Used U.S. Goods Slip Over Border to Mexico

Inside the Salvation Army’s cavernous Anaheim warehouse, auctioneer Jack Parton walks between tall rows of stacked items ready to be sold and barks: “What’ll you give me here? Come on--let’s start it at $20. Who’ll give me $20?”

The pace is fast, almost too fast for the uninitiated, but not for Ensenada’s Juan Gandara, one of a number of Mexican entrepreneurs who have driven hundreds of miles in search of bargains by the truckload.

“There’s no other place like this,” said Gandara, who at 26 was one of the younger Mexican buyers at a recent auction. “In San Diego, the auction there sells piece by piece. And Goodwill doesn’t have auctions. This is the biggest auction where you can buy wholesale.”

Used sofas, mattresses, stoves, refrigerators, drapes, shirts, blouses and other items donated to the Salvation Army and other major charitable organizations by Southern Californians are finding their way to Mexico in huge quantities. America’s discards are furnishing and clothing Mexican households all along the border.

Stream of Commerce

Because individual buyers who resell U.S.-made goods in Mexico rarely declare their shipments to customs officials on either side of the border, the exact proportions of this phenomenon are difficult to measure. But interviews and observations of the stream of commerce across the border leave little doubt that tons of used goods bought from charitable organizations are being sold every day in Mexico’s border cities.

Taking advantage of Mexico’s inflation crisis, Mexican pioneers in what one Goodwill Industries official called “hands-across-the-border” trade are selling lot after lot of household goods for five times the purchase prices.

“Some of these guys have been doing it for years, more than 10 years in some cases,” said Parton, who is on a first-name basis with many of the Mexican buyers.

“It’s part of the underground economy that ties the two countries together,” said Melissa Coyle, director of the Mexico division of the U.S. Department of Commerce in Washington.

Prices Skyrocket

These merchants-- “comerciantes” in Spanish--have seen Mexico’s prices for new goods skyrocket. For example, the price of a pine bedroom set at one furniture store in Mexicali has risen from 60,000 pesos, about $420 in U.S. dollars, in 1983, to 1.3 million pesos, or $940, today.

What has developed, Coyle said, is a larger gap between the rich and poor in Mexico. The major department stores, such as Dorian’s and La Joya de Puerto in Ensenada, carry imported brands like Giorgio, Gucci, Gitano and Yves St. Laurent and cater to the upper class. The masses can afford new clothing only for special occasions and holidays, the experts said.

“Inflation has devalued the peso, but demand continues to grow for these used items in Mexico,” said George Kessinger, president of Goodwill Industries of Orange County. “In turn, we sell to the Mexican buyers, and the income helps run our programs for the developmentally disabled.”

Big Business

Most donors to charitable organizations expect their old sofas and discarded clothing to be repaired and sold in a local thrift shop, said Maj. Harland Hall, who is with the Salvation Army in Anaheim.

“They don’t understand that this is a big business,” he said.

James Nulliner, production supervisor for the Salvation Army in San Diego, said that much of what is donated is too worn to be repaired and resold profitably in the United States.

But in Mexico the demand is greater, and an old sofa worth little here will be repaired and resold to a family, said Nulliner, whose auction attracts 100 buyers daily.

“Of those (buyers), 90% are from Tijuana, Ensenada and Mexicali,” he said.

For Gandara, the Salvation Army and Goodwill auctions are a mother lode.

“The secret in this business is where you buy--it’s not where you sell,” Gandara said. “The cheaper you can get it, the more money you make.”

Two or three times a month he and his brother, Jose, journey north from Ensenada in Juan’s pickup truck. They usually arrive in Orange County late Monday or Tuesday and spend two days buying before returning to Mexico. Fridays are spent repairing broken refrigerators, and cleaning and painting appliances, in anticipation of the weekend sale at Centro Comercial Los Globos, a market in southeast Ensenada.

The buying is not easy, said Gandara, who recently ran into stiff competition at a Salvation Army auction in Anaheim. About 50 buyers milled about, many seeking to outbid him on some refrigerators he had his eye on.

Bicycles were a hot item. A rusty clump of eight of them--three 10-speeds, two old beach cruisers and three boys’ BMX-type bicycles--sold for $55. “That’s Carlos,” Gandara said. “He’ll take those down to Ensenada, repair them, paint them and sell each for about $35 to $50.”

When a chance to buy several refrigerators came along, Gandara struck like a cobra.

“Fifty. Do I have 50?” Parton said.

“Fifty,” Gandara yelled.

“Fifty-five,” someone else shouted.

“Do I have 60? Give me 60.”

“Sixty,” said Gandara, who smiled proudly and peeled off the cash from a fat roll tucked deep in his pocket.

