By Daniel Malloy
The Atlanta Journal-Constitution
---- — ATLANTA — 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.
GovDeals, the contractor, says expanding the pool of bidders beyond those who could show up in Atlanta will bring in more money for the cash-strapped Postal Service. 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.
Roger Gravley, the company’s vice president of client services and marketing, said GovDeals auctions 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 an item at a time rather than in huge parcels.
Currently, the items are arranged in large lots, not sold individually. Wares at February’s auction 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.”