The Surplus Kings

The cigar-chomping kings of a somewhat mysterious industry gathered in the New York Trade Show Building last week, unrolled their duffel bags, and pulled out what was possibly the most overwhelming assortment of white elephants ever assembled under one roof. There were old ammunition cans and "slightly used" jungle shorts, cordless electric blankets and rubber ripple mats, as well as powder horns from Germany and inflatable snakes from Japan. The occasion: the 15th Trade Show of the Institute of Surplus Dealers.

Essentially scavengers, the dealers--who supply 9,000 surplus stores from coast to coast--hover around military stockpiles and private industry warehouses, buying up obsolete and overstocked goods at a fraction (5-7%) of cost. There is plenty to go around--and not just leftovers from the last war. The Government alone last year unloaded $2.1 billion worth of "usable property." Under a house-cleaning policy recommended in 1955 by the Hoover Commission, it plans to scrap even more in the years to come. The supply seems inexhaustible; the military services often buy too much or find a product obsolete, or simply clean house of products that deteriorate in storage. By combining patience, fortitude and ingenuity, the 15 major dealers turn the Army's loss into sales of some $75 million a year.

Useful Garbage. Dealer Sam Greiff, who last year bought 2,120,000 surplus Zippers for $120,000, is slowly making a killing by selling them at cut rates to jacket manufacturers, is known in the trade as the Zipper King. Greiff has just bought 400,000 Army coat fronts (stiffening material for jackets) for $15,000, is now also known as the Stiffened Coat Front King. In a world where everyone is a king of some product, the king of kings is Eddie Tarashinsky, 43, whose father pioneered the surplus business in 1904, and whose twelve New York warehouses are crammed with everything the Army has been trying to get rid of for years--Spanish-American war sabers, Civil War epaulets, 4,000 gas masks for horses.

"We take garbage and make it acceptable to people in the street," Tarashinsky explains. "We take a nylon parachute and dissect it just like a butcher takes a cow apart. We use it all." In late 1959, Tarashinsky bought 200,000 surplus ammunition cans from the Army for 12-c- apiece. He found few takers until he discovered that the handles tilted to make an excellent shoe rest, so he peddled them as shoeshine stands, sold 196,000 to one customer for 20-c- apiece. "I'm known as the king of the ammo cans," says Tarashinsky.

Slow Profits. Profits do not always come immediately. Nine years ago, Tarashinsky bought 30,000 left-foot shoes for 14-c- each, stored them in a basement while he searched for a buyer. After seven years he got an offer from an Italian dealer who had bought a quantity of right shoes, sold out for 50-c- each.

The industry's greatest problem is supply. There is no continuity to merchandise. Once the Government has sold out its surplus coats, packs, etc., there may be no more of them for years. To fill the gap, some dealers buy from foreign armies, and more than one has taken to manufacturing his own "surplus-type" equipment. New York City's M. Rubin & Sons, Inc. is turning out hunting jackets, ski jackets and insulated underwear and finding a ready market for them, has even started making parkas for Macy's. "We are the most ingenious people in business," says Tarashinsky. "You find people crazier than we are, but not many."

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