When it's time to sell your sell your heavy equipment and trucks, chances are you want two things: you want to sell it quickly, and you want to get the best price possible. That sounds simple enough, but with all the available sales options and the constantly varying needs and demands of businesses, selling equipment can become a complicated and time-consuming undertaking.
So it stands to reason that how you sell equipment and trucks should be given some careful consideration - it can have a big impact on your bottom line when you consider how much time (and therefore money) you can afford to spend on the process. Finding the right potential buyers is just one small piece of the puzzle. You also need to consider everything else involved - marketing, arranging inspections, negotiating, vetting legitimate offers, storage, insurance, and other costs. All those things can add up to big money and hundreds of hours spent on the effort. You need to weigh your potential returns against the potential cost of selling.
Whether you take on the task yourself or hand it off to a third party, there are pros and cons to all the different ways to sell heavy equipment. Here's an overview of the most common sales channels used for asset disposal to help you make an informed decision.
Unreserved or absolute auctions.
An unreserved auction - whether live, online, or both - is a convenient method of disposing of large numbers of items quickly. There are no minimum bids or reserve prices, and every item sells to the highest bidder on auction day. That helps attract the most potential buyers possible from a diverse range of industries and therefore creates the greatest demand for your equipment. Buyers participate in these auctions with the intent of buying equipment they can put to use right away. As a result, they typically bid more aggressively on the items they need which generally leads to higher returns for the seller. Another big advantage of this type of auction is certainty of sale, and no time spent by the seller in negotiations with buyers. And auction companies usually offer different consignment options, depending on the numbers and types of items a seller wants to dispose of.
Pros: auction events create urgency and competition, more potential buyers - especially with both on-site and online bidding, high demand, better returns, certainty of sale.
Cons: have to rely on experience, skills, and market reach of the auction company; added services come at a price - make sure you are getting value for money; you cannot guarantee the final selling price for the equipment (but ask about contracts that guarantee returns).
Auctions with reserve prices are commonplace. Sellers place a hidden reserve price on each item. If the highest bid is less than the desired price set by the seller (the reserve price), the seller reserves the right to accept or reject the highest bid. The main benefit for sellers is knowing their equipment will not be sold for a price below their expectations. However, they also put a lot of time, effort and money into the auction, with no guarantee that their equipment will be sold. Many buyers avoid auctions with reserve prices, because they do not know if the equipment will be sold; that means there is often less competition, resulting in lower prices.
Pros: control over minimum price, auction events create urgency and competition.
Cons: excludes large numbers of potential buyers, equipment may not sell.
This is probably the most common way to dispose of equipment -whether by contacting your personal network of equipment users, putting an ad in a newspaper or online listing site, or simply put a "for sale" sign on your machine. If market conditions are favorable, private equipment sale can yield the returns you're looking for. There's no middle-man controlling the process or setting the price for you, and you're definitely motivated to sell.
Depending on the specific channel you choose, selling privately can require a large investment of time and money on your part. If you chose to sell via general classifieds or a free online listing site, there's potential for a lot of hassle and valuable hours spent contacting potential buyers, arranging inspections, dealing with "flaky" buyers and negotiating the deal - in short, beyond price, a lot of the process is out of your control and the risk can be high.
You can minimize your cost, risk, and time-spent (and therefore reduce other ongoing costs like storage, insurance and depreciation) by choosing an industry-targeted online listing service that's secure, and lets you control the selling process. Sites that offer escrow services, like Ritchie Bros. EquipmentOne, ensure that your transaction is handled fairly and accurately with no hassles.
Pros: possible high returns, commission paid to third parties small or none, seller is in control of the process.
Cons: possible large investment of time and money, higher risk, no certainty of sale, unknown time frame for process.
Selling or consigning to equipment dealers.
There are certainly advantages to selling to a dealer or getting them to sell for you. They understand the industry and know the market well - what's in demand and where - and will generally have good connections and know how to market your equipment. Dealers can showcase your equipment in a prime location that's accessible to the public, but as a result often have high overhead costs they must compensate for. And, as with any business, equipment dealers want to maximize their profit. That means they'll often offer you the lowest price possible, or take a large commission. Dealers are also open to trade-ins, but again, the value you can expect will generally be low given that the dealer has to turn a profit on your old equipment. They're motivated to sell and can often offer buyers financing to help facilitate a sale, but won't be able to guarantee when your equipment will be sold or when you'll receive payment. There may also be extra charges or hidden costs associated with insurance, storage or other services such as advertising.
Pros: good industry & market knowledge, open to trade-ins, good connections, marketing plan.
Cons: lowest returns for seller, extra costs, no guarantees of sale or payment time.
Equipment brokers will use their industry knowledge and connections to help sell your equipment, and they'll be experienced in facilitating inspections, negotiating on behalf of both the buyer and seller, and ensuring the sale is concluded - all of which will save you time. But their commission rates and the price you get for your equipment can vary greatly. They may or may not have a plan for marketing your equipment, and any costs associated with this can be charged to you. You'll also still be responsible for your equipment's storage, maintenance, insurance costs, and losses from depreciation while the broker finds potential buyers.
Pros: good industry & market knowledge, good connections, time saver.
Cons: commissions, no assurance of sale or price, seller still pays overhead costs for equipment.
Now decide who will sell your equipment.
Once you've decided on the right sales channel for you - whether it's a dealer, auction or private sale - you need to choose the right dealer, auction or listing service. Different vendors and services have different levels of service, costs and experience. Check out these 10 simple questions to ask before you sell equipment.
About Ritchie Bros. Auctioneers.
Ritchie Bros. sells more used equipment than any other company, including construction equipment, farm equipment, machinery and much more. We conduct hundreds of unreserved public auctions each year, selling billions of dollars of heavy equipment and trucks for companies of all sizes; we also operate a secure online marketplace called Ritchie Bros. EquipmentOne, for people who prefer to buy and sell privately.
Learn more about selling equipment and trucks at Ritchie Bros. auctions, or contact your local Ritchie Bros. representative to discuss your options.