Making Money in Government Surplus – Buy Low and Sell High
Everybody knows that one of the absolute surest ways of making money in business is the “buy low and sell high” model. And, it goes without saying, the lower you can buy an item for, and the higher you can turn around and sell that same item for, the more money you’ll make. It is precisely for this reason that sourcing potential trade items from surplus providers is so attractive to so many. There are few, if any, other avenues that hold an equal potential to provide a buyer with lower priced, quality merchandise which can then be re-sold for higher profit margins than government surplus sources.
Through government surplus outlets and auctions, a buyer is able to locate all manner of various goods very inexpensively and re-sell those items at a substantial profits. Such cheaply sourced items can be re-sold easily, effectively and without much overhead, through on-line means such as eBay and other online auction services, flea markets, junk sales, Craigslist or print classified advertising, mail-order, liquidation centers, and more.
Sourcing merchandise intended for resale from government surplus sources offers very attractive profit potential because government surplus sources aren’t likely to be as concerned with obtaining the highest prices for their surplus merchandise as are private, commercial sellers. When it comes to government surplus sales — such as government surplus auctions, or government direct liquidation — the sales are being run and handled by government employees. This means, of course, that it wasn’t their personal money that was used to procure the items in the first place. It was tax-payer money. The sellers have no personal stake or financial investment in the sale of the items which they need to make certain they recoup. So, they are not strongly motivated to make sure that they obtain the best possible price on a sale. At least, they’re not nearly as motivated as a private seller would be — one who, if they are unable to obtain a good price for the item they have personal capital invested in, might not be able to provide for themselves or their families as well as they would have liked. The government employees overlooking the sale of the government surplus items you’re interested in purchasing are getting paid the same wage whether the item sells or not, and regardless of how much it sells for. Whether an item ends up being sold for one dollar or a million dollars, the people overseeing the sale make the same wage.
Now, many people that are inexperienced in the game of flipping goods obtained from government surplus sources are very often under the mistaken impression that government surplus really means military surplus. And, that most of the types of goods available have very specific military applications only and, thus, appeal only to a very specific and somewhat limited market, making the items obtained somewhat difficult to re-sell unless you already have avenues of distribution set-up within that market. This, however, is not the case at all. Military surplus actually only accounts for a small portion of the surplus merchandise that various government departments sell off practically every day. Most of the merchandise that makes up regular government surplus sales are items with very mundane, every-day, civilian usages.
At government surplus auctions and distributors it’s common to find things as ordinary and mundane as office furniture, consumer camera, photography and other types of audio-visual equipment, regular clothing, consumer computer equipment, various electrical and kitchen appliances, musical instruments, hand tools, exercise equipment, janitorial supplies and equipment, and much, much more.
Of course, with all the attraction that’s obviously inherent in exploiting government surplus sources in order to make money flipping surplus merchandise, there really doesn’t seem to be a lot of people actually doing it. And, one must wonder why this is. The reason is fairly straight forward, however. I explained above how the people who run these government surplus sales aren’t personally motivated to get the best prices for the items being sold. And, of course, for this exact same reason, these government surplus sales aren’t widely advertised. The truth is, most people just don’t know about these government surplus sales. The sellers aren’t personally motivated to publicize the sales in order to bring in the widest array of potential buyers and make sure the items are moved for the best possible prices. This is another reason why merchandise can be obtained at such great prices from government surplus sources — there’s less competition among buyers than there usually is at private sales, simply because less people are aware of them.
So, all you really need to do is find these under-publicized sales. Fortunately, we’ve published articles right here on SurplusBusiness.Com in the past that will explain to you the best methods of going about finding these sales. Check out just some of our articles listed below for more information:
So, these are the attractive advantages of government surplus when it comes to turning a profit by buying low and selling high: The sales tend to not be well publicized, which means less competition among buyers. Which, of course, means less demand and less buyers running up prices. Government surplus auctions tend to place items up for bid with either very low, or absolutely no reserve price. Coupled with the less than normal buying competition, this means that, often, even placing a ridiculously low-bid on an item can result in a winning bid.
Just recently, I was at a government surplus auction where a lot of antique shaving kits — never used and still in their original packaging — came up for auction. I know there’s a small, but fairly enthusiastic, collector’s market for such items. I estimated the re-sale value of the lot at around $500.00 But, since the market is so small, it probably would have been a hassle to move them quickly, if I won the bid.
In this particular case, it was a silent auction. In such an auction, you don’t get to know what other people have bid. You enter the most you’re willing to pay, and at the end of the day, the person who entered the highest amount wins the item for the amount they entered. Even though I knew the re-sale value was around $500.00, the reserve price placed on this particular item was set at only $25.00.
So, I thought, “What the hell!” I’ll put in the minimum bid. I don’t really want the hassle of trying to move the items in such a limited market — so, if I don’t win it, I won’t be all that disappointed. But, if I do somehow manage to win them for the minimum bid, I’ve pretty much got to go for it. If I don’t get it, I don’t get it. No big deal. I didn’t expect to win the bid. But, I did. As it turned out, nobody else even placed a bid on the item. And, as luck would have it, I actually did find a buyer fairly quickly and with relatively little hassle. I paid exactly $25.00 for the lot, and within two weeks I found a buyer and sold the entire lot for $380.00. A profit of $355.00. Not bad!