Understand Online Equipment Auctions

If you buy or sell equipment, you’ve likely noticed a resurgence in the used-equipment market. Those who attend auctions can attest to the waning availability of equipment—supply is low and demand is high—for just about every piece of machinery large fleet owners and contractors need.

Economic recovery, export growth and production values have caused this scenario.

According to the “World Economic Outlook Update” published by the International Monetary Fund in January 2013, the world economy is projected to grow 3.5 percent this year and 4.1 percent in 2014. Demand for equipment is correlated with economic activity. As the economy is on the upswing, more construction projects get the green light, meaning contractors must purchase new equipment. When this happens, old equipment is often sold to make room for the pieces required to complete new assignments.

Before the economy began what seems to be its recovery, the reduced demand for construction projects had manufacturers producing less equipment. According to the International Monetary Fund, new machinery orders decreased 3.1 percent in 2012 through November. With demand now higher, buyers must work harder to acquire equipment at the best prices possible, and sellers constantly evaluate creative ways to enhance their asset disposition strategies.

Capitalizing on the Momentum
As the auction industry changes, buyers are finding new purchasing models. Equipment dealers and manufacturers are bringing assets to market both directly and through auctioneer partners. However, as more options become available, buyers must be smart.

Some equipment buyers are going online. Online marketplaces offer new ways to buy and sell equipment. They are worth exploring because they offer access to a broad amount of inventory from a variety of sellers but also offer buyer protection and customer support. 

Choosing an Online Marketplace
There are many factors to consider when determining where to buy or sell online. When selecting an online marketplace, buyers should consider the following points:

• Size – Choose an online marketplace offering a competitive environment that allows market pricing. Access to more sellers enhances the network effect; more sellers bring more equipment, which will drive more buyers, which, in turn, attracts more sellers.

• Selection – The best marketplaces offer a variety of inventory types and volume. Look for tools to help you make an educated buying decision, including item descriptions, photos, videos and inspection reports.

• Security – Be certain that the marketplace you choose puts security first. Work only with a partner that protects your personal information, is PCI compliant and offers dispute resolution services. Some marketplaces also offer badging, making it easier to identify top sellers.

• Support – You should have a positive experience every time you buy online. Look for a provider with customer support availability seven days a week in case you encounter a problem.

Selling in an Online Marketplace
If you are an asset owner looking for assistance with your asset disposition strategy, consider the these factors:

• Size – Choose a marketplace that offers a large buyer base. The best marketplaces support their sellers through strategic advertising and marketing to drive buyers to their sales.

• Selection – Surround yourself with like-minded sellers. Find the biggest brands selling in your asset class and follow suit. 

• Security – Work with an online marketplace that protects you from fraudulent buyers. Ask whether the marketplace offers bank-level security, is PCI compliant, employs teams dedicated to fraud prevention and has dispute-resolution experts on staff. Do not work with a marketplace that has credit card verification as its only line of defense. 

• Support – The best online marketplaces offer a complete suite of products and services. Work with a marketplace that offers one point of contact for sales assistance, a customer service line, marketing guidance and analytics following each sale.

• Flexibility – Don’t offer your assets for sale in only one format. While some providers offer only auction-based solutions, others offer instant purchase or make-an-offer capabilities. Work with a provider that offers a variety of selling methods and will counsel you on the best method for your assets. Also, make sure you can easily move assets from one selling format to another depending on your needs.

The used equipment market is hot and will likely remain so in the near future. Explore buying and selling online, and gain a competitive advantage over those who are resistant to making the jump.