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Making Money in Government Surplus – Buy Low and Sell High

Government Surplus Buy Low 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.

AGovernment Surplus - how to turn profitst 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:

What is a Police Auction? And, How to Find and Take Advantage of Them
Public Surplus Auctions – Exactly How To Find Them
Government Surplus Online Auctions

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.

Government Auctions - Strategy tipsIn 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!

Secrets of the Surplus Business Industry

Secrets of the Surplus Business Industry

Government departments as well as both private commercial and industrial businesses and corporations are currently going through what appears to be an almost unprecedented trend of laying off employees. That’s bad news. Every cloud, however, seems to indeed have a silver lining. As these business entities are liquidating worker positions, so are they liquidating their material assets. And, they’re doing this in the form of selling off their goods as surplus. This means, of course, that these government, commercial and industrial items are being sold off as surplus goods, quite literally, for pennies on the dollar.

The difficulty is that when such government and corporate entities engage in such surplus liquidation, they most often do so very discreetly. That means that such sales can be difficult to find and take part in. These companies are not keen to widely promote the fact that they’re cheaply selling off items they procured by mistake, items that they purchased which turned out to be useless to them, items that proved difficult to move through regular retail avenues, or that were returned to them by unhappy customers. And, most especially, they are not keen to advertise that they may be in somewhat of an undesirable financial predicament and are looking to move excess merchandise swiftly by selling it off at exceedingly low prices.

These surplus sources move their surplus merchandise by building and maintaining relationships with a small number of trusted and effective buyers that they know can move their excess stores quickly while generating the least amount of attention possible. They like to keep competition for their surplus sales very low. They want few buyers, but effective buyers. This way, they draw the least amount of attention away from their regular business dealings, while moving their excess product so they wont incur the expense of storage, destruction, or waste removal. And, for these reasons, the surplus industry is currently booming!

The surplus business industry is one of those unique business ventures that isn’t affected by the state of the economy the way other, more traditional sales businesses are. In fact, an economic down-turn usually results in something of a boon for those who make their living in the surplus trade. In such an economic climate, people with goods are willing to sell low. And, of course, people in need of goods are looking to buy low — even lower than they usually are. In such an economic environment, if you earn your money in the surplus industry, you can make purchases for even lower than the low prices normally found on surplus items because sellers are more desperate to turn excess material assets into liquid cash, and you can turn around and sell them quicker because there’s more people out there looking more stringently for bargain merchandise that can be obtained for less money than they can at standard retail costs. Buying surplus items and flipping them for profit is a business that is about as recession proof as businesses ever come.

Surplus Business IndustryWith all of that taken into consideration, it seems as though everybody would be jumping at the chance to get their hands into the surplus industry. However, only a very small amount of people seem to know anything about it. And, even fewer are actually involved. Why is this? The short answer is that surplus brokers — the ones who have truly found success in the industry — are exceedingly reluctant to tell anyone about it. More people — more buyers — equals more purchasing competition. That drives up bids and inflates prices that surplus merchandise ultimately end up being sold for. And, the whole shtick behind the surplus industry is under-market-value pricing. More buyers — more people who know about it — destroys the very essence of the business. So, those in the know are just not talking.

These are the real secrets of the surplus business industry. You can make good money operating as a surplus broker — you just need to know how to break into the industry.

As a quick example of how to turn surplus into a profitable side-business, let’s take the example of someone I know — my friend Roger. He’s a recently retired bus driver. After thirty years as a bus driver he retired with the intention of enjoying the rest of his life doing just about nothing. And, for a short while, he did just that. He quickly found, however, that he was becoming bored with that lifestyle. He enjoyed it for a while as a sort of extended vacation. But, he discovered that he is the type of person who, while he enjoys having a lot of leisure time, needs to do something — some sort of work — in order to feel fulfilled

He decided to start a business. But, he wanted something that would allow him a lot of leisure time, wasn’t stressful or taxing, and was something he actually enjoyed doing. After investigating a number of options, he became a rather small time surplus goods broker using an extremely simple business plan.

