Ryan Downs is the president and CEO of Proxibid, an online platform that offers customer service and support, and a robust risk management system, designed to ensure buyers and sellers are safe when transacting online. Since joining Proxibid in August 2010, Downs has been responsible for driving the strategy, vision and mission for the company. Downs joined Proxibid from eBay, where he served most recently as senior vice president of worldwide operations for PayPal, eBay’s payments division. Visit proxibid.com.
Increasing activity in three key economic sectors—construction, agriculture and manufacturing—is driving demand for a wide variety of heavy vehicles and industrial equipment in the United States marketplace.
However, due to an uncertain and competitive business environment, buyers and sellers alike are concerned about getting the most value out of every transaction. Thus, a growing number of auction participants are utilizing online sources to find better deals on heavy equipment.
As a seller on an online platform, here’s what you need to know about these B2B sectors and how to capitalize on current economic trends to increase your bottom line.
Strong Construction Growth Raises the Challenge of Inflation
Supply and demand are both strengthening in online construction equipment auctions, driven by expectations of continued growth in the sector. Total U.S. construction spending in 2016 exceeded $1.1 trillion, an increase of 4.5 percent from 2015. Analysts expect growth to remain strong , noting that architectural billings, a key indicator of upcoming building activity, surged in early 2017.
Construction economist Ed Zarenski predicts construction spending to increase about 6 percent in 2017, but construction inflation will also increase by at least 4 percent—producing net volume growth of up to 2 percent. In his analysis of industry spending from Q1 2014 to Q4 2016, Zarenksi emphasized the importance of considering inflation when examining trends in construction activity. During that 3-year period, total annual construction spending increased 22 percent from $960 billion to $1.17 billion. However, after adjusting for inflation, construction volume only increased by 9.4 percent.
While economic activity increases, costs will also rise rapidly over the same period. To ensure margins also increase, it is critical for buyers to find ways to keep costs low by getting the best available price. Many buyers turn to auctions to find those unbeatable deals to stay ahead of their competition.
U.S. Agricultural Producers Benefit from Growing Trade Surplus
Finding the right agricultural equipment at the right price is often a challenge, especially at a time when American agricultural exports are growing. According to the U.S. Department of Agriculture , exports totaled almost $130 billion in 2016—and exceeded $1 trillion over the 8 years spanning 2009 to 2016.
In 2017, U.S. agricultural exports are expected to reach $134 billion, driven by growth in dairy, livestock, grains and corn. At the same time, imports are expected to decline by $1 billion—widening the U.S. agricultural trade surplus to $21.5 billion.
Strong growth in export volumes will keep American farmers, ranchers and other agricultural producers busy in 2017—and necessitate repairs, replacements and other investments in machinery.
Leveraging Online Platforms to Find Savings
As the demand for equipment rises, the associated rise in cost due to inflation can lead to sticker shock for many buyers. Given the need to stay ahead of rising costs, the secondary market will continue to benefit—buyers have the capital and urgency to make purchases, but do not want to pay top dollar for new machines.
Buyers also turn to the internet as a valuable resource for research and price comparison. When it comes time to sell your equipment, it is important to provide all pertinent details of an item. When comparing two similar items across platforms or auctions, the buyer will be more apt to purchase an item with a full description, photos and disclosures, rather than taking a chance on an item with unclear details. Providing a thorough description can be the difference maker in a purchasing decision.
In the age of instant purchase and 2-day shipping, the culture around buying online has shifted. Providing strong customer service, fast shipping and order processing can turn a one-time buyer into a repeat customer. Work with an online platform that offers top notch customer support and a sophisticated risk management system that provides consistency among sellers. Remember, there is a special kind of relationship all sellers can build with their online customers. The most successful sellers are those who are dedicated to meeting buyer expectations. Providing consistent, fair and timely service is a hallmark to exceptional sellers. Be sure you work with an online platform that shares this core value.