Government auctions can be an excellent source of items to flip or resell online. We recently saw one gentleman buy a single lot of 100 smartphones for $30 each and then turn around and resell them online for $75-$100 each. Most of the cellphones were seized or otherwise confiscated by police departments across the country. Why was this gentleman able to get the phones at such a discount, you might ask. One reason might be that many people who attend auctions are looking for the hottest phones on the market: iphones, sumsungs, etc. However, this bidder was able to see value in some less popular brands, which he realized still sold quite well in online marketplaces. Let’s face it, when someone loses their $700 smartphone, they need a replacement, and they aren’t always able or willing to spend an equivalent amount on it, so they turn to cheaper alternatives.

We bring up this case to demonstrate that there are several important considerations that need to be made when searching for an item to resell profitably online:

Profit Margin

The reason the gentleman in the example was successful was because he found an item with a considerable margin of safety. It’s important to remember that popular online marketplaces have selling and payment processing fees, which can amount to as much as 20% of the final purchase price. In some instances, you may also have to offer free shipping in order to stay competitive in the market place. If you’re planning on doing some advertising for the items you bought, then this expense also needs to be taken into account. Because the gentleman was able to resell the phones for more than twice what he paid, he was still able to make a nice profit on each phone.

Size of the item

Smartphones are an excellent item to sell because they are small and east to ship. With large items, either you are the buyer are likely to incur considerable shipping costs, which will ultimately eat into your profits. With larger items, you are better off unloading them via a classified site or local listings. However, it might be somewhat time consuming to get rid of 100 office chairs using this method. That’s why it’s important to know how you will be disposing of an item before bidding on it at auction.

Popularity of the item

Another consideration to make is the popularity of the item in question. For instance, you might see a great deal on a piece of medical equipment that you know is worth triple the amount you will pay for at the auction, but unless you have a medical office or a hospital that is willing to purchase this item from you, there may be no way for you to unload it. Do some research before the auction, by looking up how many and at what price certain items recently sold for at online marketplaces. Information of this nature is easily obtainable, and at no cost to you.

Start searching for profitable items to resell online or in person at Governmentauctions.org. If you have a particular item in mind, click on the items tab on the homepage, then type in the name of the item and click Go. From there, you can sort by city and auction date. If you’re not sure about what you’d like to sell yet, click on the Government Auctions tab, and search for general auctions in your area.