Daniel's question this week is about a thing we keep mentioning in passing and then never actually unpacking. Government auctions, liquidation auctions, bankruptcy auctions. We say these words like everyone knows what happens in the room. And his actual question is two parts. What are these events, actually, when you strip the jargon off. And then the part that I think is the real question: the people who show up at these things every week, the dealers and the refurbishers and the plant managers, how do they know where to be and when. Because none of this shows up in your normal feed.
The discovery layer. That's the part that separates the people who get the nine thousand dollar forklift from the people who read about the nine thousand dollar forklift three months later.
Right. And I want to start with the distinction because Daniel lumped three things together and they are not the same animal. A government auction is the state selling its own surplus. A forklift the county bought for the road department, a server rack from a federal office building, a seized boat from the Marshals Service. The seller is the government, or a platform the government hired.
And the scale of that is bigger than most people think. The GSA alone moves over five hundred million dollars in surplus assets a year. GSA Fleet is the single largest source of used government vehicles and it sells thirty to forty thousand cars and trucks annually. That's a fleet the size of a mid-sized rental company just cycling through public auction.
So the state is not a hobbyist seller. It is one of the largest used goods operations in the country and it runs on a calendar most citizens have never looked at.
Liquidation is different. That's a private company selling its own assets, either surplus to ongoing operations or the whole facility because the plant is closing. The seller is a corporation and they've hired an auctioneer. BTM Industrial, Grafe, Apex, Schneider, Perfection Global. These are firms that specialize in selling entire factories piece by piece.
And bankruptcy is the third thing. That's a court supervising the sale of a distressed company's assets under Section 363 of the bankruptcy code. The judge approves the bidding procedures, the creditors can object, and the buyer walks away with something the other two channels cannot offer.
Free and clear title. That's the phrase. A 363 sale extinguishes liens, claims, and encumbrances. You buy the asset and nobody can show up later saying they had a security interest in the press brake. Government and liquidation sales are as-is, where-is, no warranty, and good luck. Bankruptcy is the opposite risk profile. Same word, auction, completely different legal machinery.
Which is why the buyer pools barely overlap. Government auctions are open to the general public. You register, you bid, you pick up your desk chair. Liquidation sales are often trade-only. FOR TRADE BUYERS in capital letters. And a 363 sale is dominated by private equity, strategic acquirers, and secured creditors who can offset their claim against the purchase price.
So when Daniel asks who shows up, the answer is it depends which room you're standing in. At a government surplus sale you get dealers, resellers, hobbyists, a guy who wants a used police interceptor. At an industrial liquidation you get plant managers, equipment resellers, MRO teams looking for conveyor components and spare pumps. At a bankruptcy auction you get institutions.
But the interesting overlap is the refurbisher. That's the buyer who shows up across all three channels and does something most people don't think about. They buy the broken lot, the pallet of untested electronics, the forklift with a blown hydraulic line. Then they fix it and resell, or combine three broken units into one working one, or part the whole thing out.
Surplus Depot has a line about this that I think gets at the whole psychology. Your edge is not getting perfect inventory. It is knowing what imperfect inventory is still worth buying. That's the entire business model in one sentence.
So the person who wins at this is not the person with the most money. It's the person who can look at a pallet of mixed industrial controls and know if there's four hundred dollars of resellable relays in there.
And the numbers back that up. Grafe published real hammer prices from recent liquidations. A Toyota forklift with sixteen hundred hours, nine thousand dollars. An Ingersoll Rand air compressor with thirty five thousand hours, five grand. A two hundred kilowatt diesel generator, forty seven fifty. A ten kilowatt fiber laser from twenty eleven, fourteen hundred dollars.
Fourteen hundred dollars for a fiber laser.
That's the thing. The original price on that laser was probably north of a hundred thousand. It's eleven years old, it's been in a production environment, and the market for used ten kilowatt lasers is thin. So it sells for the price of a decent laptop.
Which brings us to Daniel's actual question. Where do these people find out about the sales. Because I can know that a two hundred kilowatt generator might go for five grand, but if I only find out about the auction after it closed, I am not a buyer. I am a spectator.
And here's the thing that surprised me when I started digging into this. There is no master calendar. No single feed that aggregates government surplus, industrial liquidation, and bankruptcy sales together. The discovery layer is fragmented. It is a pile of separate channels that the repeat buyers have learned to monitor.
Start with the government side. Because that one is at least semi-official. GSA Auctions is the federal portal. GovDeals, PublicSurplus, and Municibid handle state and local. Most agencies don't run their own auction platform. They contract with one of those three.
And then there's USA.gov's auctions and sales page, which is supposed to be the single e-marketplace aggregating federal asset sales. It points you at everything from GSA to the Marshals to the IRS.