This day, Gandara bought two wooden headboards, several metal bed frames, five stoves, seven refrigerators and about 20 mattresses and box springs, all for less than $340.

“Good mattresses here you can buy for $5 or $6 and sell them down there for about $25 to $30,” he said. “If I have a lot, I buy, then sell to other buyers here. We all know each other.”

When many buyers want a particular item, it shoots up the wholesale price. “That’s when the coins come out and we play bolar, “ said Hector Guerrero, a buyer from Ensenada.

To play bolar, competing buyers flip coins in the air. “If you have three people who get heads, the one with tails wins and gets to bid alone on the next item,” Guerrero said.

“The auctioneers don’t like us to do that, but what the heck--it’s too expensive otherwise,” Gandara said.

Once the used items are loaded onto his truck, Gandara and his brother head straight for the nearest Santa Ana Freeway entrance and the five-hour trip home.

Mexican citizens are allowed to cross the border and buy U.S.-made items, which many of them prefer to Mexican-made products, for personal use, said Thomas F. Lee, an economic consultant in El Paso who has done studies on the border economy.

But instead of declaring expensive items to Mexican customs officials, and as a consequence being forced to pay an import fee, people usually just pay a mordida, or bribe, to a Mexican border official, Lee explained.

“It is the most common method of bringing the stuff in,” he said.

Mexico does have laws that protect the country’s domestic products and limit the importation of new goods, such as televisions, radios, computers and furniture.

Additionally, the Mexican government sets import quotas for some used goods, said David Ramirez, deputy director for imports in the Mexican government’s secretary of commerce office in Mexicali.

Ramirez estimated that about 200 comerciantes are based in Mexicali and sell about $1 million a year in second-hand U.S. goods.

“The reason for the imports is that prices are high for new goods, especially all-wood furniture, and although we produce televisions, mattresses and other household goods, Mexico has many people who cannot afford these items new,” Ramirez said.

On the road south from Tijuana, Gandara prefers to avoid the newer and faster toll road because of the policia judicial --”bothersome pests who want money,” said Jose--and instead sticks to the old highway to Ensenada, a hilly series of zigzags covered with ruts.

They stop for lunch near Rosarito Beach and arrive in Ensenada about two hours later, tired and hungry as they head down Calle Nueve towards Colonia Bustamante and Los Globos market.

On weekends, the market bustles with thousands who shop for bargains in a three-square-block area. Los Globos is one of three such commercial areas in Ensenada, where vendors sell everything from vegetables to used tires.

During a brief walk around Los Globos, Gandara introduced a reporter to more than half a dozen vendors, who said they routinely buy at the Salvation Army in Anaheim and at the Goodwill’s “as-is” sales yard in Santa Ana.

Buyers of U.S.-made goods sell at the market areas and at another four sites where swap meets are held, said Jorge Gasparri del Valle, Ensenada Chamber of Commerce director.

While Del Valle acknowledged that the city has new department stores, he also said Mexican buyers like Gandara fill a void by bringing affordable items to Ensenada.

Gandara and his brothers, Jose and Roberto, unloaded their truck one recent Friday and began the painstaking process of refurbishing appliances.

Working on one refrigerator, Roberto bled the lines of old Freon by hooking up a second compressor. Then he soldered a new section of copper tubing and within minutes had the refrigerator purring.

“Now I’ll just refill with fresh Freon, clean up the inside, paint it and it’s done,” he said. He said it might bring 80,000 to 120,000 pesos ($57 to $85).

Of the seven refrigerators Gandara bought, only one operated when plugged into an electrical outlet. But Roberto said Juan did a good buying job because he brought back popular items.

The merchandise included brand names such as older-model General Electric refrigerators--”The newer ones don’t last long,” Gandara said--O’Keefe & Merritt stoves and “solid-state” televisions.

“We don’t have many parts in Mexico, and the supply of television tubes is limited. But with solid-state you use transistors, and we can get those,” Gandara said.

In fact, second-hand U.S.-made goods are preferred in Mexico and considered a status symbol because of their superior craftsmanship, according to the vendors at Los Globos.

Mattresses in Mexico are not as firm and “just don’t last,” said Gandara. And, he said, Mexican appliances “want to fall apart after two years” and parts are hard to come by.

In clothing, “it’s a different world,” said Virginia Rodriguez. “The bottom line here is price,” she said, as she and her husband, Oscar, unpacked a camper full of clothes bought at Goodwill Industries in Santa Ana.

“Cotton clothing is a favorite down here. So are men’s pants and children’s clothing,” she said.

T-shirts in Rodriguez’s shop were selling for about 25 cents, dress shirts for $1.35 and blouses for $1.50.

“There are people who can’t buy new things because they just can’t afford buying at major department stores like Dorian’s,” she said.

“For the price of a new shirt at a department store you can buy 30 shirts here. The price is everything.”