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What Your Country Can Do for You:

Sourcing Products via Government Liquidation

FEATURED COMMENTARY

By Chris Malta
Home EBiz Product Sourcing Expert

In the search for cost effective suppliers for your eBiz, you may never have considered the U. S. government as a possible product source. But government auctions offer online sellers and small business owners a wide range of goods to enhance their regular product lines.

ocating REAL Government Liquidators
While a Google search for “government surplus” will bring back hundreds of thousands of results, you need to be careful from what sites you choose to purchase. Many of these surplus sellers are merely buying goods from real government liquidators, or from military surplus stores or outlets, and presenting themselves as “wholesalers” of government merchandise.

Look for sites with established reputations. Some sites, like GSAAuctions.gov, are run directly by federal agencies. “Other sites have contracts with different government departments, granting them exclusive rights to resell the goods that department no longer needs,” explains Tom Burton, COO of GovLiquidation.com. “For instance, we are the sole liquidation outlet for the Department of Defense.”

…Everything but the Kitchen Sink
The goods you can find on a government auction site are as diverse as the functions of government: textiles, clothing, electronics, and the list goes on. Whether you have your own web site or sell on a platform like eBay, you can most likely find products that complement your usual wares and appeal to your target audience. For example, if you sell camping gear, you can find a wealth of merchandise that you can use to create special promotions and bonuses, or package with your regular products to create unique, value-added bundles.

Most auction sites will post items several days before the bidding begins, and allow several additional days of bidding. You need to use this time to do your homework:

• Research the market for any items of interest, look at the demand and competition, and find out what kind of retail price you can realistically expect to charge.
• Study all the information the site provides about the lot. Most will show the condition, original acquisition price, and basic technical information, and post photos as well.
• For more detailed information on a specific product, you might also check out the product manufacturer’s web site.
• Find out what the shipping costs will be. Most sites won’t arrange shipping for you, but they’ll often provide you with several options for transporters they’ve worked with in the past. You need to contact each one to see who can give you the best deal, and with whom you feel most comfortable. (When you contact them, you need to give them the weight and cubic dimensions of the lot, so make sure to note those from the web site.)

Any reputable site will allow you to inspect the property when it’s posted, and during the time it’s up for auction. Particularly for big-ticket items, you might consider having a screener preview the lot on your behalf. Often the auction company can recommend local companies that offer this service.

The Price of Progress
Lots are generally sold for a small fraction of their original acquisition price – anywhere from six to ten percent, on average. That means you’re getting, in some cases, a ninety percent discount when you’re buying – and as every retailer and e-tailer knows, that’s when you make your money. Government auctions can’t provide a steady, consistent stream of like products to resell. But, as Burton points out, “They make an excellent source for loss leaders, cross-sellers, up-sellers, and promotional items that any online seller can use in their eBiz.”