Seattle’s government surplus is a cut-rate gold mine for resellers

Once or twice a month, Wangi Mugenyi parks his secondhand pickup at the city of Seattle surplus warehouse in the Sodo neighborhood, where the city sells its various castoffs, and searches for his next big deal.

The cavernous space is mostly filled with chairs, desks, filing cabinets and other bureaucratic jetsam. But Mugenyi knows there occasionally are also higher value items — a retired parks department lawnmower, say, or a worn-out compressor from Seattle Public Utilities — that the truck driver and self-taught mechanic can repair and ship off for resale in his native Uganda.

“People want American stuff, I’m telling you,” said the trim, affable 60-something who works out of his garage in Lynnwood.

Mugenyi is a reseller, one of a small community of entrepreneurs who comb the Greater Seattle area for pre-owned goods that can be fixed up or parted out and sold for a profit, often overseas. 

Though resellers frequently buy from private sellers, the surplus goods that public entities, from federal agencies down to cities and school districts, offload at regular intervals are the gold standard in the secondhand world.

Resellers like government surplus not just for the prices — typically a fraction of what the stuff originally cost taxpayers — but the quality and transparency as well.

For example, government surplus vehicles, of which Mugenyi has owned several, often come with a maintenance history and sometimes even spare parts. 

With private sellers, “you don’t know what they’re throwing up there,” said Mugenyi, who reckons government surplus accounts for 60% or more of his inventory. “It’s my No. 1 source.”

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Surplus enterprises like Mugenyi’s aren’t new, by any means. After the Second World War, the federal government formalized a system to offload its excess inventory to other agencies as well as to the general public.

Exact figures are hard to find, but a 2005 congressional report indicates the federal government alone was at that time disposing of $20 billion annually in everything from office equipment to full weapons systems.

State and city governments, school districts, libraries, public universities and other governmental entities have their own surplus systems. Most run according to a combination of budget cycles, maintenance and depreciation schedules, accounting rules and plain old obsolescence. 

Some of that surplusage is sold by private surplus retailers. But much gets sold directly to the public, though often with help from intermediaries like GovDeals.com.

The end result is like a vast, taxpayer-subsidized garage sale, much of it online, with the scale to rival most commercial retailers and the variety and sheer weirdness of a midcentury curiosity shop.

Earlier this month, for example, you might have bid on a 17-foot fiberglass canoe (starting at $20); a towable 20-foot climbing wall ($2,500) and four racks of bowling balls, in various sizes ($200), among dozens of other surplus items at the Navy Northwest Region facility in Silverdale, Kitsap County. 

At the state’s Enterprise Services Surplus Operations retail store, in Tumwater, Thurston County, bargain hunters could choose from knives, corkscrews, pool cues and other items that have been confiscated by airport security.

And for the hard-to-please folks on your holiday list, the UW Surplus Store, on 25th Avenue Northeast, just east of the University of Washington, is your go-to source for such finds as used dorm furniture, spare graduation robes, hospital beds, lab glassware, even medical equipment. 

The latter category drew Seattle-area neurologist Erik Armitano, who recently bought a used portable electrocardiogram machine for his new clinic in Mountlake Terrace. The $170 he paid is around a tenth of what the device would have cost “out of the box,” he said. With all of the costs of starting a new medical business, UW’s surplus “has been really helpful,” Armitano added.

Indeed, for all the oddball one-off items that end up going viral — the school buses, the high school football scoreboard, the 120-foot-tall municipal water tower (no delivery) — government surplus can be a gold mine. 

Since 2019, bargain hunters have purchased nearly 8,000 surplus vehicles from the state of Washington for an average of $5,600 each.

Startups and nonprofits have furnished entire offices for next to nothing from the city of Seattle’s surplus, where 24-inch computer monitors can be had for $25, filing cabinets cost $10 a drawer and swivel chairs start at $5. Compared with retail, “it’s pennies on the dollar,” says Mike Wong, who manages the city’s surplus operations.

Government surplus operations often allow nonprofits, schools and other government agencies to shop for free or at discounted prices. They also give priority to their own colleagues: Much of the stuff at the city warehouse, for example, winds up back in another city department. One of the UW Surplus Store’s biggest customers is the university itself.

