Equipment World Digital Magazine
Issue link: http://read.dmtmag.com/i/860257
August 2017 | EquipmentWorld.com 24 Selling Used equipment plays a significant role – both its acquisition and disposal – in the business strategies of contractors. When it comes to selling used equipment, auctions are usually the most popular method, but most companies use a mix of strategies. "Right now, auctions account for probably 90 to 95 percent of our equipment disposals," says Bob Merritt, director of equipment and construction services operations support at AECOM. "Without auctions, equipment disposal becomes a big job that includes taking care of the liens, title searches, marketing, legal paperwork and fielding the offers. After the sale, you still need to handle the shipping logistics. When you use an auction company, all this is taken care of for you." But if you don't have a lot of equipment and you're not in a rush to sell it, there are other options. "If you can afford to let it sit, you'll probably get a better price, because you're not paying the fees and costs of the people selling it for you," Merritt says. "I think auctions are the best way," says Doug King, fleet manager at Sherwood Construction, a civil construction firm based in Wichita, Kansas. "You get what the asset is worth on that day in that market. Our experience shows that, on average, we equal or better our appraised values selling through auctions. The key is getting your product in front of as many potential buyers as possible." King cautions, though, that not all auctions are right for every contractor or piece of equipment. "All auction companies have reputations and specific markets they attract," he says. "I will use different companies depending on what asset I am selling to which target market." Neither King nor Merritt is a fan of brokered sales. "I don't see any increase in our income, but we still have to put out time to show the equipment, store and insure the asset along with handling the fund transfers and commissions and deal with the haulers when they come to pick it up," King says. Online auctions For most of its sales, Sherwood uses an online auction service, Purple Wave, with no reserves or holdbacks, King says. "They allow us to sell the equipment at our locations, saving freight, fuel, jumpstarts and all the other issues. When we do use onsite auctions, it might be for a specific or specialized item that sells better in a certain location or region." "The transportation savings you get by using internet auctions for difficult, oversized pieces can make the net return better, but only if the unit can be marketed and advertised to get the attention it needs," Samford says. Private sales King also works closely with specialty contractors for used equipment report | continued Here are some contractor-honed strategies Buying? Selling? By Tom Jackson Top Used Wheel Loader Models 1. Deere 544K 2. Cat 924K 3. Cat 930K 4. Deere 624K 5. Cat 938K Top Used Excavator Models 1. Cat 336E L 2. Cat 320E L 3. Cat 316E L 4. Komatsu PC360LC-10 5. Deere 210G LC Top Used Dozer Models 1. Cat D6N LGP 2. Cat D6T XL 3. Cat D8T 4. Cat D6N XL 5. Cat D5K-2 LGP Top Used Backhoe Models 1. Cat 420F 2. Deere 310 SK 3. Case 580 Super N 4. Deere 310J 5. Case 580 Super M In terms of number of units, financed Jun. 1, 2016-May 31, 2017. Source: EDA, edadata.com