The Marshals Service sells seized criminal assets. The IRS sells tax-seized property. The Department of Defense has DLA Disposition Services for military surplus. These are all separate streams. If you want a seized yacht and a used Army generator, you are checking two different portals.
And the fees vary wildly, which is its own trap. GSA Auctions historically charges no buyer's premium. GovDeals charges twelve and a half percent. Ritchie Brothers twelve to fifteen. PropertyRoom sixteen and a half. Grafe fifteen to eighteen. So a bargain at one venue is a loss at another, and that premium is added on top of your winning bid.
Sixteen and a half percent is the difference between a good deal and a bad one if you didn't factor it in before you raised your hand.
And on the industrial side, the discovery happens on Bidspotter, which calls itself the world leader in industrial auctions and lists timed and live sales from hundreds of auctioneers. NetBid does the European insolvency and industrial market. Then there's Industrial-Auctions dot com and the individual auctioneer sites themselves.
So if I'm a plant manager looking for a used CNC mill, I'm not going to one place. I'm going to Bidspotter, I'm on BTM's email list, I'm on Grafe's email list, I'm checking NetBid for European machinery.
And the auctioneers know this. Grafe literally advises buyers to register for email alerts when new sales are posted. Surplus Depot runs weekly auctions specifically so buyers can build a repeatable sourcing rhythm. The whole industry is built around getting on the list before the lots go live.
That's the moat. The repeat buyer's edge is not capital. It's being on the right email lists and alert services. Registration on GSA can take twenty four to forty eight hours. If you hear about a sale the day it closes, you are not bidding. You are reading the results.
And there are aggregators. GovAuctionAlerts indexes GSA Auctions and GSA Fleet and routes lots into categories and sends alerts. Auction News does the UK and Europe with free alerts for saved searches. BidProwl publishes guides and tracks the fee structures across platforms.
So the professional has a stack. Probably a browser folder with eight or nine tabs, three email lists, two alert services, and a calendar.
And then bankruptcy is a completely different discovery problem. A 363 sale is not listed on Bidspotter. It's in the bankruptcy docket. The notice goes to creditors and gets published in national newspapers like the Wall Street Journal and USA Today. The timeline from the bidding procedures motion to close is forty five to ninety days.
So if you want to buy a distressed company's assets, you are reading dockets or you are paying someone to read dockets for you. Or you are the stalking horse bidder who set the floor in the first place.
The stalking horse. That's the buyer who negotiates the purchase agreement before the auction, sets the floor price, and gets a break-up fee if someone outbids them. The whole process is built around that anchor. Bid increments in a mid-market 363 sale are a hundred thousand to five hundred thousand dollars. This is not a public surplus sale with a ten cent starting bid.
A hundred thousand dollar bid increment. That is a different planet from the guy buying a seized Jet Ski from the Marshals.
And it should be. The legal machinery is different. Rule 2002 requires twenty one days minimum notice. The creditors committee can object. The US Trustee can object. The sale order provides title certainty that would be unavailable in a direct purchase from a financially distressed seller outside of bankruptcy. That's the whole point of going through the court.
So the three channels have different sellers, different buyers, different discovery mechanisms, and different risk profiles. And the only thing they share is the word auction.
And the as-is trap versus the free and clear promise. That's the thing I want to sit with for a second. Government and liquidation sales are strictly as-is. You buy the generator, it doesn't start, that's your generator now. No warranty, no return, no recourse. Bankruptcy sales are the opposite. The court is scrubbing the title so clean that successor liability is extinguished.
Which is why a private equity firm will bid in a 363 sale but will not touch a liquidation auction. The PE firm is buying the entity's assets with legal certainty. The refurbisher is buying a pallet of mystery and betting on their own ability to sort it.
Both are rational. The refurbisher's edge is knowledge. The PE firm's edge is capital and legal process. They're solving different problems.
To answer Daniel's first question directly. A government auction is the state selling surplus, seized, or forfeited property, usually through a contracted platform. A liquidation auction is a private auctioneer selling a company's assets, either surplus or the whole facility. A bankruptcy auction is a court-supervised sale under Section 363 that delivers clean title. Three different events.
To answer the second question. The people who show up find out through a stack of channels. Official portals for government stuff. Bidspotter and auctioneer email lists for industrial liquidations. Bankruptcy dockets and claims agents for 363 sales. Plus aggregators and alert services layered on top. There is no single feed.
I think the thing that's actually interesting here, the thing Daniel is probably circling, is that the fragmentation is the opportunity. If there were one master calendar that everyone checked, the bargains would get competed away. The fact that discovery is scattered means the person willing to do the homework has an edge.
