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									                 Some Options for Online Vehicle Auctions
                                           Nov. 19, 2001


There are numerous online auction sites, and at least one municipality, Milwaukee, runs its own.
Here are some of the options:

GovDeals.com
Cost to sellers: 7.5% of the sale price. No setup fees or other charges.
Setup: Company sends a contract which must be signed and returned by seller.
Seller’s payment method: Check (no credit cards). Company sends a monthly bill.
Contact: Roger Allen, executive VP -- 800-613-0156.

GovDeals is a one-year-old company whose customers (34 so far) are all governments. They
include the cities of Nashville, Seattle, San Jose, San Diego and St. Petersburg. GovDeals claims
$2 million in sales since last spring. GovDeals conducted a pilot project with Public
Technology, Inc., last spring.

The company offers two services that it believes set it apart. One is “tiered asset availability,”
which allows a seller to first offer an online item within its own organization or within some
other entity, such as state government, before releasing it to the general public. The other service
is that on large-ticket items, GovDeals will – without charge – go through the Yellow Pages and
contact potential buyers in the seller’s region to drum up extra bidders. (It also notifies currently
registered bidders when items of interest are for sale.) The company will provide free training
on its system at the seller’s location.

Case study: Shelby County, AL, has been using GovDeals since May 2001. Reginald
Holloway of the county’s property management office said the county has sold “any type of
property we have” on GovDeals and can’t believe how successful the project has been. “We
have put some awful stuff out there and we’ve had buyers,” he said. He said vehicles the county
sells are often four to five years old, usually have been driven 200,000 to 300,000 miles, and
have “not much left in them.” The county starts bids as low as $100 and gets final bids as high
as $3,000.

Holloway said the county sells 8 to 10 vehicles a month online, along with numerous other items.
He estimates that it takes him 10 to 15 hours a week to administer online auctions. A clerical
person puts in another 20 hours or more, so together the work takes the equivalent of a full-time
position. Among the tasks is going on-site to take digital photos of the vehicles. The Highway
Department has assisted in this work. The county gets a certain amount of phone calls and
occasional requests to see the vehicles before they’re sold. The calls were heavier when the
county first started auctioning online.

Shelby County charges buyers a 3.5 percent surcharge to offset GovDeals’ fee.
eBay.com
Cost to sellers: $25 to advertise a vehicle, $25 more when it sells.
Setup: Done online by the seller
Seller’s payment method: Online direct pay, credit cards, checks & money orders.

eBay has a special section for vehicles called eBay Motors.

Case study: The City of Edmond, OK, has been using eBay about a year and is enthusiastic
about it. Purchasing Manager Brenda Mayer said Edmond makes about twice as much selling
vehicles on eBay as it would at a conventional auction. She also feels that online auctions are a
lot easier than conventional ones and draw a much wider audience. The city closed the sale of
28 vehicles on eBay in late October, bringing in $68,000. Ms. Mayer estimated that a
conventional auction would have raised $33,000. Two of the vehicles were 1991 and 1993
Harley Davidson police motorcycles that cost $7,000 new. They sold for $7,300 and $6,500 on
eBay.

Edmond requires that buyers pick up vehicles on-site. All sales are final, so there have been no
returns. Only one bidder has welched on his bid.


Yahoo.com
Cost to sellers : $5 to list a vehicle, $15 more when it sells. 40¢ to 75¢ additional to specify a
reserve (minimum) price. Other goods: 5¢ to 75¢ to list, 0.5% to 2% of sale price when it sells.
Real estate: $10 to list; no other fee.
Setup: Done online by the seller
Seller’s payment method: Credit card or “PayDirect” (an account funded by credit card or
checking account. After 12/17/2001, a 2.5% fee plus 30¢ applies to any PayDirect transaction.)


uBid.com
Cost to sellers : 5% of the sale price, plus 50¢ if you specify a reserve (minimum) price
Setup: Done online by the seller
Seller’s payment method: Credit cards only.

uBid was founded in April 1997 as a division of a catalog retailer to help the company move its
excess and refurbished computing inventory online. uBid's Internet auctions feature a rotating
selection of about 12,000 brand name products. All appear to be new. The goods are broken
down into 16 categories (computers, home office, housewares, etc.) Motor vehicles are lumped
in the “Everything Else”category. On Nov. 16, there were 153 products listed in the Autos
section of Everything Else, and none was a motor vehicle.

uBid does not appear to be a good option at this time.
Bid4Assets.com
Cost to sellers: 10% of gross sales.
Setup: Two-page “letter of engagement” must be signed and returned to the company.
Contact: Natalie Dhakhwa – 301-562-3438 or 877-794-1542, ext. 138

Bid4Assets is a two-year-old California company. It says selling seized, surplus and non-
strategic assets of government agencies is what it does best. The company offers not only basic
online auction services but consulting, valuation, inventory, marketing, title searches, escrow
services and live auctions. It also offers news alerts, auction alerts to buyers, and specialized
services for bankruptcy professionals. Items sold include everything from computers and
vehicles to real estate, heavy equipment and financial instruments such as accounts receivable,
judgments and commercial loans. Apparently, its fees to sellers are higher in order to cover
some of these services.