Resellers don’t get any special treatment or discounts, even though they often seem to be government surplus’s most loyal customers. The city warehouse regularly sees 10 to 20 resellers, Wong said. The UW store has half a dozen or so, said Becky Ryser, UW surplus retail supervisor.

“They all very much have their own specialty areas, whether that be office furnishings, vintage furniture, retail fixtures and things of that nature,” Ryser said. “Sometimes they’ll buy one thing, sometimes they’ll buy 20 things.” 

Mugenyi, a regular at both stores, has flexible interests. He said he started sending surplus to Uganda shortly before the pandemic, filling 40-foot cargo containers that he shared with partners with everything from bicycles to a disassembled bulldozer.

His current specialty is powered equipment: generators, mowers, compressors and pretty much anything else with a motor. “So long as it’s a machine, I’ve got a market for it,” said Mugenyi, who arrived in the U.S. in the early 1990s.

Resellers like the city and UW stores for another reason: in-person shopping. A lot of government surplus is now sold only online or with scheduled appointments, especially since the pandemic. But bargain hunters can still enjoy full retail immersion at the city warehouse, 11 a.m.-4 p.m. Tuesdays and Thursdays, and 10 a.m.-4 p.m. Tuesdays at UW.

The UW store also has a digital storefront. The city sells its surplus vehicles exclusively online, Wong said, and warehouse items are “strictly cash and carry.” 

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The government surplus business has been uneven lately. While state surplus vehicle sales topped $10 million last year, up 74% from 2019, state figures show, city vehicle sales fell around 24%, to $1.4 million, in the same period, and city warehouse sales fell by nearly as much.

Part of that decline reflected pandemic closures. Staffing shortages slowed the processing of the city’s incoming surplus inventory, including hundreds of computers whose hard drives must be digitally wiped before resale.

The warehouse has also seen fewer of the startups that used to buy a lot of the city’s hand-me-down office furniture, perhaps due to the current economic uncertainty. “There’s not as many businesses opening,” Wong said. 

Still, the city’s surplus fortunes could be turning.

So far this year, total surplus revenue is on track to beat 2019. Sales will likely jump further in June when more of the city’s surplus computer inventory — currently in excess of 500 — hits the shelves. Laptops will go for $50 to $150 and initially will be limited to two per customer per day.

The city may also see more business from resellers like Mugenyi, who said demand has surged in the past three years.

Customers in Uganda want more tools and equipment, including lathes and water pumps. Motors, such as the 8-horsepower engines Mugenyi stripped from recently purchased city leaf blowers, are also in demand.

He is also getting more requests for larger equipment, such as tractors and construction vehicles, especially older models that are easier to fix.

“They’re asking me for bigger stuff now, like a dozer, like a backhoe, like a grader,” said Mugenyi, adding that some of the proceeds go toward a trade school he is trying to build a few hours outside of the Ugandan capital of Kampala. 

The main barrier for this burgeoning trade, Mugenyi said, is finding the funds to make such large purchases, especially since the expense must be carried several months before he gets paid. Though he hopes to gain such capacity eventually, for now he’s sticking to smaller, more manageable surplus items while making ends meet with part-time work at a commercial warehouse. “I’m growing, but at a slow pace.”

Mugenyi isn’t the only Seattle-area reseller with global ambitions. Although the city doesn’t formally track where purchases wind up, many of the warehouse’s regulars appear to have overseas customers, Wong said.

“It might be ‘surplus’ here, but some of this stuff is still pretty valuable once it hits the developing world,” Wong added. “It’s pretty amazing, the network they’re building for this stuff.”

Mugenyi, in turn, appreciates the no-waste philosophy he finds at many government surplus operations, which contrasts with much of America’s throwaway culture but resonates deeply in places like Uganda.

“In most developing countries, we don’t throw anything away,” Mugenyi said. “We recycle.”

On a recent Thursday, Mugenyi was putting that theory into practice at the city warehouse. The stack of fire hoses he’d just purchased are too worn to withstand highly pressurized water, he said. But they’ll be more than adequate for irrigation on a Ugandan farm. 

“It may leak somewhere, but we’re used to that,” Mugenyi said. “We can patch it.”