Construction equipment auctions may be one of the fastest growth segments in the

Construction Equipment Auctions Are Experiencing Rapid Growth

What is causing the growth of construction equipment auctions?

The reason this is taking place is the volatile nature of world economies and the rise and fall of the industries that shape demand for construction equipment.

Developed economies such as North America and Europe have seen a lower demand while the emerging counties like Brazil, China, India, and Russia have seen explosive growth.

What affect has this had?

In the countries where there is slower economic growth and less available funding there is an over-supply of used equipment.

On the other hand, those countries that are experiencing rapid, sustained economic grow are experiencing shortages of used equipment.

They have found that the manufacturers are not able to keep up with demand and they are looking to purchase used equipment to maintain production on all types of projects.

What are some of the other influences?

Dealer inventories of used equipment have been at an all-time high for the past three years.

Contractors have the same experience and are looking for ways to sell their idle inventory of used equipment.

I have been following the construction equipment auctions for more than 30 years and I have these observations you might find interesting.

With all the large auction houses there are more auctions being held with inventory at record levels.

There are more online auctions than ever before.

There are more used attachments for sale than ever before (items like buckets, blades, grapples, welders, etc.)

There are more participants than ever before both buying and selling equipment.

More auctions are being held outside North America and Europe than ever.

I see more advertising from the emerging economies asking for sources of good used equipment.

The auction houses are offering more services (transportation, refurbishment service, appraisal services, and payment service options.

There are more sales representatives working for these companies in an effort to build long term relationships and guide customers through the processes.

So how can you take advantage of the changes taking place?

Does your dealership have an Auction Strategy? What do I mean by having a strategy?

How do you determine what used will go to auction versus what will remain in your inventory for re-sale to your customers.

How long will used inventory be held in your inventory (any used equipment held for 12 months or more is at risk of not moving at all).

Is your dealership prepared to work (buying and/or selling) with clients overseas?

Do you have an inspection process that will allow you to establish the price of the equipment at auction?

Do you have a technician and/or a Used Equipment Manager specifically trained to evaluate equipment?

Do you compare the price of equipment sold at auction (I recommend using Equipment Watch. They have information you can purchase which will help you in establishing acceptable pricing for an auction.

Do you have staff in your dealership that understands the financial impact of buying and/or selling used equipment (taxes, sales tax, currency exchange rates, what are the currency requirements to participate, what are the required deposits to buy or sell, use of credit cards and wire transfers)?

Is your staff knowledgeable about the environmental impact of importing used equipment in to North America?

Is your staff knowledgeable about customs requirements both inside and outside of your country (what documentation is required)?

Has your dealership completed the research on which auctioneers can be trusted locally, regionally, nationally or globally?