In these tough economic times, every industry in every business sector is feeling the impact of the recession. However, construction business owners and managers are getting more savvy and managing equipment fleets more wisely. From acquisition to liquidation, management teams are making educated decisions regarding best practices for buying and selling equipment that enhance every aspect of the business, including the bottom line.
There are a number of factors that should be considered to successfully buy and sell equipment as you position your business to continue to weather the storm and plan for the future.
Evaluating Existing Construction Equipment
Over time, as equipment is brought in and taken out of the lineup, it is easy for inventory lists to become outdated. First, take an accurate account of all of your equipment assets. Take a fresh look at your inventory, categorize your existing fleet and determine what equipment should stay, what should be sold and what needs to be added. Once that is completed, forecast the kinds of equipment the business will need and for what time duration you will need it. Ask yourself: Does your current inventory put you in the best position to succeed? Do you need to reallocate, upgrade or expand your inventory? These questions will help determine the best route to take when looking to expand or reduce equipment fleets.
If selling equipment is the best route for you, there are a few things that need to be done prior to reaching out to a sales agent, auction house or other sales tool. Machine preparation is the first step no matter how you intend to sell the equipment. However, too much preparation might create suspicion in the buyer's mind and could be detrimental to the sale.
There are standard practices of machine preparation that are industry acceptable and actually result in higher selling prices. These practices include:
- a thorough cleaning of the equipment
- servicing the equipment so that it is operational
- repairing leaks
- replacing broken glass
- re-upholstering ripped seats.
Once the machinery has been prepped, it is ready for inspection. Depending on the method selected to sell the equipment, some sources do not require inspection reports. However, many sources have in-house inspection teams that help sellers complete inspections prior to the sale of the equipment. This is an invaluable tool and something that should be considered when working with a broker, auction house or other selling outlet.
Now That the Machinery Is Ready, How Do I Sell It?
Getting the equipment ready for sale is only half of the process. Now that the equipment is prepped for sale, consider which selling option best fits your situation.
If selling the equipment at auction is the preferred method, then it's important to understand the contractual obligations of each auction house before selecting the right one. This includes knowing and understanding all of the terms and conditions while the machinery is out of your control, whether you are the buyer or seller. Since traditional auctions usually require transporting the equipment to an auction location, know that sometimes there are fees associated with relocating the machinery as well as storage fees on the auction house property. Also, know what happens if repairs need to be made or damage occurs while the equipment is in transit or at the auction location. It is important to understand the terms and contractual agreements up front, because some contracts might be incompatible with the way your company does business.
Online auctions have become increasingly popular as the sales outlet of choice. One reason is the equipment does not leave the seller's control until after the sale is made, payment is received and delivery arrangements are made. This gives the seller peace of mind regarding the safety and security of the equipment and eliminates transportation costs. This is a primary reason that online auction companies offer detailed inspection reports and photos that are
