A Short Introduction to Government Surplus Auctions

Government auctions are a huge business – one that the larger population doesn’t even know about. One might ask how this can be. After all, what does the government have that it would want to sell off? Well, the government has a LOT to sell off. What’s more, almost all of these items are sold at deep discounts!

Hard to believe, is it? Let’s briefly see how this is possible, before discovering the plethora of assets one can purchase from the government. The government owns massive amounts of assets for its own functioning. In addition to this, a large amount of goods and assets come under the possession of the government through various regulations and law. Examples include confiscation, absence of a legal heir of physical property and government possession.

In this article, the ‘government’ means all state and federal bodies at various levels: federal, state, district, county, city, town and school district. As one can imagine, all of these institutions and governing bodies must own a gigantic amount of assets. These assets become depreciated over time, or these institutions employ new systems in place which render the old ones expendable, or the government comes into ownership of a large amount of goods during purchase, and may subsequently deem the amounts purchased to be an excess. All of these reasons lend to the government wanting to dispense and dispose of large amounts of assets (these are both physical as well as intellectual).

The government is able to net the largest amount of internet sales in comparison to any other online business. Such volumes come from the diversity of merchandise / goods / assets that the government auctions off. Almost everything one can possibly imagine has been auctioned off by the government to interested buyers. The deep discounts are possible because the government merely wants to expend these goods, without the motive of making a profit on the sales. This means that buyers get prices that are actually below cost and sometimes below the fair market value. However, usually these goods / assets are priced at fair market values keeping in view depreciation and useful lives of these goods / assets. Nevertheless, substantial bargains can be found through government auctions if one knows the basics of taking part in one.

Usually, government auction websites, give tutorials to those interested in how to go about taking part in an online government surplus auction. If required by the user, the same tutorials are also given over the phone.

Before the outreach of the Internet had reached such a massive scale, government surplus auctions were limited in terms of the audience they were able to reach and consequently, the amount of revenue the government could generate out of their government surplus. This was because the sealed bid process (which was in place when Internet auctions were not common or widely known of amongst the target audience) was restrictive, not truly competitive and also costly. Technology and IT infrastructures have really catapulted government auctions to a position where they are an integral part of commerce of the country (more online sales than any commercial venture). This is because of the efficiency and time, labor and resultant cost saving that the online auction method provides.

Government surplus auctions that take place ‘online’ allow for a virtually unlimited number of potential bidders who are given the opportunity to bid on the items at their own convenience. Perhaps the greatest advantage of online government surplus auction websites, is the ability of the bidder to bid again. This is crucial to increasing competition and allowing for equilibrium to be set in the market as regards the goods / asset that are under consideration.

The biggest edge that online auctions have is the ability of bidders to ‘auto-bid’ to engage in automatic bidding. This method of bidding is different from regular bidding. In a regular bid, the bidder enters an exact amount that s/he wants to bid, and then the system is instructed to send only that amount as the bid. In this method of bidding, once a bidder has been outbid by another, the initial bidder has to re-enter a bid of a higher amount if s/he is still interested in acquiring the item available for purchase. In contrast, an automatic bid (also called a proxy bid), is a system whereby the bidder enters the maximum amount that they are willing to spend on the goods / items under consideration. In automatic bidding, the system will continue to bid for the bidder up to the maximum bid point. The advantage of such a system is that the bidder is not required to alter his or her bid every time they are outbid. This saves a lot of time and resources and is an efficient system. Automatic bidding is the most popular kind amongst various auction websites (including government surplus auction websites).

Another advantage of online auctions for government surplus is that bidders have the opportunity to bid again and again – as many times as they please. In the sealed bid system, this was not possible. The result being that the auction could not be as competitive as it had the potential to be, and with low revenues from auctions of surplus goods for the government. Now that government surplus auctions have become so competitive, the government can earn higher revenues for the same kinds and quantities of auctions as before – an example of how the Internet has truly revolutionized the way we do business. This added revenue for the government (even though, as explained earlier, the government does not carry out these auctions for a profit motive), helps in bridging the expenses of the government, and may even lead to useful tax breaks.

All that is needed to take part in this wonderfully productive, efficient and cost-saving method of buying almost anything (literally!) is to register with any auction website that deals with surplus government assets / goods’ auctions. There are a number of these, as mentioned previously, and each operates a large variety of items so each buyer (no matter how diverse their needs) can find what they are looking for – that too at a superb bargain.

Municibid.com, is a web based auction platform designed specifically for government entities to effectively facilitate the sale of surplus and no longer needed items for a low flat fee.
Municibid.com works just like the leading Internet auction sites, with several key differences to accommodate regulations most government entities are required to follow when putting items up for public bid.