GL's New Contract

[NEIOWA]

There is a new contract that started in Dec with Liquidity Services (govliquidation.com) selling nonrolling stock equipment. Iron Planet won contract to take over anything with wheels. You'd have to get into the weeds on the details of the old or new contract terms to find the particulars regarding operation of a retail store. Appears as soon as they take possession of the surplus equipment they OWN it.

http://www.marketwatch.com/story/li...non-rolling-stock-surplus-property-2014-07-30

Under the terms of the new contract, Liquidity Services will pay DLA approximately 4.35% of DoD’s original acquisition value (OAV) for all items referred, including an upfront payment of 0.5% of the OAV and a backend payment of 3.85% of the OAV after 120 days. Liquidity Services will retain 100% of the profit from the resale of the property and bear all of its costs for the transport, storage, merchandising and sale of the property. DoD usable non-rolling stock surplus property will continue to be offered for sale through Liquidity Services’ online auction marketplace, www.govliquidation.com.

 

[gem1410]

GL also lost its other giant account 2 weeks ago--Walmart---Walmart dropped GL due to noncompliance of contract----Bet GL tried to treat Walmart the way they treat us when we had a problem----

 

[FloridaAKM]

Do tell, thanks for that bit of information. Walmart does not care who your company is; do business their way or go home... they have that clout!

GL also lost its other giant account 2 weeks ago--Walmart---Walmart dropped GL due to noncompliance of contract----Bet GL tried to treat Walmart the way they treat us when we had a problem----

 

[Tinwoodsman]

Do tell, thanks for that bit of information. Walmart does not care who your company is; do business their way or go home... they have that clout!

Ican attest to that first hand.

 

[Monkeyboyarmy]

You think that Walmart got tired of fixing passenger doors and rear drive shafts too?

 

[gem1410]

Press release Dec 1 2014------WHAT'S NEW: Liquidity Services reported after Friday's market close in a regulatory filing that Wal-Mart had decided to stop supplying products to Liquidity Services.The auction company noted that it had previously had the right to purchase certain consumer items that have been removed from Wal-Mart's shelves. However, Wal-Mart, on December 1, reported to the company that it would terminate the deal, effective today. Wal-Mart is alleging that Liquidity Services violated certain requirements of the agreement between the companies, Liquidity Services stated. However, the auction company disputed Wal-Mart's assertions and said it was "evaluating all its options" before determining how to proceed. Liquidity Services indicated that it still expects to meet its guidance for its December quarter results.

 

[rhurey]

So what were the old terms?

 

[rhurey]

Went looking. In 2008 terms were:
"Under the terms of the new contract, LSI will pay DoD approximately 3.26% of the DoD's original acquisition value (OAV) for all useable surplus items referred and LSI will retain 100% of the profit while bearing its own costs for the merchandising and re-sale of these items. Payment for the property will be made in two steps in which approximately 2.26% of the OAV will be paid upfront and 1.00% will be paid 120 days after LSI's receipt of the property. DoD useable surplus property will continue to be offered for sale through LSI's online auction marketplace,"

So their costs to DOD just went up 33% but their payment schedule has them not fronting anywhere near as much money.

 

[MississippiRifle]

That's all fine and good but to be honest I have found since IronPlanet took over the prices on the items have skyrocketed pushing most small time guys out of the market. Oh well. At least I got some good while it lasted

 

[m16ty]

The whole surplus market has been moving to more of a retail market in the last few years. With GL's on-line store and the way GP is marketing the rolling stock, they are both going after the retail market.