Potential bidders must pre-register and establish either a credit card account or post a deposit
whose amount is determined by the seller. There is a fee for deposit accounts. Buyers also pay a
surcharge of 5 to 10 percent of the sale price to cover Bid4Assets’ marketing and customer
service costs.

Bid4Assets’ government customers include only one municipality (Baltimore), but they include
several counties (including San Diego County, CA) and such federal agencies as the U.S.
Marshal’s Service, the FDIC and the Department of Energy.


Do it yourself (the Milwaukee approach)
Contact: Hakimah Williams, Web Administrator – 414-286-3509
         Cheryl Oliva, Purchasing Director – 414-286-3639

The City of Milwaukee, WI, has run its own online auction site at
www.ci.mil.wi.us/citygov/doa/sp/auction/auction1.htm since September 2000. It is part of the
city web site but is administered by the Purchasing Division. Hakimah Williams, web
administrator, said Milwaukee chose to create its own online auction site in order to have better
control and greater efficiency. The price for this control is reduced visibility compared with sites
such as eBay or Yahoo. The auction pages generate 50 to 60 hits per day. However, Purchasing
Director Cheryl Oliva said the auction site has had 79,500 visitors since it opened and so far has
sold 725 items, bringing in $32,507.

The site employs no special hardware or software. Items for sale are posted on the web site
manually using a standard HTML editor program (Front Page). Bidders can fill out an online
form at www.ci.mil.wi.us/citygov/doa/sp/auction/bid_form.htm (see attached sample) or mail,
fax or hand-deliver it to the city. Bids are updated on the web site once a day, also by hand. Ms.
Williams estimated that it takes a staff member an hour a day to update the bids and another hour
to add and removed goods from the site.

Ms. Oliva said the city feels that it gets a better price for most vehicles sold online than it would
at conventional auctions. She said a big advantage of doing the auctions itself is that the city
saves the auctioneer’s commission. The commission at conventional auctions is about 7.9% of
the sale price on vehicles and heavy equipment and as high as 24.9% on many other items. She
said that even counting the staff time needed to maintain the auction site, the city still come out
ahead


Conclusions
The beauty of selling items in online auctions is that the city can get in and out quickly, try more
than one auction site at a time, and experiment with different options at very little expense.
Online auctions can also be held more frequently than conventional ones.

Given this ease of entry, it is recommended that the city identify its most saleable vehicles and
then sell half on either eBay or Yahoo (Yahoo is $30 per vehicle cheaper), the other half on
GovDeals. eBay and Yahoo offer high exposure at the lowest fees of those surveyed. GovDeals
seems worth trying because of its affiliation with PTI and its all- government focus.
                  Example of sale terms on GovDeals.com



THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY

                               Department of Finance
                             Division of Public Property
                         222 Third Avenue North – Suite 650
                            Nashville, Tennessee 37201

                 Online AUCTION - Terms and Conditions
 •   Buyer must be registered, and in good standing with the online vendor.

 •   Buyer must be of legal age to enter into a contract with the Metropolitan Government.

 •   All property is offered for sale "AS-IS, WHERE-IS" with no warranty or guarantee as to
     its fitness for any use or purpose offered or implied. Please note that ALL SALES ARE
     FINAL.

 •   Every effort will be made to accurately describe the items offered for sale. However, the
     bidder is cautioned that the items presented are used and may contain defects not
     immediately detectable. Items are available for public inspection prior to your bidding.
     Please use your best judgment when bidding.

 •   The measure of the Metropolitan Government’s liability, in any case where liability of the
     Government to the Buyer has been established, shall not exceed refund of such portion
     of the purchase price as the Metropolitan Government may have received.

 •   The Metropolitan Government of Nashville and Davidson County reserves the right, at its
     absolute discretion, to reject any and/or all bids considered as not in its best interest.
     The Government also reserves the right to withdraw an item at any time – including
     during the bidding process.

 •   Payment for all merchandise must be made to the Metropolitan Government, in the form
     of Cash (up to $50.00), Cashier’s Check, Money Order, Certified Check, Traveler’s
     Checks, credit card (Visa or MasterCard) or debit card. The Metropolitan Government
     will accept no other form of payment, which includes without limitation, personal,
     business or company checks, unless otherwise agreed to in writing by the Metropolitan
     Government. Payments may be made between the hours of 8:30 a.m. to 1:30 p.m. and
     2:30 p.m. to 4:00 p.m. – Monday thru Friday – at the Division of Public Property located
     in Suite 650 – 222 Third Avenue North – Nashville, Tennessee. Only after full payment
     has been received may your merchandise be claimed at the Public Property Warehouse.
     Items will not be shipped unless otherwise specifically agreed to in writing by the
     Metropolitan Government.

