‘Anyone involved in sports should have crutches on hand in case of an accident,’ the web site reads, advertising three metal crutches being auctioned with an opening bid of $10.
Along with bicycles, computer monitors, CD collections and used sneakers to name a few the crutches, having been recovered by police as stolen goods, are up for grabs on PropertyRoom.com, an online police auction site owned by a recent startup company Property Bureau.
Dubbing his site the ‘Ebay for police auctions,’ the company’s CEO Tom Lane said he feels he has found a competitive edge with his brainchild among the myriad of online auction sites.
Instead of a direct peer-to-peer transaction like most sites, PropertyRoom.com assumes actual possession of the items. Police departments, under contract with the company send unclaimed inventory to the company’s distribution center, where items are cleaned, refurbished and appraised.
This direct inventory system also eliminates fraud, according to Lane, who said purchases are shipped the day after sale, as opposed to auction sites that could take 30 to 45 days to ship. The inventory management system currently has a business process patent pending.
The company also offers 24-hour customer service, assuring customers quality products and speedy shipping.
‘There’s no hiding behind any screen names,’ Lane said.
Although PropertyRoom.com has a significantly smaller market share than that of major auction sites, Lane says 97 percent of the goods on the site are sold at their first appearance. Property Bureau then receives a commission from sale of the item.
All goods are guaranteed authenticity and functionality, Lane gives as another benefit to his site. Employees test the electronics, have antiques and jewelry appraised, and price the items well below their face value.
Items listed on the site range in value from a set of 24 light bulbs starting at one dollar, to a custom-made Harley recently sold for $16,000.
‘There are some strange things,’ Lane said. ‘We get items that we don’t know what they are… but people out there do.’
StealItBack.com, a partner site to PropertyRoom.com, allows victims of theft to register their stolen goods with the site. The serial number of any inventory received is automatically cross-checked with that of the registered goods.
‘It’s the only free database available to consumers to register their stolen goods,’ Lane said.
Based in California, Property Bureau currently contracts with police departments in 12 states, primarily on the West Coast. Two Massachusetts departments, Framingham and Ashland, also sell property through the site.
Chief Roy Melnick, of the Ashland Police Department, said PropertyRoom.com helps them to sell more goods due to the infinite online market. The site typically sells 15 to 20 of the town’s items each month, he said.
‘There are things people are buying [now] that you wouldn’t think anyone would want,’ he said. ‘There’s a market for everything out there.’
Along with the increased revenue from the sale of goods since the contract began in September, online sales also decrease expenses compared to a live auction. Previously Ashland would generate only $75 from the sale of 10 bikes, but would spend a lot in advertising and manpower.
‘To me we weren’t doing our best effort to maximize the dollars going back to the town,’ he said.
Though Lane refused to discuss financial matters, Melnick said the company receives a 50 percent commission of the revenue from auction sales, leaving the rest to the police department. The profit goes directly to a general fund in the town of Ashland as an offset to the tax rate, according to Melnick.
The Boston Police Department still holds live auctions, selling towed vehicles monthly, surplus city vehicles twice per year and general property four times a year. Billy Goodwin, a buyer for its property division, said the majority of the items are bicycles, but the city would consider online auctions.
‘It’s something that we are interested in,’ he said. ‘But if we did do anything, we’d actually go through the city.’
While many large forces still hold live auctions, Lane said his clients are not limited to small departments looking for easy disposal of goods. The company contracts with the Los Angeles Police Department, the third largest force in the country, as well as San Diego and San Francisco.
According to Lane, the heavy concentration of West Coast clients is due to the location of Property Bureau’s only distribution site in California. But he said he is willing to expand his market.
‘In the Northeast if we get a contract, we’ll put a facility in there, and we’ll sell to another 150 to 200 departments,’ he said.
Lane is optimistic about future growth. Currently employing 26 people, Lane said his business plan calls for 25 new processing centers to be built within four years, to accommodate departments in every state.
Lane said he was inspired to start his company after serving for 25 years as a police officer on Long Island. He’d suffered through the ‘thankless task’ of cleaning the property room each year to send items to live auctions. As he studied Ebay’s success, Lane said, he found a flaw in its rationale.
‘They were spending a lot of money on advertising to attract both the buyer and the seller,’ he said.
Lane’s concept requires only attracting the audience of buyers, since company already possesses the inventory.
Forgoing advertising, the company promotes itself entirely through public relations and word of mouth. Melnick said he chose the site after hearing of the Framingham Police Department’s success with it and researching it.
Having been showcased in every major newspaper, Lane said, the company typically receives 500 to 1000 new users after each story is published or broadcast.
In an effort to market directly to police departments, the company is a member of the International Association of Chief of Police, the National Sheriff’s Association and the International Association for Property and Evidence. It regularly sends sales representatives to attend conferences and state conventions.
‘We’ve been around the country for the past three years building business before we even had our first contract and went live,’ Lane said.
After raising funds from friends, family and other ‘private individuals,’ the site opened last February and is already approaching 100,000 registered users. Lane said there is ‘no public market right now’ for companies like his, but may consider going public in the future.
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