Bargain Hopes Lure Buyers to Border Auction

U.S. Customs Inspector Fred Leslie stood on the loading dock in his official blue uniform, microphone in hand. “I’ve got 225, who’ll give me 250?” he called out.

People in the crowd below looked at each other and shifted restlessly. Many of them coveted the bamboo bedroom set that was up for bid--after all, it was valued at $5,000 and included chests and nightstands. But no one motioned or made a sound.

“I’ve got 225, who’ll give me 250?” Leslie repeated. “C’mon, you know it’s worth more than that.”

Finally a man raised his hand, signaling that he was bidding $250. “Two- fifty ,” Leslie bellowed triumphantly. “Who’ll give me 275?”

In a humorous and sometimes bizarre government version of the television show “Let’s Make a Deal,” the U.S. Customs Service conducted an auction of general merchandise last week at the Otay Mesa Customs Commercial Facility, next to the Otay Mesa Port of Entry. About 50 people showed up for the event, the first local auction the Customs Service has held in four months.

Hodgepodge of Merchandise

On the block was a hodgepodge of merchandise that was never claimed by its original owners and had languished in government warehouses for at least a year. If you wanted a big brass parrot, a box of rivets, an ocean-current measuring device or 100 boxes of plastic women’s shoes, this was the place to pick it up at a bargain price.

“Most of the stuff is merchandise that people attempted to import at the San Ysidro and Otay ports of entry. Either they didn’t have the proper documents, or they didn’t have the money” to pay import duties immediately, explained Tom Isbell, a customs supervisor at the Otay Mesa facility. In addition, some of the merchandise was simply not allowed into this country because it would have violated import quotas imposed by the federal government, Isbell said.

For a year, the Customs Service stored the merchandise in one of several warehouses in the San Diego area, notifying the owners repeatedly that their property would be sold if they didn’t come to claim it and pay storage fees. Now the service was making good on its promise.

“It costs us money to store it,” Isbell pointed out. “And space is a problem, too.’

On the morning of the auction, the merchandise to be sold was lined up against a loading dock at the Otay Mesa facility. There were 66 items in all, including a Kaypro computer, a bicycle, 96 water heaters, numerous cartons of clothing, and 10 odd-looking machines with what seemed to be polishing wheels on one end.

Some Kind of Machines

“We don’t know what the hell those are,” said one customs inspector. “All we know is that they’re some kind of industrial machines. But they’re wired for European current (220 volts). Whoever buys them will have to pay a fortune to convert them” to the 120-volt current used in the United States.

The auction began at precisely 10 a.m., but for an hour beforehand prospective buyers were allowed to inspect the merchandise--as long as they stayed behind makeshift barriers of bright red tape (the Customs Service has a sense of humor, too).

“Seems like they’d get better prices if you could look at the stuff more closely,” complained Mac McLaughlin, an elderly engineer who was recently laid off his job at Datagraphics. McLaughlin said this was first customs auction, and that he had come to look for a personal computer. He had his eye on the Kaypro, but since he couldn’t be certain that it worked, he vowed not to bid more than $100 for it.

“We’re not in the business of selling merchandise,” Isbell explained later, “and it would be tie up a lot of our manpower” if buyers were allowed to examine the merchandise directly. Inspectors would have to answer questions and keep an eye out for those who might try slip an item or two into their pockets at an opportune moment.

McLaughlin didn’t look like the sort of person who would do that. He did, however, concede that he was hoping figuratively to “steal” a personal computer at the auction.

“I really want an IBM,” he said. “I’d have to pay $3,000-5,000 for one on the open market, but there’s no telling what I might pay here.”

Looking for Profit

Karlan and Angela Tucker were looking for anything they could buy and resell at a profit. The Tuckers, who live in Mesa, Ariz., learned about the local auction by subscribing to San Diego newspapers and studying them for auction announcements. “We try to attend all types of auctions,” said Karlan Tucker, 27.

Tucker explained that he owns a business in Mesa that sells glassware decorated with high-school logos and fight songs to student groups, who in turn sell the glassware for fund-raisers. But that business keeps him busy only during the school year, and Tucker said he and his wife are trying to increase their income by buying a wide variety of merchandise at auctions and selling it through newspaper ads and at flea markets.

“It’s hard to know what you can sell and what you can’t,” pointed out Andrea Tucker, 24. “Sometimes you’re going to get stung.”

“But there’s a lot of potential in this,” her husband insisted. The key is to pay a low price for something that has or had a relatively high value when it was new--whether it’s stereo equipment or a set of old law books. “That leaves you a large margin” of potential profit, he said.

John Beck, 43, a resident of Alameda, Calif., was covering the customs auction on Otay Mesa for the Distress Sales Report, an auction newsletter that he edits. But Beck, also a veteran of numerous auctions, added, “I’ll buy something if I can get a good deal. I’ll be looking for two things--either an item I can use that can be bought at a price substantially below retail, or something that I can liquidate at a profit fairly quickly.

Some Pay Too Much

“There are deals at auctions like this, but as many people pay too much as get bargains,” he continued. “Some people get caught up in auction fever and start thinking that the highest bidder is somehow the winner, no matter what.

“What you should do is look at the merchandise and determine what you want to pay, and then not bid above that price.”

As the auction began, Leslie noted that the items to be sold could be purchased only with cash, money orders or cashier’s checks, and that they had to be fully paid for and removed by 4 p.m. “As you see it--that’s the way you get it,” Leslie added. “And we will not help you pick up any boxes and put them in your car.”

Bidding proceeded briskly. Mac McLaughlin held fast to his price of $100 for the Kaypro computer, and lost out when it sold for $125. Soon after that the ocean-current meter brought a high bid of $260. The young man who acquired it said he planned to send the meter to a friend in New Orleans.

“They have a big dock there. Maybe he can sell it,” he said. Like a number of people at the auction, he asked to remain anonymous.

The Tuckers bought four boxes of used stereo receivers and tape decks for $140 and got a big brass parrot with a stand for $55. “The stereo equipment wasn’t an exceptional buy, but I think I can sell it for a profit of $100 back home,” said Karlan Tucker. “And I’ve seen parrots like this one in stores for $150.”

Some merchandise, much of it clothing, was marked “for export only” and attracted the attention of a group of Spanish-speaking bidders. Isbell explained that such items cannot be sold in the United States and must be legally exported to another country by the winning bidder. Because of the paper work and expense involved, merchandise “for export only” attracts minimal bids and is often purchased by businessmen from Tijuana, he said.

Water Heaters Go High

The costliest merchandise of the day turned out to be the 96 water heaters, which went for a high bid of $2,300. The bamboo bedroom set brought $275. “Now that’s a bargain,” said Beck.

A few moments later he bid successfully for two cartons of cups and mugs ($30), and a ceiling fan ($25). “I’ll sell the cups and mugs at a garage sale when we’re getting rid of some other stuff,” Beck noted. “They’re popular items at garage sales. The ceiling fan I’ll use for my new house.”

The last item--four rolls of fabric--was sold a few minutes before noon, bringing the auction’s total sales to $8,100. Successful bidders, talking with each other and laughing, began backing up cars and trucks to haul away their newly purchased merchandise.

“A lot of these people are regulars at flea markets,” Beck observed. “They’ll make some money if they know what they’re doing.

“An intelligent investor knows where his outlet is. Otherwise, buying is just gambling, and gamblers lose money.”