Gone are the days when visiting dusty warehouses and digging through bins of junk were the only ways to buy bargains from the government. Now a number of government agencies have gone high tech and are using Web sites like eBay (Nasdaq: EBAY) to auction off surplus property, ranging from jalopies to jewelry.
About 12 government entities list regularly on eBay, according to Don Coy, eBay’s senior manager of business development. Additionally, Coy told the E-Commerce Times that more government agencies are testing the online auction waters — sometimes posting their listings anonymously.
Government entities are turning to eBay, according to Coy, because it is “cheaper to sell on eBay” than to host offline auctions or sales, and because items sold through eBay command higher prices.
The Auction State
State government agencies in Oregon have plunged headfirst into online auctioneering. The Oregon Division of Administrative Services (DAS), which manages auctions for 180 government agencies, said that it takes in US$125,000 per week in gross sales through eBay auctions.
The DAS got interested in eBay in 1998, according to Nole Bullock, coordinator for online sales, after “some people in the office were playing around with eBay” and realized how much money they were getting for their unwanted stuff.
In December 1998, Oregon tested the eBay waters by listing a few small items, such as jewelry. After a 14-week trial, the DAS decided the pilot program was successful enough to continue, and Oregon extended its eBay sales program.
Official Garage Sale
By June 1999, there were two full time employees dedicated to managing the state’s online sales activities. The DAS currently lists 20 to 25 automobiles per week on eBay and approximately 70 smaller items.
Bullock likened his office to a giant consignment sale. Because the lion’s share of the proceeds are returned to the originating agency, Bullock said the DAS is “highly motivated” to manage sales in the most efficient way possible.
Current items offered at eBay by the state of Oregon — whose usernames include OregonTrail2000, Oregonmotors2000, Oregonprime2000 and Oregonsurplus2000 — include lawn ornaments and jewelry seized by the police, a 1977 dump truck and a vintage Hohner harmonica. Consumers can also access Oregon state auctions through OregonSurplus.com.
The decision to turn to eBay made “good business sense, so we moved forward with it,” Bullock said. However, he acknowledged that eBay might not work for those government agencies that are mired in red tape.
Seven months ago, the U.S. Postal Service (USPS) began a multiphase test to sell the contents of undeliverable and unreturnable packages through eBay.
O’Dette Horne, manager of the mail recovery program, told the E-Commerce Times that the test came about because a lot of consumers who did not live near the USPS’s three mail recovery centers where regular auctions of undeliverable property are held — St. Paul, Minnesota; Atlanta, Georgia; and San Francisco, California — felt shortchanged.
Packages are only auctioned off if the USPS has failed to track down either the addressee or the sender and has held the package for the required period of time, Horne said. Proceeds from the sale of undeliverable packages are used to fund the mail recovery program’s other efforts.
Horne said that the number of items listed on eBay by the USPS varied from week to week. As of Thursday, the USPS had over 100 eBay listings, ranging from copies of the movie “My Dog Skip” to an inflatable sleeping bag.
There is less impulse buying at eBay than at traditional government auctions, Horne noted. She added that eBay buyers are more focused than visitors to traditional government auctions are, because they can search by keyword and do not have to walk through aisles of merchandise.
The relative lack of impulse purchases means that some categories that do well at traditional auctions are not doing as well at eBay. For instance, Horne said that the USPS sells hundreds of T-shirts at offline auctions, but few sell when listed at eBay.
Categories that are doing well online, according to Horne, are collectibles, music and books.
Only a Test
Horne emphasized that the postal service’s eBay sales are only a test, and that the USPS had not yet made a decision about whether the program will be continued. However, eBay’s Coy said that informal feedback from the USPS has been positive.
Since its eBay sales program is still in testing, USPS merchandise at eBay can only be found by consumers who are either lucky enough to stumble on a sale or who know the user names used by the USPS: usps-mrc-everythingelse, usps-mrc-collectibles, usps-mrc-movies, usps-mrc-music and usps-mrc-books.