There are the book people, the jewelry people, the movie people, the electronics people. They greet each other with knowing nods as they inspect the goods inside a cavernous warehouse on the west side of Atlanta that is the end of the line for undeliverable mail.
Once a month the United States Postal Service auctions off the valuable stuff it cannot deliver at Atlanta’s Mail Recovery Center. But at a time of rapid change for the Postal Service, last month’s live auction was one of the last. The Postal Service is contracting out the auctions and moving them all online as soon as April.
“I know you guys will enjoy that better than coming down here and seeing my ugly face,” quipped Lionel Snow, the head of the Mail Recovery Center, as the crowd playfully booed back. One man replied, “You’re a very handsome man.”
It is unclear whether the MRC will shed space and jobs as a result; a Postal Service spokesman declined to comment on that topic. Regulars at the monthly auctions, meanwhile, will likely face higher prices and lose their ability to inspect the goods in person.
“It’s a shame,” said Cathy Pettay, of Roswell, a 15-year auction-goer. “I think it’s important to see the merchandise.”
GovDeals, the contractor, says expanding the pool of bidders beyond those who could show up in Atlanta on a Wednesday morning will bring in more money for the cash-strapped Postal Service. Roger Gravley, the company’s vice president of client services and marketing, said GovDeals auctions in the past have shown a 20 percent to 40 percent price increase over live auctions. A subsidiary of Liquidity Services, Inc., GovDeals contracts with 5,300 governments to sell their surplus.
After GovDeals’ 15 percent cut, that would leave an estimated 5 percent to 25 percent gain for the Postal Service. The Mail Recovery Center brought in $7.8 million in revenue in 2011. With those numbers, the USPS would stand to gain between $390,000 and $1.95 million per year.
The USPS could be missing out on even more money. A company that lost the auction bid said it could bring in an additional 20 percent by selling the merchandise individually rather than in huge parcels.
The Postal Service has much bigger problems, of course. The semi-private institution loses $25 million per day, according to Congressional testimony by Postmaster General Patrick Donahoe. It recently announced plans to stop delivering first class mail on Saturdays to save money.
Just as the age of email has transformed letter delivery, so has the age of eBay changed the ways of what was founded in 1917 as the “Dead Parcel Post” office. The Atlanta Mail Recovery Center is now the only such facility in the nation, with a mission to seek out, recover and return mail that cannot be delivered.
It is the only place where USPS personnel are allowed to open your mail, as employees sift through it for clues to the rightful owner’s identity. In 2011 — the most recent year for which figures were available — the MRC handled 53.4 million pieces of mail, 10.6 million of which had possible value.
It was able to deliver 43 percent of the mail, while the rest was recycled, given to charity or sorted for auction — after a 90-day waiting period in which the owner could state a claim.
The items are arranged in large lots, not sold individually. Wares at February’s acution included a basket of keys, a sports memorabilia wall that included a signed Larry Bird jersey and a crate of shoes. A musical instruments display that sold for $4,600 included 13 guitars, two bass guitars, bongos and keyboards.
Reality television shows like “Storage Wars” that popularize auctions brought more people to the auctions and have driven up prices, said Andrew Saenz. The 28-year-old Saenz bought a giant bin full of VHS tapes for $150. He sells three for $1 at The Secret Game Shop in Douglasville.
GovDeals plans to run the auction in a similar fashion, with the large parcels catering to resellers.
“We do have the option to break down lots if based on experience we feel this will result in increased revenue,” Gravley said. “Our past experience with large amounts of one commodity show us that large lots sell better and result in better net revenue over small lots or single items.”
GovDeals, based in Alabama, plans to keep the distribution local. Gravley said the company plans to hire five people for a new warehouse in Atlanta where bidders can pick up the goods, near the Postal Service location where they do now. Gravley said the company is exploring ways to ship the lots to successful bidders rather than make them pick up in person.
The lots can be enormous. The first two items on the docket last month were tractor trailers full of books.
A ponytailed gentleman who declined to give his name picked up both for a combined $161,000, griping that the auctioneer counted up too fast and recorded his bid $1,000 too high. There was no time to quibble, as bidding moved immediately to a crate of electronics.
About 200 people packed the room, bidding on 331 lots over the course of about two hours.
As the auction stretched on, people started dropping off their wooden paddles and filtering out of the room. Some waited at a window to pay for purchases. Others left empty-handed.
Jason Goldman of Dunwoody headed to the back to retrieve a bunch of textbooks. He resells them online, but avoids eBay, which he said unfairly favors buyers over sellers in complaints. A nearly 30-year veteran of the mail order business, Goldman has figured out what he can flip and for how much.
Goldman had a little gleam in his eye as he chided an interviewer for not bidding at the auction. Every item purchased is a gamble: You never quite know what is in the bin and how much you will end up reselling it for.
Bidders cannot touch the MRC merchandise before they buy it. The Postal Service asks bidders to return any counterfeit items they buy to be destroyed. There are no refunds.
And that’s part of the allure.
“It’s the most fun you can ever have playing with your future,” Goldman said.