Opportunities for Revenue Generation through the sale of

Surplus Property

NAEP ConferenceWednesday, April 4th , 2012

Bo Solomon, University of Missouri Surplus Property

Opportunities

• Fund operations of Surplus sales by retaining a portion of sales

• Return excess revenue to departments• Support Sustainability efforts of your campus• Provide low-cost reuse of University assets to

departments at a fraction of new prices• Provide low-cost materials to your local

community

Business Policy manual• Sale Within the University• University Surplus Property shall offer surplus items to other departments/divisions

within the University, including other campuses where appropriate. Sale price shall be as agreed upon by University Surplus Property and the buying and selling departments.

• Sale Outside the University• NOTE: Any assets purchased with funds provided from external sponsors must follow

additional procedures discussed above in the section Disposal of Property Associated with External Sponsors.

• If no need exists in other departments or divisions, or other campuses as determined by University Surplus Property, the value of the item will be determined by University Surplus Property, and the property will be disposed of by the following methods:

• Items valued at less than $100 may be sold by University Surplus Property by direct sale, auction or sealed bids.

• Items valued at more than $100 will be sold by public auction or sealed bids unless the Chief Procurement Officer determines it is in the best interests of the University to sell by other methods.

http://www.surplus.missouri.edu/• Surplus Property • • Disbursement of Funds • If an item has a value of $50 or more as determined by University of Missouri

Procurement Services or the actual sale price, a portion of the funds may be returned to the campus department. In order for funds to be returned to the campus department a written request for the funds must be made at the time the item is declared surplus. The written request must include a PeopleSoft MoCode to be used for reimbursement purposes.

• If a department requests a portion of any income from sale of an asset be returned to the department, the sale price will be reduced by any costs associated with selling the item. Costs may include, but not limited to on-line auction fees, advertising costs, auctioneer costs, and labor costs, including fees for items which did not sell.

• For items with a value of $50 or more when reimbursement has been requested and a MoCode has been provided, University of Missouri Procurement Services will reimburse the originating campus department 65% of the sale price minus any fees.

• Items with an individual value of $49.99 or less will not be tracked and proceeds will not be returned to the campus department.

• The funds retained by Procurement Services are used to offset the operational costs of the program.

Obstacles

• Space• On campus location is best• Start up costs• Do you have someone already on payroll who

can take this on?• Obtaining surplus material from departments– It could be slow at first

University of Missouri4 campus operations self funded

• Columbia, Mo, main campus• UMSL, St. Louis• UMKC, Kansas City• MS&T, Rolla, Missouri Science and technology• Mt. Vernon Rehabilitation Center• Hospitals & clinics• Farms

Columbia, Mo

• UMC• 28,000 students• 100,000 Columbia residents• Established 1839• 280 Colleges• 71% of sales are from Columbia

Warehouse

Truck

Scrap Metal Bin

University of Missouri Kansas City

• UMKC• 13,433 students• 460,000 Kansas City residents• 125 Academic areas• 1929 University of Kansas City• 1963 becomes part of the University System• 8% of sales

Missouri Science & Technology

• MS&T• 7000 Students• 65 degree programs, 15 in Engineering• 19,559 Rolla residents• Founded 1870 as Missouri School of Mines• 1964 University of Missouri-Rolla• 2008 MS&T• 11% of sales

University of Missouri-St. Louis

• UMSL• 16,548 students, many commuter• 1960 Junior College• 1963 4-year University of Missouri System• 319,000 City Population• 2.8M St. Louis population• 39 schools• 10% of sales

Each operation is unique• Columbia: Monthly auctions held for the last

20 years. Warehouse location the same for 12+ years.

• MS&T: Smallest student and city population but good Engineering assets to sell. Leased warehouse, 38% increase this year.

• UMKC: Middle sized campus, large city, general study, 34% increase this year.

• UMSL: Middle sized campus, large city, commuter, 64% increase this year.

Challenges

• Columbia: must quickly move surplus, fills up too quickly.

