Looking for a car, desk, printer, vacuum cleaner, or bricks? Delaware may have a deal for you. Searching for antidotes to budget deficits, the state and two county governments are looking to cash in their surplus. Surplus items, that is. Selling outdated or unneeded vehicles, office furniture, computer hardware, and a variety of other things can add revenue to government coffers. And selling those items online can increase the return.
General Support Services in Delaware’s Office of Management and Budget gathers and disposes of the state’s surplus items. “If it has value and it is no longer necessary for the state, or we need to dispose of it, we'll do anything we can to find a way to recover some funds from it,” said General Support Services Director Dean Stotler.
In fiscal year 2010, the state earned $1.5 million from selling surplus items. In fiscal year 2009, the state brought in $2.7 million from surplus. Stotler admits those numbers are slightly skewed: In 2009, over $1 million came from the sale of one helicopter. In both years, Governor Markell’s directive to reduce the state vehicle fleet has resulted in greater sales of cars, vans, and other vehicles that tend to bring in more revenue. The state has decreased its fleet by about 1,000 vehicles.
Sale of larger items like vehicles is generally handled by auction, online or in-person The state uses usgovbid.com for its online auctions and Stotler says there is a measurable difference between what vehicles auctioned online bring compared to an in-person auction. "The vehicle resale is roughly 17% higher from the online auctions," he said.
And Stotler believes he understands why.
"For example, if we held in-person auctions with a large number of assets to be disposed of, historically speaking, we found that the resale value of items went down as the auctions continued. It seemed to tire out bidders. If we sell them in online auctions we are able to provide them bite size chunks of property to consider and we seem to get a better rate of return,” said Stotler.
What kind of surplus items are Sussex County, New Castle County and the State of Delaware selling online and in person? Take a look.
New Castle County went the online auction route in May and the results have exceeded County Executive Chris Coons limited expectations. The county has sold nearly $40,000 worth of surplus items through a website called govdeals.com.
"I am very pleased with the outcome,” said Coons. “In the context of a roughly $240 million budget, this amount of money is pretty modest. I think it shows the public that we are watching our pennies, that we are looking under every cushion for every bit of change and finding any new source of revenue we can."
The county’s Chief of Administrative Services, Yvonne Gordon, brought the idea of selling online to Coons. Her mantra: “If it’s not nailed down and it’s surplus, we’re selling it.”
Gordon says that online auctions broaden the market for surplus assests. “Things that we thought would never sell have sold,” said Gordon. She points to one of the county’s old police mobile units as a prime example. That unit was purchased by a sheriff’s department in Tennessee for $17,000. In that case, Gordon observed how the competitive nature of an online auction can goose the final sale price. “It’s very exciting to see the last few minutes, to see the strategies, how it can jump from $10,000 to $15,000 to $17,000 thousand in just 30 seconds."
Sussex County takes its surplus online this fall hoping to tap into that market. “It’s the next logical step,” said Frank Shade, Sussex County’s purchasing agent.
Shade is preparing to place several hundred items, including server racks, copiers, cell phones and old EMT gear up for auction on eBay starting in September. He chose eBay because Sussex County’s surplus pool does not include big ticket items like vehicles. “It seems like eBay now is a better fit. When we have something like a few cars, we send those through (government auction sites like govdeals.com),” said Shade.
Without bigger items to sell, Shade realizes Sussex County may not see the same level of revenue as others. “I don’t believe its going to be a huge revenue maker,” said Shade. “But whatever the value is, we’re going to put that back into our general fund.”
Revenue generation is not the only reason state and county governments are taking surplus sales online. Selling through an online surplus site is more cost efficient.
"Our cost is a 7.5% fee and that is taken out of the sale. There is no other cost involved. They are responsible for collecting the money, they mail us a check and arrange for the buyer to pick up the item from New Castle County,” said Gordon.
“The cost is minimal,” said Shade. “It’s cheaper than an auction house.”
Sussex County is struggling with a shrinking amount of storage space. County purchasing agent Frank Shade believes online surplus sales can help.
New Castle County also saves money through the streamlined online vehicle auction process. Taking vehicles to an in-person auction, Gordon says, the county had to “pay storage and the cost of employees to take and man the station at auction. Now we don’t do that. Now we take pictures, we put it online,” explains Gordon.
New Castle County is getting ready for another round of online surplus sales. Yvonne Gordon, the county’s Chief of Administrative Services, believes New Castle County has learned a way to improve their results of online surplus sales.
Not everyone has jumped on the surplus sale bandwagon. Kent County does not sell surplus items at all. The city of Wilmington currently limits sale of its surplus items to city employees through the city’s intranet system, though Mayor James Baker’s communication director, John Rago, says the city will eventually will open surplus sales to the general public.
For those already selling surplus online, the results to date have them looking to expand their efforts. In New Castle County, Coons says he is "more enthusiastic than ever about doing a top to bottom review of our physical assets that don’t mean anything to us and might be able to generate revenue.”
Government officials say they’re willing to sell anything they consider surplus. And they mean it. Delaware's General Support Services director Dean Stotler says the state is looking at selling food trap grease.