 •   Items must be paid for and claimed within ten (10) government working days from the
     date of the award. If not paid and claimed, the Metropolitan Government reserves the
       right to auction, in its sole discretion, any such items after the aforementioned ten (10)
       day period, whereby the Metropolitan Government shall refund the purchase price if
       paid. In any event, the bidder will be liable for any storage, administrative or other
       expenses necessary to re-auction the unclaimed item. Any item not claimed after the ten
       (10) day period, may be assessed a handling charge of ten percent (10%) of the bid
       price of the unclaimed item in the event the Metropolitan Government agrees to proceed
       with the sale. The foregoing remedies are non-exclusive and are in addition to any other
       remedies that the Metropolitan Government has at law or in equity.

   •   Sales Tax will be added to the total amount of the purchase on all items other than titled
       vehicles.

   •   On vehicles, good and marketable titles will be issued when the vehicle is paid for, in full.
       Vehicles must be picked up in Nashville, Tennessee. Open TITLES cannot be issued.
       (The Metropolitan Government WILL NOT issue replacement titles.)

   •   Bidder warrants that he/she is not an employee, whether full-time, part-time or temporary
       of the Metropolitan Government or of any other contractor of the Metropolitan
       Government that assists either directly or indirectly with the disposal of the Metropolitan
       Government's surplus property, member of the employee’s immediate family, those
       persons being spouses, parents, children, siblings, grandparents, grandchildren,
       mothers-in-law, fathers-in-law, daughters-in-law, sons-in-law, legal guardians or
       dependents, step and half relations (as defined by Civil Service Rules), or any person
       acting on behalf of the employee whether or not a formal agency relationship exists.

   •   The Surplus Property Warehouse is open to the public from 10:00 a.m. – 2:00 p.m.
       (Central Time) Monday thru Thursday. Online bids may be placed at the warehouse. The
       warehouse is located at 70 Peabody Street – Nashville, Tennessee. Phone: (615) 862-
       6172

   •   Bidders may be barred from participation in Metropolitan Government sales for any of
       the following:

          1. Failure to observe these Terms and Conditions
          2. Failure to make good and timely payment for the item(s) awarded.
          3. Failure to claim purchases.

Wherefore, these terms and conditions are adopted pursuant to M.C.L. § 4.32.020 effective the
19th day of January, 2001, and will remain in full force and effect unless later modified in
accordance with the Metropolitan Code of Laws.
                 Another example of sale terms on GovDeals.com



                                         Shelby County, Alabama
                                          Terms and Conditions:

Guaranty waiver - THE SELLER MAKES NO WARRANTY, GUARANTY OR REPRESENTATION OF ANY
KIND EXPRESSED OR IMPLIED AS TO THE CONDITION, UTILITY OR USABILITY OF THE PROPERTY
FOR ANY PURPOSE WHATEVER OFFERED FOR SALE. SELLER FURTHER MAKES NO WARRANTY OF
MERCHANTABILITY. NO DEDUCTION WILL BE ALLOWED ON DAMAGED ARTICLES AS ALL
GOODS SOLD "AS IS, WHERE IS," AND WITHOUT RECOURSE.

Payment - Payment in full is due before removal of any of the items. Payment to be in the form of a money order,
certified check, cashier's check, trust company's treasurer's check and approved Visa and MasterCard credit cards.
No cash, personal, or company checks will be accepted. Checks shall be made payable to: Shelby County
Commission.

Addition to or withdrawal from sale - The seller reserves the right to withdraw from sale any of the items listed or
to sell at this auction items not listed. The seller also reserves the right to group one or more lots into one or more
selling lots or to subdivide into two or more selling lots.

Dispute between bidders - If any dispute arises between two or more bidders, the seller may decide the same or
may immediately put the lot up for sale again, and resell to the highest bidder. The decision of the seller shall be
final and absolute.

Reserve - The seller reserves the right to reject any and all bids. On lots upon which there is a reserve, the seller
shall have the right to bid on behalf of the seller.

Removal - Removal shall be at the expense, liability, and risk of the purchaser. Purchases will be released only on
presentation of paid bill. All items must be removed within seven (7) days of the date sold unless prior approval is
granted from the Seller.

Personal and property risk - Persons attending during exhibition, sale or removal of goods assume all risks of
damage of or loss to person and property and specifically release the seller and GovDeals from liability therefore.

Records - The record of sale kept by the seller and GovDeals will be taken as final in the event of any dispute.

PLEASE NOTE: The buyer will be subject to a Buyers Premium of 3.5% that will be added to the final price and
collected at time of settlement. No Alabama sales taxes are charged for these items. All bidders and other
participants of this auction agree that they have read and fully understand these terms and agree to be bound thereby.
                               Milwaukee’s e-mail bid form

                                          BID FORM


Name:
Address:
Telephone:
City/State/Zip
E- mail:
Auction
Number/s
Description of
Item
Quantity:
Size(s):
Bid Amount:
Comments:

 Send      Clear the form



You may fill out the bid form on- line and send back to us electronically, or print the bid form
and hand deliver, mail, or fax to:

                                      City of Milwaukee
                                      Business Operations Division
                                      City Hall - Room 601
                                      200 E. Wells Street
                                      Milwaukee, WI 53202
                                      Fax: 414-286-5976

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