Turning Hubble rubble into gold

March 25, 2005

Web-based auctions are helping cash-strapped US universities find global customers for even the most outlandish surplus goods, reports Stephen Phillips

Pedal-powered submarines, a rat guillotine, parts from Nasa's Hubble space telescope, one of those tractors you see towing jets around on runways, a stuffed bison and a laser powerful enough to cut an aeroplane in half aren't the kind of items you'd expect to go under the hammer at Sotheby's.

But all these items and more have gone up for grabs in recent US university surplus sales.

"You can't imagine the things we get," says Tim Sell, business manager of the University of Wisconsin's surplus operations. "I have a human skull in my office."

Sell and his colleagues at American campuses run sprawling warehouses filled to the rafters with cast-offs and surplus items to be sold to the general public. It's the end of the line for discarded equipment, unwanted artefacts, obsolete machinery and things that have outlived their usefulness - at least until they find a new home.

Surplus operations are often unsung, say staff, but they can be lucrative.

"They're a hidden gem. Institutions are not going to be able to balance their budgets through surplus, but it can be a small supplement," says Ruth Daoust, office property services manager at Michigan State University and president of the fledgling University Surplus Property Association.

And it's a financial bonus that has rarely been as easy to obtain as it is now. Many institutions' operations have been transformed in recent years by auction websites such as eBay that give campuses global sales reach and increased revenue.

Oregon State University turned to both eBay and labX, a speciality scientific instrument auction site, after exhausting local demand for its surplus in its small-town home. By 2001, there was only so much demand for scientific glassware and film projectors in Corvallis, Oregon, and the university was getting diminishing returns from campus sales. "We'd flooded the market," admits surplus supervisor Patsy Hendricks. These days, however, Oregon State rakes in $75,000 (£39,000) a year from eBay sales alone.

The web puts a global market of buyers within reach, says Pam Coffman, eBay customer service assistant at Pennsylvania State University's salvage and surplus department, which earns $60,000 (£31,000) a year from sales via the online auctioneer. "We were just marketing to a small area near the university. Now we're worldwide," she says.

eBay has 125 million users who trade $1,000 (£519) worth of goods every second. The effects of tapping into this marketplace can be dramatic, say university staff.

Oregon State recently sold two identical microscopes. "One went for $300 (£155) here at the university, and the other fetched $1,400 (£7) on eBay," says Hendricks.

Penn State recently sold an antique globe from its history department for $11,400 (£5,920) to a buyer in the Netherlands. Coffman says it would probably have sold for only $300 (£155), locally. Without eBay, she adds, "we wouldn't have a market for (many of the items) we sell."

Sometimes, universities' online clients are fellow institutions, as in the case of an old pipe-organ from Penn State that was recently snapped up by Indiana University for a princely $12,000 (£6,233). Current Penn State items looking for a home include two tractors used to pull aircraft on the campus's small airstrip.

On-campus eBay operations offer a fascinating window into some of the unlikely markets from which people scratch a living. Michigan State does a roaring trade on the site in spent inkjet printer and toner cartridges, says Kris Jolley, marketing and sales co-ordinator at the campus's surplus store. They are popular because brokers sell them on at a profit and firms and individuals refill them, he says, adding that eBay works best for collectibles and unique or niche items.

But it is not a good market for everything. Oregon State's Hendricks had to draw the line at a stuffed bison donated by an alumnus because of the exorbitant cost of shipping it to a distant buyer.

The University of Washington reserves bulkier items for live auctions broadcast over the web from its Seattle campus. Nine months since it introduced the internet feed, half the bidders at its auctions participate online rather than in person, says Ari Kasapyan of the university's property and transportation services department.

Kasapyan's favourite surplus item of late was a consignment of pedal-powered submarines.

"They were made of fibreglass and looked like elongated teardrops," he says.

When they're not selling unwanted items, campuses are using eBay as a pricing tool. According to Jolley, Michigan State staff use it to gauge the market rate, adjusting prices for other sales sites - such as the campus store - accordingly.

Previously, surplus items were sold at knockdown rates, reflecting the small local market; enterprising types would buy them up and sell them for more elsewhere. "We're trying to cut out the middleman and ensure the university gets the revenue, not other people," Jolley says.

It appears to be working. Michigan State does $25,000 (£12,991) worth of business a year through eBay, and overall revenue from surplus sales has soared from $350,000 (£181,000) to $1.4 million (£720,000) in the five years since it started using the website.

Still, market variations remain and some universities make more money than others. Michigan State is lucky to get $50 (£25) for vintage steel desks of the type used by old secretarial typing pools, Daoust says.

But at Arizona State, the desks can fetch thousands, thanks to the campus's proximity to Los Angeles, where trendsetters prize their retro-chic cachet.

Much online demand for surplus campus items comes from people finding new uses for them. For instance, Penn State marketed an old mailbox as a piggy bank online and found an eager buyer.

Staff say they're baffled at the appeal of some items. A South Dakota farmer paid Michigan State $2,500 (£1,299) for a beaten-up old rubbish truck without brakes, Jolley recalls.

"The key is not what an item was for, but what you can do with it now," says Wisconsin's Sell. Racks used to dry lab glassware make handy coat hooks, he says, while containers for washing out lab pipettes can become nifty umbrella holders.

But Sell says that clauses in the eBay contract, such as vendors having to absolve the firm of any responsibility if a transaction goes wrong, can bar campuses in many states from using the site.

Finding himself in this boat, Sell set up an auction site just for the University of Wisconsin, the first and still the only proprietary online auction for a campus (see box).

It has proved a useful moneymaker, and Michigan State, for one, plans to follow Wisconsin's lead. "There'll be upfront costs, but we won't have to pay (sellers') fees to eBay," Daoust says.

Others prefer to stick with eBay, which affords them protection they would lose going out on their own. "People with a bad reputation are booted off eBay," Penn State's Coffman notes.

Whatever the service, there's a certain thrill to posting random wildcard items online and watching their bidding prices rise to undreamt-of heights.

"We had an industrial cookie-cutter that sold on eBay for $546 (£283)," Oregon State's Hendricks recalls.

"I thought it would be lucky to break the $100 barrier."

WISCONSIN'S SWAP SHOP

In 2002, the University of Wisconsin created its own in-house auction website to peddle its unwanted items after contracting rules governing Wisconsin public bodies prevented it from using eBay.

Three years later, Wisconsin's "Surplus with a Purpose" (Swap) online auction is a $380,000-a-year (£197,000) operation, selling to buyers in England, Germany, Spain, Italy, Australia, Africa, South America and throughout the US.

Nearly 90 percent of the (about 40) items placed on the site each day sell within three weeks.

Among the more unusual items to go under the gavel are a lab rat guillotine, an eye-laser machine to correct vision defects and (a few years ago) parts from an earlier version of the Hubble telescope, manufactured at the Madison campus.

Swap also receives surplus from other Wisconsin public entities, such as the State Justice Department.

The connections with other agencies come in handy when selling sensitive items. "We had these lasers that were strong enough to cut a plane in half, so we put restrictions on them that the buyer had to be an ally of the US, so they (didn't fall) into unfriendly hands," says Tim Sell, the university's surplus operations business manager.

"It [wasn't] that difficult because they (the agencies) can do background checks."

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