditional auction sales, but sometimes
the sale is by sealed tender, which means you complete a tender
form and submit the amount you are willing to pay for a specific
item. Tenders are opened after the closing date and the item is
awarded to a bidder, mostly, but not always, the highest. Tender
forms are available directly from the government agency holding the
sale, or the auctioneer conducting the sale.
To find government auctions in your area, contact city, county,
and state offices to make inquiries and ask to be included on the
auction-sale notification and schedule list. Items routinely
auctioned include computers, real estate, automobiles, machinery
and tools, jewelry, furniture, electronics, and boats. Depending on
the agency and type of items auctioned, sales can be conducted
live, online, or both. Most are still live at present, but this is
rapidly changing because the internet offers exposure to a broader
audience of buyers.
Resources
Estate Sales
Estate sales can be conducted in a similar fashion to an
auction, as buyers bid on items live or by sealed bid to purchase
one or more items from the sale. Or the organizer of the estate
sale may elect to price items individually and hold the sale over a
number of days or weeks, until all or most items have been sold.
Estate sales can be organized and conducted by auctioneers, estate
sales specialists, family members, lawyers, or executors.
Regardless of who organizes the sale and how it is conducted, one
thing remains constant: Due to the need to settle accounts and
inheritances and to dispose of property, it is very possible to
purchase items at well below their true market value. Your ability
to buy cheaply will be enhanced further if you are prepared to
purchase more than one item, or even all of the items for sale.
Estate sales are typically advertised in the newspaper classifieds
and on websites, as well as in newsletters of companies that
organize such sales. To find these companies, search under Estate
Sales in your Yellow Pages directory.
Excerpted from 202 Things You Can Buy and Sell for Big Profitsfrom Entrepreneur Press
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