July 2014

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18 | www.cedmag.com | Construction Equipment Distribution | July 2014 Sales ales Surplus inventory eats into the profits of virtually every dealership. Obsolete or unused inventory carries with it the cost of the products themselves, the loss of working cash and the ongoing holding costs. When Hawthorne Cat faced a surplus of equipment in 2010, they decided to try a creative alternative to traditional channels and place items on eBay, described as one of the world's largest online marketplaces. Since that time, eBay has become an important part of Hawthorne Cat's used and obsolete equipment selling strategy. The Caterpillar dealer for San Diego, Hawaii, Guam, Saipan and American Samoa has its own eBay store with more than 100 items available for sale each month. Managed in-house by sales analyst and eBay specialist Taylor Ness, the distributor has already doubled last year's unit and sales volume in the first six months of 2014. "Our eBay strategy has evolved," said Steve Dunn, the dealer's corporate marketing manager. With less surplus equipment to be sold today, Hawthorne's eBay store is being used to sell aging inventory, thus increasing inventory turns and keeping the average age of the fleet and attachments less than 36 months. The type of machinery sold has grown beyond attachments to include power systems and smaller machines such as walk-behind compactors and concrete cutters. They have moved away from placing larger machines on eBay due to the higher fees associated with selling them and the complexity of shipping them. "We focus on the aged inventory," said Ness. "Outdated pieces that aren't being used – perhaps they are attach- ments that won't fit a current machine. For some customers with older machines, a new attachment just won't work." Hawthorne Cat's goal is to reduce its attachments inventory by 50 percent. "It is a great method of adver- tising those pieces that are depreciated with low book value," added Dunn. According to Dunn, traditional channels such as CAT Used and CAT Auction Services and other publications and websites are still used to sell equipment, but the Sold On (continued on page 20) Hawthorne Cat augments traditional channels by selling used and obsolete equipment, parts and attachments on eBay. BY JOANNE COSTIN

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