Sealed bid auctions are a good example of that. BidProwl points out that sealed bids often attract fewer participants than timed online auctions. If you're comfortable with your valuation, sealed bids can be where the best deals hide. Fewer people in the room means less competition.
The inefficiency is the feature. The person who reads the docket, the person who's on the Grafe list, the person who registered for GSA before the lot went live. That person is buying at prices that reflect thin competition.
The sell-through rates prove it. At one Grafe sale, three hundred twenty two of three hundred twenty five lots sold. At another, seventeen eleven of seventeen forty nine. Nearly everything sells. The question is just who's in the room when it does.
Which makes me think about the guy Daniel described in a previous prompt. The procurement engineer with a personal database of manufacturer part numbers because he's been burned before. That guy is exactly the profile of a liquidation auction regular. He knows what a specific pump is worth because he's bought three of them.
He's probably on a first name basis with the auctioneer's rep. That's the other discovery channel nobody writes about. The relationship. The auctioneer calls the buyers who always show up and says, we've got a plastics line coming up next month, you're going to want to see the injection molding machines.
The calendar is partly public and partly social. The public part is the portals and the dockets. The social part is the phone call from the guy who knows you buy used conveyors.
That's why the question of where people find out has a boring answer and a real answer. The boring answer is Bidspotter and GovDeals and the bankruptcy docket. The real answer is that the repeat buyers have built a monitoring system and a reputation, and both of those take years.
Let me ask you something. If you were going to buy one thing at one of these auctions, what would it be.
Honestly. I'd look at the lab and R&D equipment. Grafe listed lab assets in their industrial sales and that stuff is wildly underpriced because the buyer pool is thin. A working spectrometer with no one bidding against you. Or I'd go for the material handling equipment. Forklifts are liquid, everyone needs them, and the hammer prices are published so you know what the market is.
I'd buy the generator. Five grand for a two hundred kilowatt diesel unit that originally cost thirty or forty. Even if it needs a service, the margin is there.
That's the thing. You're not buying it to use it. You're buying it because you know what it's worth and you know someone who needs it. That's the refurbisher mindset.
Which is why the answer to Daniel's question about who shows up is really an answer about what kind of business you're in. If you're in the business of knowing what things are worth, you show up. If you're in the business of needing one specific thing, you probably overpay.
The professional buys the pallet of mixed relays because he can sort it. The amateur buys the one forklift because he needs a forklift. The professional gets the better price because he's bidding on things other people don't understand.
The bankruptcy channel is the extreme version of that. The people in that room are buying entire companies. They're not sorting relays. They're sorting legal claims and customer lists and real estate leases.
Hilbert: Grafe's buyer's premium on that forklift was eighteen percent.
Say that again.
Hilbert: Nine thousand dollar hammer price. Eighteen percent premium. That's sixteen hundred and twenty dollars on top. Plus rigging and trucking. The guy who bought it probably paid eleven five by the time it was on his lot.
The published bargain price is not the total cost. That's the thing the guides warn about and the thing everyone forgets in the room.
Hilbert: I ran a small engine repair shop in Ohio in the late nineties. We bought at county surplus sales every spring. The county would dump their mowers and snowblowers and generators. I'd buy a pallet of dead mowers for forty dollars, fix six of them, sell them for a hundred each. The premium was ten percent and I still made money because I knew which ones just needed a carb clean.
The edge was the diagnosis, not the auction.
Hilbert: The edge was being willing to drive two hours on a Tuesday morning and stand in a muddy lot while they auctioned off a pallet of broken Toros. Most people won't do that. That's the whole business.
The discovery for you was what, the county published a notice in the local paper?
Hilbert: The county garage called me. They had my number because I'd bought from them for three years. They'd say, Herman's guy, we've got twelve mowers going up next month, you want to come look before we list them. I'd go look on a Friday afternoon, make my list, and bid on Tuesday.
The public calendar was the floor, and the actual information was the phone call.
Hilbert: The actual information was knowing the guy who ran the garage. He wanted the mowers gone before spring. I wanted them before anyone else knew they existed. We both won.
That's the thing that doesn't show up in any guide. The social layer. The auctioneer and the seller both want repeat buyers. They cultivate them. The public portal is for everyone else.
Hilbert: One year I bought a county dump truck for eight hundred dollars. It needed a transmission. I didn't need a dump truck. I needed the plow frame off the front. Sold the truck for twelve hundred without the plow, kept the plow for my own truck. That's the parts-out business, and I didn't learn it from a website.
You learned it from standing in a muddy lot.
Hilbert: I learned it from my brother-in-law, who did it for fifteen years before I started. He told me which lots to bid on and which to walk away from. That's the real discovery channel. Somebody who already knows.
