Though the closest location to us was Chicago, we went to Sunnyvale. Sun’s terms of sale for the auction were certified check upon pick up, wire transfer or credit card. We were prepared; I negotiated with American Express an Eight Hundred Thousand ($800,000) line of credit and had a letter signed by them including a phone number should anyone have any questions. We bid and bid, we had half the room looking at us, there were no minimums, the “unused” Sun Systems sold for 10 cents on the dollar…it felt like legal highway robbery.
We spent all $800k, and when it was over we walked up in our casual clothes and cowboy boots and handed them a credit card. The looks on their faces were hilarious; managers called their managers; a VP of Finance came down to manage the scene. We handed them our letter from American Express. They of course called American Express who confirmed we were legit. The Sun team couldn’t believe it. We had also prepared to have North American freight standing by to pick up our winnings; over the next several days we sent four semi’s out of their warehouse packed front to back. We of course supervised every bit of it.
We were in the Sun business now; we had 30 days to pay down the American Express or to start paying some big interest amounts. The day after we owned the systems, we had the rest of the company back at RAVE dialing for dollars offering unheard of deals with COD or check with PO terms. We started calling around the Midwest because anyone that was paying COD, we rented a UHAUL and personally delivered it — at one point we had five drivers on the road. We did it! We not only paid off our bill within 30 days, but we still had half the equipment we purchased at auction left to sell. Our unheard of deal pricing went away – now we sold the systems at market prices, and we had sold all of it within six months.
That was the last Sun auction, but it didn’t solve their original problem and, they started accumulating systems/products again. They came up with a new strategy which created a huge opportunity for RAVE. But it didn’t come easy. Learn more in our next newsletter.