Disposing of surplus property was always a standard procedure for the Oregon State Agency for Surplus Property. The state utilized sealed-bid auctions or traditional oral auctions to resell equipment, just as most other state surplus property agencies did. However, in September 2000, Oregon state officials decided to put technology to work and sell surplus property online using eBay. This innovative move soon proved successful as 7,873 items sold online in 2003 (including 1,806 vehicles) for $7.14 million - an increase in revenue, in some cases, of up to 230 percent compared to 2000, when the state was using traditional resale methods. So far, Oregon has sold 802 vehicles in 2004 for $3.12 million, with a projection of, again, more than 1,800 vehicles by the end of the year.
Oregon State is Largest Government Presence on eBay
Since going online with eBay four years ago, Oregon state has become the largest government presence on eBay, according to Nole Bullock, marketing coordinator for the state’s Agency for Surplus Property in Salem. “A survey commissioned by AutoDealerDaily rated Oregon #14 out of the top 100 Internet retailers (public and private) for online sales of used cars on or off eBay,” says Bullock. Approximately 400 intergovernmental partners utilize Oregon’s eBay program, including:
Oregon’s Surplus Property Program, which consists of a 76,000-square-foot warehouse on four acres, typically houses 100-200 vehicles and literally thousands of personal property items at any time. The surplus team includes 17 full-time employees, including a facility manager, business services manager, warehouse manager, four property specialists, three program representatives, two public service representatives, three administrative assistants, and two clerical positions. This staff number is actually down from the 23 full-time employees Oregon Surplus had in 2002 due to across-the-board state budget cuts.
“The business reorganization we had recently completed to accommodate the demands of e-commerce allowed us to withstand what could have been a devastating staff cut without negatively impacting services to our customers,” says Bullock. Vehicles remarketed by the agency typically include Jeep Grand Cherokees, Ford F-150 pickups, Ford Crown Victorias, and some mid-size sedans, such as the Stratus. According to Bullock, the state’s retired police cruisers (specifically wrecked ones), have increased in resale value the most through eBay sales. “Online buyers see a collection of re-usable parts,” he says. “We used to scramble to get $540 at a traditional auction for these vehicles. Now, we get up to $1,200 for the same thing.” Bullock pinpoints the success of online sales to the nature of the sale itself. “With traditional auctions, you have a lot of vehicles in one place all at once. This leads to market saturation,” he says. “Using eBay, we’re not suffering from devaluation of vehicles or market saturation. We’re not suffering from seasonal shifts either. We can market to anywhere on eBay, not just locally.” Oregon’s vehicle sales have increased each year they have used eBay, from 1,343 in 2000 and 1,686 in 2002 to 1,806 in 2003.
eBay Provides Increased Audience Exposure for the State of Oregon
Taking advantage of eBay’s market presence and instantaneous results provides access to 60 million eBay users and shortens the state’s sales cycle. “The larger audience has allowed us to surpass the traditional auction results we used to have,” says Bullock. “We also have a huge sales advantage using online resale. We don’t have the wait time we used to have.” Prior to using eBay, the surplus property agency held monthly auctions, alternating between sealed bids for industrial equipment and traditional auctions for vehicles and police property. After the awards were selected and mailed to the highest bidder, the sales cycle continued for another 6-10 weeks until completion. The agency’s sales lifecycle now has been cut to just two weeks. Bullock has also noted fewer complaints and surprises during inspections. “If you let a car sit too long, the vehicle will stop working,” he says. “Tires, batteries, etc., go bad, and the property is devaluing.” Bullock points out that the agency’s accountability, professionalism, and customer service has improved as a result of using online resale methods. “Exceptional response time is critical to keeping your online reputation intact,” says Bullock. “The world of Internet sales is all about your reputation.”
Oregon Did Not Rush the Decision to Use eBay Online Sales
Why did Oregon State wait until 2000 to sell surplus property using eBay? According to Bullock, until 2000, the system was just not ready for the surplus market. “Until about the end of 1998, eBay didn’t have a market for us; it was really for collectors before the late 90s,” he says. “Once we started selling on eBay, a commodity group of buyers was established.” Bullock also noted that using eBay makes more sense for Oregon state than other government entities because the state sells property from cities, counties, and special districts through intergovernmental agreements. These agreements began when the state engaged in intergovernmental partnerships more than two decades ago. Before setting up its eBay account, Oregon measured its own system’s compatibility with eBay. It also took into account that an increasing number of state and government agencies, such as the DMV, were becoming e-commerce-friendly. Upon deciding that using eBay made sense, Oregon’s surplus property agency faced the Herculean task of moving from traditional to online disposal.
“E-commerce is the easy part,” says Bullock. “The e-business to support it is the iceberg under the water line. We had to completely realign our business. We asked our employees to take on more responsibility and duties. It really takes a lot of cheerleading.” The state had to set up a merchant account and then dedicate brand managers for each eBay site, including:
Each brand manager films vehicles, checks records, and completes documentation. “We eventually centralized to deal with large fluctuation in property,” says Bullock. “It made for a smoother organization because communication, accounts payable, and accounts receivable were centralized. This allowed us to deal with larger volume.” While the Oregon’s Agency for Surplus Property has found success via eBay online sales, their effort to increase sales and become more streamlined never ends. “We’ll continue to find efficiencies along the way,” says Bullock.