• MS&T: 1 FT and student help, truck and liftgate, just off campus, must pay lease and utilities

• UMKC: 1 FT & 2 students, box truck, nicer warehouse, little research

• UMSL: 1 FT with a smaller van, less good stuff, little research

• Labor costs; we don’t subtract but could

General Accounting rules

• 65% of sales over $50.00 goes back to departments

• “Cost” of sales can be deducted• No paperwork = no money• Aggregate sales: 100 chairs @ $5.00 each is a

$500.00 sale, 65% returned• Assets valued $100.00+ must be sold high bid

to the public

Internal sales

• Departments get first choice of Surplus• Columbia: 3 weeks for departments, 1 week

auction• 7:30 – 4:30 M-F

• MS&T: meet with Surplus to see• UMSL: meet with Surplus to see• UMKC: meet with Surplus to see• How much am I saving departments?

Sales methods Columbia

• Monthly auctions on Wednesday, mid-month but not always 3rd (flexibility needed)

• 10,000 sq.ft. of surplus sold each month• Pull much of the best for on-line sales to make

more money• Leave enough of the best to keep resellers

coming back• Choice sale first then pallets sell

Sales methods MS&T, UMKC & UMSL

• Tag Sales, every 2 -4 weeks surplus $100.00- is sold walk in, pay, carry out. Sales help when enough surplus is received

• Is it worth $100.00+? On-line sell• General price guide for departments• New software for on-line bidding at the

monthly auction is being installed. UMSL, UMKC & MS&T will benefit.

Department Price guide• 1/10 – ¼ of new• Delivery is minimal and adjustable to

circumstance• Free table• Each campus adjusts based on comments and

sales• If it sells too fast, raise the price• If it sells too slow, lower the price

Accounting reconciliations

• Excel January 2012 auction• Giving departments money generates more

surplus!• “Why did you send me this money?”• Engineering funds student workers with surplus

sales.• $451,000.00+ back to departments FY2011.• Timely, monthly reconciliations are best

• No “where’s my money?”

Year sales

• $28,000.00 per auction is break even (Columbia)

• On-line sales are for all campuses• Registered buyers are increasing• Assets were decreasing, now increasing– Departments are still buying

FY 2012

• We are on track to sell $1.1M in Surplus this year

• 26.5% increase this year• Re-use is good; buyers think everything is a

good deal even if they pay new prices– Klunk Bicycles thoughts

Sustainability

• Landfill avoidance• Pallets• Tiger Treasures• Environmental studies students make good

Surplus student workers• Work study when available

Data Security

• Computers, copiers• Departments are responsible• Surplus spot-checks• Hard drive Shredding events• Copiers• Athletics phone story• CRT Monitors almost gone

Environmental Health & Safety

• CRT Monitors recycled through Dell• Freon & PPC• Sharps & hazards• Paint successful sales• Scrap bin EPA passes by us keeping freon &

PPCs out

Surplus Marketing

• No word of mouth, buyers want to keep “their secret” from others to keep prices low

• New attendees keep prices higher at auctions• 2 bidders can conspire, 3 make it harder• Scrap dealers will bid high to keep others from

coming back!• Computer sales increasing, flat panels are now

plentiful and work• Scrap metal prices are high, stainless, copper very

high

Old marketing

• Newspapers, who reads?• Mailings, we used to send hundreds with 20%

returned• No word of mouth, keep it a secret• “I don’t have email”

New Marketing

• Email lists• Cable Television ads• Facebook pages• Cross-marketing

• On line buyers learn about auctions when they pick up• Auction and tag sale buyers learn about On line sales• One campus’ buyer learns about other campus sales

Cable TV Ad

Results?

• Sales are up • Registered buyers highest ever (107/month)• New buyers at every auction• Younger buyers• More female buyers

Bulk or by the piece?

• Resellers like to buy by the pallet and is the quickest auction

• “Retail” buyers want to buy by the piece but slows the auction down

• Have a few by the piece then go to bulk, high per piece prices but still good pallet prices

Best sellers

• WWI Louis Vuitton Trunk for $5000.00• Medical equipment• Bleachers• Musical Instruments: Pipe organ, guitars,

timpani• Mail folder $20,000+• Donated Hummel Mugs $6000+• $50.00 Donated coins $1400.00

Summary

• Self-funding can occur but is not easy• How many students = how much to sell?• How much to sell = # of employees• How many employees are needed?• What sales methods are available to you?• What does your state allow?• How big is you potential buyer population?

Summary continued

• How do you get the word out?• New buyers are always needed to keep prices

high• A good, large location is needed• Keep your location constant• Regular times for sales• Cross-market: departments, on-line & on-site

sales

Questions?