He simply began purchasing quality merchandise for pennies on the dollar from various surplus sources. He then rented a space at a local, but fairly large flea market that takes place on the weekends. He works only Sunday’s from 7 A.M. to 3 P.M. The flea market charges him $30.00 per weekend for his space, and $20.00 per week to store his goods in a secure storage locker on the premises. His total cost is $50.00 per week. And, on an average Sunday, he does about $400.00 in profit.

Now, $400.00 a week might not sound like big money to you. But, keep in mind, he’s loving what he’s doing. Other than one Sunday a week he completely makes his own hours. He has free leisure time 24 hours a day/ 6 days a week just about whenever he wants or needs it. And, an extra $400.00 per week is a pretty nice booster to the pension he’s already collecting. Roger doesn’t want to be, or need to be rich. He’s happy with just enough money that will allow him to live an enjoyable and comfortable retirement. And, his pension along with the extra money he’s earning by having fun in his part-time surplus buying and selling business is providing him just that. Roger is happy.

He spends a few hours during the week locating surplus auctions and sales and buying merchandise to sell at his flea market stand. He says he has great fun doing this. It’s exciting to him — hunting down bargains and snagging deals. He spends his Sundays selling what he’s acquired. He loves it. He gets to meet and talk with all sorts of interesting people and enjoys the thrill of the sale he engages in with them. He enjoys the friendly haggling. And, he enjoys going home at night with an extra $400.00 for his day’s pleasurable activities. And, of course, he enjoys the benefits realized by his reasonable supplement to his already reasonable pension that he earns for himself merely by engaging in efforts he finds fun and fulfilling.

army_shopSo, that’s a good example of how you could turn the buying and selling of surplus goods into a fulfilling and profitable side-business to earn extra money in your spare time. Or, you might be looking for something a lot more lucrative. That can be achieved as well. It’s all a matter of how much time and effort you’re willing to put in. Of course, if you just want to work Sundays selling your goods, and put a few short hours during the week finding and buying surplus merchandise, you shouldn’t expect to get rich doing it. You’re much, much more likely to achieve revenue about equal to what my friend Roger is achieving. And, perhaps that’s enough for you. Perhaps that’s all you’re looking for. But, if you’re willing to put in more time and work, you could achieve much more. If you’re looking to go into a full-time, 8-hours or more per day, 5-days or more per week endeavor, the sky really is the limit. Multimillionaires certainly have been made in the surplus business industry.

But, what will likely make your efforts much easier — no matter at what level you wish to engage in — is knowing the secrets of the surplus industry. And, the biggest secret is how to locate such surplus sales so that you can begin making purchases of quality goods for pennies on the dollar. This is usually the biggest stumbling block for people looking to get into this line of business. Because of the secrecy involved for reasons that were explained earlier, it can often be difficult if you don’t already know the ropes.

The easiest way is to employ the services of a surplus locating service. These services, such as the one located here, or the one available at this link, provide a service where they will keep you informed of all of the upcoming surplus sources available to you. You can provide them with your area and they will send notices to you whenever a surplus auction or some other such sale is scheduled to take place somewhere within the areas you’ve listed.

Secrets of the Surplus Business IndustryBut, if you don’t want to go that way, it’s going to take a little bit of detective work on your part. The surplus suppliers out there do want to keep bidding competition low in order to keep prices low and attract only the big players that they know will move the merchandise up for sale efficiently and with the least amount of fuss and noise as possible. So, the locations of these sales aren’t made widely known. You’ll have to track down auction houses in your area that handle such sales, contact government agencies that deal in surplus sales, and consistently hound them in order to stay informed of upcoming opportunities. It’s not easy — it’s work. Just like with everything that has the potential to earn you profits — you’ll have to work at it. But, it can be done. And, it can be both rewarding and supremely fulfilling.

Or, you can do what the pros do — what the big players do — invest just a little bit of money in order to make money, and employ the services of a competent locating service to do the dirty footwork for you.