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Opportunities for Revenue Generation through the sale of Surplus Property NAEP Conference Wednesday, April 4 th, 2012 Bo Solomon, University of Missouri.

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Presentation on theme: "Opportunities for Revenue Generation through the sale of Surplus Property NAEP Conference Wednesday, April 4 th, 2012 Bo Solomon, University of Missouri."— Presentation transcript:

1 Opportunities for Revenue Generation through the sale of Surplus Property NAEP Conference Wednesday, April 4 th, 2012 Bo Solomon, University of Missouri Surplus Property

2 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

3 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.

4 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.

5 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

6 University of Missouri 4 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

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

8 Warehouse

9 Truck

10 Scrap Metal Bin

11 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

12 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

13 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

14 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.

15 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

16 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

17 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?

18 Sales methods Columbia Monthly auctions on Wednesday, mid-month but not always 3 rd (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

19 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.

20 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

21 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?”

22 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

23 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

24 Sustainability Landfill avoidance Pallets Tiger Treasures Environmental studies students make good Surplus student workers Work study when available

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

26 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

27 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

28 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”

29 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

30 Cable TV Ad

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

32 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

33 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

34 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?

35 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

36 Questions?

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