One of the most common mistakes people make buying at government auction is the idea that they will be able to “flip” the item, in other words sell it quickly at a profit, to another wholesaler. If we are talking about jewelry, flipping it would mean taking the item to a jeweler. In the case of cars, it would mean running to a car dealer. This almost never works out.

Not only do jewelers and car dealers have their own wholesale sources for items, which they tend to view as trade secrets, but they also look at anything you buy via the Internet or Government Auction as lost business for them. Many of them will be annoyed by your offer to sell to them. They want you to buy from them, not sell to them.

If you ask them what the ring or car is worth, you might not get the truth. They will probably try to buy the item from you at a price that would constitute a form of legalized theft and you will be left with the feeling that you overpaid for the item, even if it’s not true.

Considering the fact that you will be bidding against other bidders who will drive the price typically somewhere between just below wholesale and up to retail and beyond, the end price of an item at government auction does not typically leave room for another wholesaler to make money from it. That doesn’t mean you can’t get great deals, they do happen, it is just not as easy as it sometimes is portrayed to be.

Bulk buys, and there are plenty of these types of lots at treasury auctions, represent the best opportunities for resale, like in the example with the sunglasses we talked about earlier in this tutorial. Knowing values and keeping a sharp eye out for opportunities on individual items can also yield results.

Once you acquire items for resale through government auction, or any other channel for that matter, you need to decide how you will resell the item. The most popular channel for resale these days is eBay. Craigslist.org is another popular venue for reselling and it is free.