Uncle Sam's sell-off: from Ferraris to Cottonelle
| EDISON, N.J.
Every few weeks, Uncle Sam cleans out his closet. He sorts through the pickup trucks, polishes the seized African wood statuary, and hangs out the sequined cotton separates from India that didn't meet the import quota.
Then he holds a giant tent sale.
And you're invited.
"I've been to government auctions from here to California," says Paul Cohen, who runs a New York-based sportswear company. "You never know what you can find," he says while ambling past display cases of Barbie dolls and faux leopard go-go boots at a recent auction preview here.
Indeed, nearly every day of the year, some federal, state, or local government is auctioning off goods it has seized or bought and no longer needs. These sales are good hunting grounds for the sharp-eyed consumer willing to sort through the mishmash of products.
This particular Treasury Department auction, held every few months some 25 miles southwest of New York City, offers one of the richest and most diverse veins of government goods. At the preview held last month in a cavernous government warehouse, would-be buyers squinted at boxes of Lo-Han-Kuo (a Chinese powdered beverage), considered the possibilities of 1,700 cartons of frozen Venezuelan cassava (FDA-approved), and eyed the toilet paper.
Yes, toilet paper.
"We usually buy directly from the manufacturer," says Garry Lytle, retail operations supervisor of a North Carolina discount chain.
But the lure of Lot #288 - some 38,000 rolls of Cottonelle - proved too great to pass up.
For individuals, the auction's cars and trucks are always big draws.
At this preview, Joseph Roy looked over a 1995 Toyota Land Cruiser and a white Land Rover from the Secret Service. Everyone ogled the red 1984 Ferrari convertible, seized by the Internal Revenue Service.
But the Ferrari illustrates one challenge of these auctions. The government doesn't guarantee the condition of its goods. "If we know of something [wrong], we'll put it out there for everyone to know about it," says Tim Minoughan, northeast sales manager for LLA Marketing Group, which handles the Edison auctions for the Treasury.
The Ferrari sports a sign in the windshield: "Vehicle starts but does not continue to run."
But bidders can't start up the cars themselves. If they get a real lemon, they have to complain to a government review board.
And how are the deals? It depends.
"People overbid," says John Gassoso, a New York jewelry manufacturer.
That's especially true with the cars, which often sell at book value or above because of their bad-boy cachet, Mr. Minoughan points out. "Everyone wants to come in and buy a drug dealer's car."
On the other hand, Hany Habib of New York City picked up a two-year-old Chevy van for $4,900.
Mr. Cohen says he once bought coats made of Japanese beaver for $300 apiece and resold them at three times that price.
The secret, bargain hunters say, is to research the value of what you're bidding for beforehand. Typically, government auctions preview the merchandise a few days before the sale.
Another pricing aid: The government lists winning bids from prior auctions.
Many federal agencies hold auctions, including the US Post Office (because people don't always pick up what they're sent), the Federal Deposit Insurance Corporation (which sells everything from houseboats to warehouses), and the Defense Department (look for office furniture, clothing, and, who knows, a $500 toaster?).
Even the Federal Reserve Bank, Housing and Urban Development Department, and the Small Business Administration get in on the act.
Consumers should also look for state and local government auctions, says Hans Anderson, founder and president of Government Auction Listings based in Missoula, Mont.
Consumers can watch local newspaper listings of such sales or log onto the Internet for lists of upcoming auctions. Mr. Anderson's service lists some 50 to 60 events across the country on a good day and "that's not even a fraction of what's really occurring," he adds.
So listen for the bang of Uncle Sam's gavel. He may be auctioning off a cool Chinese beverage or ("Unc" swears this is legit) boxes of interactive deer-hunting software.
(c) Copyright 1999. The Christian Science Publishing Society