As most entrepreneurs soon find out, the cost of starting or expanding your small business can quickly escalate as you seek to equip your workforce, office, or other place of business with the tools needed to operate and grow.
While you may seek to roll these costs into a business loan and/or recover them at tax time through depreciation, neither of these actually reduces the upfront cost of procuring business assets or equipment in the first place.
An alternative, frequently used by non-profits but often overlooked by for-profit small business owners, is to buy surplus goods directly from the government.
What is Government Surplus?
Purchasing government surplus – which includes everything from computer equipment to medical tools, vehicles and parts, land and property, international real estate, and more – is an easy and affordable way to equip your new and expanding business.
Here’s how it works: When a federal or state agency has extra equipment, seized goods, or forecloses on a piece of property, it is either transferred to another government agency or sold to the public. Each year the federal government then sells billions of dollars of surplus, seized, forfeited and exchange/sale assets at or below cost or fair market value.
These goods are sold “as is” by auction or negotiated sale, either online, in-person or both.
Online government auctions work much the same way as other auction sites, such as EBay. You visit an agency’s auction site, register your name, and place your bid.
Where can I buy Government Surplus?
While each state government has its own individual online auction Web site (find your state’s auction site here), there is no comprehensive single online auction web site in the federal government.
Despite this, the best place to start your search for government surplus is GovSales.gov. Operated by USA.gov, GovSales.gov aims to provide a single listing of all surplus items and real estate for sale by the federal government – and combines online auction procurement tools with a more traditional non-transactional catalog of assets that can be procured by other means.
Certain federal agencies do enable the private sector to conduct business directly with them via their own auction sites, including General Services Administration (GSA) at gsaauctions.gov and the Department of Defense (DOD). Federal law enforcement agencies, such as the U.S. Marshals Service, also run auction sites for seized business property.
You can find a comprehensive list of all the federal government surplus goods and real estate auction sites on Business.gov here.
How do Government Auctions Work?
Government auctions tend to operate differently depending on what agency you are dealing with – some take place in person while others are transacted on the Internet. Sales can be proffered by sealed bid, spot bid, first-come first served in a fixed-price sale, or through negotiation (used frequently in real estate sales).
Be sure to do your homework before participating in or attending a government auction. Some companies often charge fees for information about government auctions – much of which is available for free from the government.