That's the part that's hard to replicate. You can sign up for GovAuctionAlerts in five minutes. You can't sign up for fifteen years of knowing which broken mowers are worth forty dollars.
The portals are the entry point. The expertise is the moat.
Hilbert: The portals are the menu. The phone call is the reservation.
I want to pull one thread from that. The county garage called you because you were a known buyer. That's the same dynamic as the stalking horse in a 363 sale. The seller wants certainty. They want to know the stuff will move. So they call the person who always shows up.
The stalking horse gets a break-up fee if someone outbids them. The county garage gave you a preview. Same logic. Certainty has value.
Hilbert: I never got a break-up fee. I got a cup of coffee and a look at the mowers before they hit the lot. That was worth more than the fee.
Because the information asymmetry was the whole margin.
Hilbert: The premium was the cost of doing business. The information was the business.
If Daniel is listening and thinking about trying this, the advice is not start with the portals. The advice is start with the lots. Go to a few auctions, watch who bids, see what things sell for, and figure out what you know that other people don't.
Register early. The GSA registration window is twenty four to forty eight hours. If you wait until the day of, you're locked out.
Hilbert: Bring a truck. The pickup window on GSA lots is five to fifteen business days. If you can't move it, you shouldn't buy it.
That's the unglamorous part. Everyone thinks about the bidding. Nobody thinks about the loading dock.
The non-payment penalty on GSA is twenty percent liquidated damages. So if you win and you don't pay, you owe a fifth of the bid as a penalty. That concentrates the mind.
The whole system is built for people who are serious. The barriers are not high, but they are real. Registration, payment windows, pickup deadlines, buyer's premiums. The casual bidder gets filtered out fast.
Which is why the repeat buyers win. They've already solved the logistics. The truck is parked out back. The payment terms are known. The only variable is the lot itself.
Daniel's question resolves into something clean. What are these events? They are three different mechanisms for moving assets that the seller either doesn't want or can't legally sell any other way. Government surplus, private liquidation, court-supervised bankruptcy. And where do the regulars find out? They build a monitoring stack of portals, email lists, alert services, and dockets, and then they layer a social network of auctioneers and sellers on top. The stack gets them in the room. The network tells them which room is worth being in.
The stack is different for each channel. Government is GovDeals and PublicSurplus and GSA. Industrial is Bidspotter and the auctioneer lists. Bankruptcy is the docket and the claims agent. No single feed covers all three.
Which feels like an opportunity, honestly. Someone should build the master calendar. But then the bargains would disappear. So maybe the fragmentation is the point.
The fragmentation is the business model for the aggregators. GovAuctionAlerts exists because GSA doesn't send you a nice email when a CNC machine shows up. Auction News exists because NetBid doesn't cover the county sheriff's sale in Ohio. Every aggregator is a patch on the fragmentation.
The auctioneers don't want the master calendar either. They want their own email list. That's their relationship with the buyer. They're not going to hand that to a neutral platform.
The answer to where do people find out is, they do the unglamorous work of assembling their own feed. And the people who do it well get the nine thousand dollar forklift.
The people who do it badly pay sixteen hundred dollars in premium on a forklift they didn't inspect.
The inspection is the other thing. GSA lets you inspect lots before bidding. Grafe runs inspection days. The pros show up. The amateurs bid blind.
The full answer is: find the sale, inspect the lot, calculate the premium, know your transport, and bid against people who didn't do any of that. That's the edge.
The edge compounds. The more you buy, the more the auctioneers call you. The more they call you, the earlier you know. The earlier you know, the better the lots you see. It's a flywheel.
Which is why the same names show up at every sale. They're not smarter than everyone else. They just started earlier and never stopped.
The bankruptcy channel is the extreme end of that. The PE firms and strategic buyers in a 363 sale have entire teams reading dockets. That's their monitoring stack. A junior associate at a distressed fund is basically a human alert service.
The answer scales. A guy with a truck and a carb cleaning kit monitors the county garage. A distressed fund with a hundred million under management monitors the bankruptcy docket. Same behavior, different zeros.
The tools are the same shape. A list of sources, a schedule, a filter for what you actually want, and a network of people who know you're a buyer.
I think the thing I'll take from this is that the auction itself is the least interesting part. The interesting part is everything that happens before the auction. The discovery, the inspection, the premium math, the transport plan. The bidding is just the moment the preparation pays off.
The preparation is mostly boring. Reading email lists. Checking portals. Driving to inspection days. Standing in muddy lots. That's the job.
The job is showing up before the auction starts.
This has been My Weird Prompts. Thanks to our producer, Hilbert Flumingtop, for keeping the show running and for the mower repair economics lesson.
If you want to reach us, email us at show at my weird prompts dot com. Or visit my weird prompts dot com for more episodes.
We'll be back soon.
