Getting Started The best way to get started in government auctions is to go to government auctions. Find out where they are held. Typically, there is an inspection period. The U.S. Customs Service auction of carpets and rugs mentioned above was scheduled for 2 p.m. on a Sunday, but the ad stated that the goods would be available for inspection by 1 p.m. If you can, attend the inspection period. Look at each item as closely as possible. If there are "estimated" or 'appraised" values, disregard them. They're probably not meaningful. Instead, come up with your own ideas of what you think various items are worth. If you have a particular area of expertise, focus there. Then write down your estimates in a notebook. Your first time (perhaps your first few times at an auction), don't even expect to bid. Instead, check on the people there. See who the professionals are, the ones who bid to their limit and then drop out. Look at the amateurs too, the ones who just "have" to have a certain item, no matter how much it costs. You'll probably see some people get carried away with "auction fever" and wind up paying far too much. Once you've seen some people act this way, you'll know the kind of behavior you should avoid. At the same time, pay attention to the procedures at the auction. See how the items come up for bidding, how the auctioneer handles the bids, and what the winning bidders do after they've come out on top. Compare the winning bids with the numbers you've written in your notebook. Were your bids too high or too low? After a while you'll get an idea of what's realistic. Getting Serious After you have been to one (or two or three) auction(s) and you have a feel for the characters and the action, you can plan to attend for real. At this point, you need to approach the inspection more diligently. Do some research. If it's a vehicle sale, go to a car lot with comparable models. See what they're selling for. If it's office furniture, go to a used-furniture outlet. For art objects, go to museums and ask your library for reference materials. Before you go into an auction, select the items on which you wish to bid. Write down your maximum bid in your notebook. If you intend to resell the items, figure out the top price you can pay and still earn a decent profit on the turnaround. Whatever you do, don't go over that top bid -- and don't get caught up in auction fever. What if you spot a big-ticket item, a boat or luxury car you can't afford to purchase on your own? If you're sure that you know an item's true value, see if you can find some partners to pool money with you and share the profits. Getting Around Just because many of the examples in this book are from the New York Times, don't think that auctions are limited to big cities. No matter where you live, you're likely to find auction notices published regularly in your local newspaper. For example, a notice appeared in the New Jersey Herald, a newspaper serving Sussex County, a semi-rural area in the northwestern corner of the state, far from metro New York. the local of a local antique store had died several months earlier, and the store had not been opened since. No private sales had taken place. A toy store was about to move in, so the premises had to be cleared. Virtually everything in the store was to be auctioned off with no reserve and no buyer's premium, "bring your own chair." Quite a bit of furniture was up for sale, including mahogany and redwood pieces, lamps, assorted glassware and a turn-of-the-century "Road Wagon," purportedly made by Studebaker. No matter where you live, you probably can find an estate auction and perhaps a police or sheriff's auction. Buy Low, Sell High If you're buying for your own use, the auction is the end of the game. But if you're hoping to make a profit on resale, it's only the beginning. Now you have to find some way to sell your purchases -- at a profit. For small items, you might run garage sales or take a stall in a flea market. Larger items can be stored in your house while you advertise them for sale, perhaps in a local newspaper or through a computer bulletin board. Discount and secondhand stores may be good outlets, especially if you deal in large lots. Be creative. For example, consider the bankruptcy sale of 280,000 Russ Togs garments as described earlier. Naturally, the bankruptcy court wasn't going to sell this stuff one shirt at a time. Buyers had to buy relatively large lots. If you could have gotten some Russ Togs clothes at a good price, what would you have done? If you sold them to a store, you'd have had to settle for a price low enough to enable the retailer to make a profit, too. Instead, why not aim at the users? Go to a local high school or college; advertise in the school paper or post notices on bulletin boards. Students often are eager to buy name brands for below-retail prices. If you find some success, stay with it. Say you bought those Russ Togs clothes and disposed of them at a good profit. Now you have outlets for selling clothing. Check the ads for auctions to see when other lots of clothing will come up for sale. Above all, be patient and be prudent. Start slowly, buying and selling a little at a time. Learn from your mistakes -- everybody makes them. Once you get the hang of it, you'll find government auctions are an enjoyable and profitable way to shop. Keep Your Guard Up Auction Opportunities, mentioned above, warns buyers to beware of traveling auctions that breeze into town for a weekend and con the public with false or misleading advertising. If you buy something and you subsequently become unhappy, you can't complain, because the company has moved on. Typically, auction buyers are lured to hotels or warehouses by ads that promise bankruptcy and liquidation sales or items seized by U.S. Customs. (Remember, all U.S. Customs auctions are officially run by EG&G Dynatrend.) Indeed, this merchandise is often shoddy, sold for 10 times its true value. So be wary of such ads, especially if the goods are subject to reserves. Get the name and address of the auction company. Inspect all merchandise and get a good idea of the retail value before you buy. Yes, you can find great values at government auctions, but you need to know what you're doing, so do your homework before you do your bidding. To Learn More About Government Auctions Besides Auction Opportunities, mentioned above, the following are excellent sources of information: * The Official Government Auction Guide, by George Chelekis (Crown Publishers, $25). In addition to explanatory text, this book has extensive lists of federal agencies, state agencies, specialty auctioneers, etc. * Buying Real Estate Foreclosures, by Melissa S. Kollen (McGraw-Hill, $14.95). Dozens of sample forms and checklists help you find good deals in real estate. * How To Make Nothing But Money, by Dave Del Dotto (Warner Books, $11.95). Much of this book is devoted to buying at auction. It includes lists of government agencies and sample leases. * The National Auction Bulletin, 4419 West Tradewinds Ave., Fort Lauderdale FL 3308-4464; telephone 800 327-2049, produces Info Pak, which contains recent auction prices of vehicles, boats, and planes. * National Automobile Dealer Association (NADA), Used Car Guides, available at newsstands or by calling 800 544-6232. With these guides, you can check out car prices before bidding. * Worldwide Business Exchange, a monthly newsletter with hundreds upon hundreds of leads, contacts, sources, and resources every month. It is not an auction publication, but may help you sell what you buy at auction. It also covers business financing, channels of distribution, franchises, new products, finder's fees, mergers & acquisitions, venture capital, joint ventures, partnerships and more. A one year subscription is $48 from Phlander Company, Dept. 70197, P. O. Box 5385, Cleveland TN 37320. New subscribers can try it for 6 months for $27.