government auctions - Shopping with Uncle Sam - A Breakdown of Government Auctions
by Chris Malta
No doubt, you've heard about the amazing deals you can find at government auctions - the planes, trains, and automobiles your neighbor's uncle's cousin picked up for a song. But how true are these stories? Are government auctions really a good source for purchasing products for resale? The answer to that is they CAN BE, but to find those good deals, you have to understand what you are doing.
Where Do Government Auctions Get Their Products?
Government auctions are can be held online, live 'in-person' or by sealed-bid. They acquire their products from two main sources:
- 1. Goods they seized due to criminal activities or delinquent taxes.
2. Goods an agency of the government has but no longer needs.
Product Sourcing Tip 1: Research Before You Bid
If you source products through government auctions to resell online, make sure you know the market value of the product before you bid. The key to not overbidding is to research the items ahead of time. Most government auctions will publish a list of available items two to three weeks prior to the auction, which is when you need to start your homework.
Blue Books are a great source for researching product value. There are price guides out there for basically anything you are interested in. Some of the most popular ones are:
- • Automobiles - Kelley Blue Book (KBB.com )
• Electronics - Orion Blue Book (OrionBlueBook.com )
• Antiques - Kovels Antiques and Collectibles Price Guide (Kovels.com)
Once you figure out the market value of the items that interest you, just subtract the profit you hope to make.
The result is your top bid for the item. You absolutely need to know the maximum amount you are willing to bid on any item before you go to the auction or you may get caught up in the bidding and end up paying far more than the item is worth. Know your maximum bids, and stick to them.
The bottom line in capitalizing on government auctions is that you have to be prepared. Asserts Aronovich, "You make your money when you buy, not when you sell. If you take the time to study things out and know what you're doing, you can walk away with potentially a lot of room to profit."