Sue McGregor is the managing director of IronPlanet Canada. Avnish Patel is vice president of corporate development and strategy at IronPlanet. For more information, visit IronPlanet.
Now that fleet managers have robust technology at their fingertips, the discussion around fleet disposals has shifted from selling the way it has always been done, to managing fleets over time to maximize equipment value.
Regularly Value Your Fleet
Regular estimates of your fleet's market value accomplish three things:
- Allow you to keep books up to date
- Give you current estimates of equipment that could be pledged as collateral to finance your business
- Enable you to better make decisions about when to dispose of equipment
Using a professional appraisal service to obtain a comprehensive valuation of your fleet will give you a sense of the value of your equipment. The age, mileage or hours, condition, maintenance and repair records and current market conditions all drive how much your equipment is worth and can help you determine whether to sell equipment by auction or some other means of disposal.
Track Fleet Condition
Updating your fleet maintenance records will help you to determine which items to utilize, repair, sell or replace. Frequently assessing fleet condition, in addition to regularly valuing your fleet, may highlight inexpensive repairs that can dramatically increase resale price. If you conclude that serious and costly repairs are needed, there may still be buyers interested in purchasing such equipment. Items with many hours or miles can bring solid values, as long as you have kept thorough maintenance records. Buyers are often willing to buy older equipment and repair it themselves. In particular, make certain that equipment is properly winterized and reflected in your maintenance records. Good records will not only increase the value of your equipment, but also save you time when you are ready to dispose of those items.
Assess Fleet Inventory
It's also wise to review your fleet in light of future projects and decide whether you will need all of your current equipment. Selling underutilized equipment, whether by auction or some other means, will save on maintenance and provide working capital. That cash can be invested until you need to replace that equipment. Keep in mind that regulations vary from country to country. There are buyers in markets around the world who either don't need or aren't looking for the latest technology.
Connecting to worldwide markets will help you get the optimal price for your used equipment, especially if the local economic conditions are not favorable.
When you are ready to sell your aging machines, look for a marketplace that can tap into the global buyer base to bring the best value. If you are unsure about whether or not you will be able to sell your surplus equipment, a good marketplace will be able to give you a sense of the market value and will work with you to put together a successful disposal strategy.
Partner for Multiple Selling Solutions
You have options when it comes to heavy equipment disposal. You can sell directly to someone in your network or check if your dealer has a buy-back program. Increasingly, fleet managers are working with equipment marketplaces to manage their inventory and connect with the maximum number of buyers globally.
Of course, not all heavy equipment marketplaces are alike. Your best bet is to identify an online marketplace with multiple selling solutions that meet your liquidity and disposition timeline. For example, IronPlanet enables sellers to choose from a series of disposition formats, including a buy-it-now marketplace, a negotiated sale marketplace particularly well-suited for specialty items and a highly liquid weekly auction. Such marketplaces should have a team that works with you to advise you on which marketplace formats to use to drive the highest prices in the timeframe you elect. Sellers often decide to start items in one marketplace and move them to another over time in order to drive higher returns. These moves can be made fluidly and at no cost to the seller in order to meet sale requirements. Aside from sales format flexibility, it is important to select a marketplace with a sizable buyer base, low fees, excellent customer service and detailed inspection reports backed by a buyer protection program. Keep in mind that selling online also saves you transportation fees to the sales and auction yard, which further maximizes your net sale proceeds.
You can increase the value of your fleet assets through periodic equipment valuation, regular maintenance and care, regular appraisal, consistent review of utilization and by partnering with the right equipment disposal marketplace for your needs. Following these practices will help you maximize the value of your fleet throughout its usage and upon disposal, whether you are contemplating a complete liquidation or just selling individual units.