Buying stolen goods on a regular basis has now become a part of life for few wholesalers, retailers and few other savvy consumers. This was all made possible because of the online auction site PropertyRoom.com which was founded in 1999 by former police detective Tom Lane.
This site sells lost or stolen merchandise which the police have been unable to return to their owners. The total value of the published items came to $34 million in 2008 – and almost 40% of the amount came only from watches and jewelry.
The Chief Executive Officer P.J. Bellomo said, “We’ve been flying under the radar for years and only started growing significantly in the past two or three. We’re the McDonald’s of jewelry outlets, and McDonald’s is thriving in the current economy, so maybe it’s no surprise that 2008 was the best year in our history.”
There are a few municipalities around the country who are using the online auctions to serve the wholesale markets by selling heavy equipments which they no longer need. They are trying to sell items like backhoes, bulldozers, etc. but the main business of the site Property Room.com is through profit-sharing partnerships with law-enforcement agencies. These agencies help with monetizing the lost and stolen goods by holding auctions in parking lot which results in poor attendance and earns very low price deals.
Bellomo says that the auctions run by the agencies would bring back only 25 percent of wholesale, minus the expense of advertising and paying the auctioneer. He also said, “Those who really make out, in those [type of] auctions, are pawnbrokers and savvy jewelers.”
Property Room.com is set up with the intention to entertain both wholesale as well as the retail buyers. The former can be counted on to bid an item up somewhat and the retail customers then buy the piece at a high wholesale price but at a very low retail price.
“We discourage reserve prices, because we get better prices with no reserve,” Bellomo says. “Our clients can insist on a reserve, but they do so maybe once in 3,000 auctions.”
Property Room.com’s advertising budget is tiny, Bellomo says. However, the site is well-indexed with major search engines and is well-publicized by the mainstream media. To know the latest availability of certain types of merchandise items the customers can sign up and they will be notified once the items are available.
To keep few security measures in place the Property Room.com has no brick-and-mortar store and doesn’t publicize the location of its warehouses. Physical pickup is allowed for expensive-to-ship items, but not for jewelry.
The company also has a graduate gemologist on staff, who assesses and appraises pieces with a probable resale value of $500 or more and issues a grading report for higher-end gemstones. Top-brand watches are sent to the experts for identity verification, and the company destroys all fake items and documents everything. If a piece turns out to be a fake one and not as advertised then the buyer can return it for a refund.
Bellomo said, “It’s happened maybe eight times that someone has claimed an item that was lost or stolen, and if the facts bear the claim out, the piece is returned free.”
The traffic at Property Room.com has increased to 30 percent over 2008, averaging 30,000 impressions daily, which includes from 22,000 to 25,000 unique visitors, Bellomo estimates. The company alo employs about 70 people nationwide, including truckers with regular monthly runs. About 1,400 law-enforcement agencies in 47 states have signed up with Property Room.com so far. “That’s out of maybe 9,000 agencies that would be big enough to do business with us. So far, we’re doing well, but we’re not celebrating yet, “Bellomo says.