Not a new phenomenon, to be sure, but one which is coming into its own, and which every self respecting geek should be well aware of. With the slowdown in the New Economy, dot coms are going under in record numbers. This has created buying opportunities for the discerning geek like never before.

The trick is finding them. Living in Sillicon Valley is best, but you can be sure that there will be large and fruitful auctions in the near future in Seattle, in Boston, in Dallas and probably many more wannabe tech hubs. Cowan Alexander is a auction house which is hosting many of these. Three or four a month, lately. And some of these auctions are consolidations of multiple dot coms. It's a geek's dream come true.

The first important thing to do is go early. You want to identify what hardware you're actually interested in, and this is the only opportunity you're going to have to really look it over.

Second, do not be dismayed by how many people are looking at the merchandise. The vast majority of these people will leave in the first hour or two of the auction. And anyway, lots of them are idiots who have no idea what anything is worth. They are going to go broke bidding each other up on 386s in the first 45 minutes. Don't worry about it.

Third, realize that What You See Is What You Get. If you want to make sure something works before you blow a grand on it, DO SO NOW. I'm not going to elaborate on that.

Fourth, before you go to the auction, identify from the catalog all things you're interested in. Now go to eBay and find out what that item is selling for. Come up with a number you are comfortable paying. Now subtract 15-20% of that number. This number is the highest amount you will bid. Stick to that number as if your life depends on it! It's exceedingly easy to get caught up in bidding. Plus, the amount you bid is NOT THE AMOUNT YOU PAY. The auction house will add around 10% for their take, then add sales tax. This makes the amounts you bid seem considerably smaller than they really are.

The best circumstances for you as a bidder are when there are a large number of identical but pricey items (anything worth more than maybe $200). The bidding will start off and spiral up and up. Eventually some chump will pay more than necessary to have first choice of which particular lot he wants. S/he is dumb. Do not be this person. Then the price will be gradually eased by the auctioneer to sell off the remaining lots. Eventually the lots will be packaged and re-auctioned as large lots. You want to get in just before this happens, if possible. Keep an eye on how many lots are left and use your judgment. It's possible to get items for 2/3 or even less of the original high bid.

These bits of advice aren't particular to dot com failures, but it is a marketplace which many geeks are not aware of. Can you say Aeron chairs for $350? Sun Ultra 60s for $1k? These things happen. I don't know how much longer that will be the case. Catch it while you can.

Dot com auctions are also often good places to get non-geek things like office furniture and supplies. More often than not, your competitors will be other geeks trying to score good deals on mildly used equipment (and usually failing; people will drive the bids up wildly). But dot coms were also known for other examples of conspicuous consumption, so you can walk out with a ream of copy paper for $10, or a few $100 secretarial chairs for $40, or even a refrigerator or microwave for under $200.

If you're going to an auction held by just one company, beware. The smaller companies, especially in smaller areas (like New York, where space has always been at a premium) will sell computers individually, and will rarely consolidate them into lots.

And finally, What You See Might Not Be What You Get. Keep an eye on what you buy. In certain crowded auctions, I've seen people go behind the auctioneer's back and tinker with the equipment after someone else paid for it.


Update 12 April: the events in the above sentence happened to my company: we bought a computer and left it overnight; in the morning, the RAM was missing.

The moral of the story is: Be careful.

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