Looking for a steal this holiday shopping season?
Log onto PropertyRoom.com, a Web site which auctions stolen property that law enforcement agencies were unable to return to the rightful owner. The auction is run much like eBay, and its product mix is arguably just as eclectic. Thanks to the criminal mind, the inventory, unfortunately, is endless. Stereos, guitars, laptops, jewelry, bicycles and designer clothes are all available for a fraction of the original value.
According to Deborah Souza, a property clerk for the Milpitas, Calif., Police Department, “My ultimate goal is to release what I can back to the owner/ victims. However, when I am unable to determine ownership, or the items are otherwise unclaimed, I send them to PropertyRoom.com.”
The Mission-Viejo, Calif.-based company was founded in 1999 by former police officers, who visualized a profitable Internet solution for a longstanding problem – what to do with recovered stolen goods that went unclaimed and were spilling out of police evidence rooms across the country. PropertyRoom.com now works with more than 1,800 law enforcement agencies. The roster includes police departments in New York City, Seattle, Los Angeles, Cincinnati, Indianapolis and Albuquerque.
A relatively small department like Milpitas P.D. - a client since 2001 - averages about $5,000 a year in auction revenues, Souza said. Company-wide, PropertyRoom.com posted $33 million in transactions for 2008, the first year the company turned a profit.
“For a lot of companies, this has been a rough two years,” said PJ Bellomo, CEO of PropertyRoom.com. “But we’ve set revenue and profit records.”
A quick visit to the site shows the range of products and deals:
A Canon Powershot A530 digital camera for $55. Amazon.com lists them new at $299.95.
A 2004 BMW motorcycle appraised at $8,600 is up for auction at $4,000.
Forty-five bidders are vying for an Apple MacBook laptop starting at $345. It retails for $999.
A Trek 1000 mountain bike is going for $136. New, it’s about $630.
Looking for bling? A brand-new stainless steel Ed Hardy panther pendant “with Cubic Zirconia accents” has bids starting at $27.
Sixty-six bidders are after two 19-carat diamond Victorian clips appraised at $30,000 and going for $7,156.
Martin Focazio stumbled onto PropertyRoom.com while searching the web for an item he wanted to buy.
“I have purchased mostly small computer equipment - routers, networking hardware," said Focazio, of Bucks County, Penn. "I also buy professional music equipment, microphones and such. I like PropertyRoom because they have great prices, an easier checkout than eBay, and a more interesting mix of stuff for sale.”
Potential bidders can choose from fine art, full-length fur coats and silver or gold watches for men and women. Fashionistas can bid for name-brand designer pieces by Valentino, Ralph Lauren, Oscar de la Renta and Calvin Klein.
All items are tested and appraised, and unlike most other auction sites, the company offers a merchandise return program. The Web site also features a nationwide registry to help facilitate the recovery of lost or stolen property. Called "Steal It Back," the registry allows the public to register property serial numbers for free.
“We usually send [PropertyRoom] our jewelry - since they appraise it - and things like high-end Coach purses,” said Robin Neal, property officer with the Fremont, Calif., police department. “My experience of them is that they are very honest with the condition of the item they put online. We have also had officers who work for our department utilize the site for purchase and were very happy with it.”
Count Tamara Mickelson among its fans. A deputy sheriff for Sacramento County, she found out about PropertyRoom.com “through work.”
“I bought watches and jewelry,” Mickelson said. “I bought a nice ring for my two-year-old daughter and am saving it for her until she turns 18. I love that site.”
Before PropertyRoom.com, law enforcement agencies had nowhere to turn for professional help with tracking and storing auction inventory as well as conducting live auctions. The site filled that void and today acts as a service business, taking over the complicated process and freeing-up space in crowded property rooms.
Boulder, Colo., police started using PropertyRoom.com in 2007, mainly to unload property that couldn't be traced back to the owners. Before items are put up for auction, they are posted on the police department’s Web site for four weeks. Previously, the department had been stuck holding onto items for up to three years, said spokeswoman Sarah Huntley.
"We understand the problem, and we created a company that's a solution to the problem,” said PropertyRoom.com founder Tom Lane.
Lane is a former Long Island cop- turned-investment-adviser who said he founded the company after watching then-fledgling startups such as eBay and Amazon blossom into blockbuster money-makers. Bellomo, an e-commerce veteran, joined the company in 2006 as chief operating officer, and took over as CEO 14 months later.
“By combining hands-on Internet commerce experience with the depth of law enforcement expertise we already possess among our founders, we now have the management team in place to ensure our successful growth,” Lane said.
The Web site now boasts 750,000 page-views and 30,000 unique visitors a month, earning it the No. 279 ranking in the Internet Retailer Top 500 Guide to Retail Web Sites.
The company, with 90 employees, runs a national fleet of leased trucks from warehouses in New York, Florida, Illinois, California and Washington. The truckers make monthly rounds of client police departments, picking up merchandise for auction.
With all its clients, PropertyRoom.com uses the same progressive revenue-sharing model. The higher the winning bid, the higher the percent that goes back to the city where it came from.
The nearly 18,000 law enforcement agencies in the United States offer PropertyRoom.com plenty of room for growth. But, Bellomo said the company is tapping into other opportunities, as well.
"As our police business has grown, we've been approached by other liquidators," Bellomo said. "This downturn has put 3,000 brick-and-mortar retail stores out of business. There is distressed merchandise all over the United States. Brand-new jewelry and watches, authentic sports memorabilia, fine art. Liquidators are coming to us and saying, 'Can you work with us the way you work with police agencies. Can you turn this excess inventory into cash?'
“So we're expanding," he said. "The police business is always our core business, but we've been able to take the same format and expand on it for our customers.”
(Rob Reuteman is a Denver-based freelance journalist, formerly business editor of the Rocky Mountain News.)