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Selling 101: Tips For Equipment Owners


Feb 25, 2014 - 4 years ago

By Supply Post

By Sue McGregor, Managing Director of Canada, IronPlanet


As an equipment owner, it can be a challenge to manage a fleet, whether large or small. Understanding the selling process and buyer demand throughout the year can give you an idea of when to dispose of items and when to hold off. By doing so, you’ll be able to maximize profits while reducing unnecessary stress.

Why Sell?
You may sell equipment for a variety of reasons. Every few months, it’s important to consider the following:

Is the equipment being utilized?
There’s no need to sell core equipment that gets used on a regular basis. However if the equipment is sitting idle or is rarely used month after month, especially during busy seasons, it is hurting the business more than it is helping it. In addition, as equipment ages, it depreciates in value, reducing available cash upon sale. Therefore, owners should look at their schedule to see if upcoming projects will properly utilize their machines. Selling machines that will not be needed in the foreseeable future improves the bottom line and can open up new business opportunities.

Does the equipment need maintenance?
Sometimes a fleet yard can end up looking more like a scrap yard as poorly maintained equipment piles up. Like underutilized equipment, equipment that is not well taken care of incurs cost, rather than generating profit. But owners shouldn’t give up hope on damaged or nonfunctioning machines. Sometimes buyers will purchase equipment for its parts, meaning an excavator with a bad transmission but a working engine can be desirable. Other times, owners don’t want to pay costly maintenance fees to get equipment back in working condition if the machine is older or is not used very often. Yet, there is still a market for equipment that needs repairs, especially in global developing countries. Sellers just have to find the right buyer who will appreciate the equipment in its current condition.

Is it time for an upgrade?
It’s inevitable that an equipment owner may be interested in purchasing a newer model of a machine at some point. Clearing out older models can help make a new piece of equipment more affordable.

When to Sell
Q1 is typically the best time to dispose of underutilized or aging equipment because buyer demand is highest from January to March. This is because many new projects across Canada usually commence once snow and ice melt and warmer temperatures approach. Buyers want to acquire equipment, allow time for it to be transported to their yard and make any necessary improvements before it is put to work on a job site. Q2 and Q3 typically yield slightly lower values due to lower demand. The decrease in demand occurs because many organizations already purchased equipment in Q1 in preparation of the warmer weather seasons. Q4 sees an uptick in activity as construction winds down and sellers try to get equipment off their books before the end of the year, although values are still lower than Q1. However, timing will always be dictated by what is best for your business.

What to Sell
It’s important to know what equipment will be of the greatest interest to buyers. Well-maintained equipment that is six years old or newer will entice buyers. However, buyers are not solely focused on the age of a piece of equipment. The number of hours the equipment has been used usually holds more weight than the age. Buyers will typically spend more on machines that have 4,000 hours or less.

How to Sell
As a seller, you want to reach as many potential buyers as possible because greater bid participation can drive higher values. To reach the greatest possible number of bidders, sellers should work with an online global marketplace that has expertise marketing to equipment owners around the world. In addition to attracting more buyers, marketing to a global buyer base is beneficial to sellers trying to dispose of equipment that is older and has more than 4,000 hours logged. In less developed areas, such as countries in South America and the Middle East, buyers are more comfortable purchasing these machines rather than equipment that features more complex technology.

An auction partner can use pricing tools to help the seller determine the ideal listing price by analyzing the equipment’s condition and past auction results, while taking the time of year and the make and model into consideration.

Equipment disposal doesn’t have to be a tedious process. Understanding why, when and what to sell, in addition to working with a trusted marketplace, will help you make the best decisions for your business.

Sue McGregor is Managing Director of Canada at IronPlanet, a leading online marketplace for buying and selling used heavy equipment. For more info, visit www.ironplanet.com.

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