Over my twenty-two years in the fixture liquidation industry, I have had the opportunity to observe the best and worst practices observed by many companies in our industry.  Many auction and liquidation companies take advantage of supermarket operators by “retaining” the scrap rights to their stores.  If you are one of these companies have you ever asked if that makes sense?  I would suggest that it does not!

If you are overseeing supermarket liquidations you should be educated on what the potential scrap value in your closing location may be worth.  A general rule of thumb would be that supermarkets have around 1000 pounds of copper per every 10k of your location.  Newer stores will have less.  Older locations will have more.  Also, if your frozen doors are further away from your motor room it will be higher yet.  For example, the typical fifty thousand square foot supermarket could have between 4000 and 8000 pounds of copper.  With copper prices hovering around 3.50 that means a value of $14,000 to $28,000!  And that is JUST the copper.  When you add in the motor room, the roof-top condensers, the evaporators from the walk-ins, and the various case scrap you are looking at scrap-value of over $25,000 upwards of $50,000! If your store is larger your scrap return could be much higher!

With that type of return, you should be reviewing your agreements with your current auction and liquidation provider!  If their agreement states that your auction company will “retain the salvage refrigeration copper in the premises as compensation for the post-auction removal and rigging services”, you need to review it.  The “post-auction expenses on most locations should not exceed $20-30k depending on the age of the location.  Also, keep in mind most auction companies charge the buyers back as a “rigging fee” for most of these expenses as well.  That means they are double-dipping on the expenses!!

At Surplus Asset Management and SAM Auctions we look at this differently.  We are always open and transparent with our clients.  Most of the other auction companies agree to work for little to no commission, however,  they will always “get theirs”.  They “get theirs” by charging the buyers for the removal expenses and then take your scrap value as well.   At SAM we offer to take the rigging invoices and the scrap proceeds and put it on the top line of the sale.   Or if you prefer the old school way of tracking scrap and expenses we can do that also.  Our full transparency allows you to benefit from all of the various revenue from the sale of your assets.  At SAM Auctions you pick how you would like to have the scrap metals applied to the sale!

If you would like more information on how SAM Auctions can best help you get the absolute best return for your assets please call or email today.

Scott D. Hoek