The ins and outs of buying and selling used heavy construction equipment online
There was a time, not so long ago, when the only viable options for buying and selling used heavy construction equipment were onsite auctions and print ads. No longer. Today, online resources are gaining in popularity, and in a big way.
Mascus International BV: Online international marketplace
Started in 2000, Mascus International BV is headquartered in Amsterdam, The Netherlands, where more than 100 employees represent 29 nationalities. The company has 58 offices worldwide, including Mascus Canada Inc., a license holder located in Toronto, Ont.
“We went with the license holder model seven years ago because it offered Mascus the opportunity to grow both locally and globally,” said Tim Scholte, CEO. “You can find Mascus in Europe, Australia, Africa, Asia and North America. This is especially important today, when much of the equipment sold doesn’t remain in the country of the seller.”
Scholte compared the Mascus website to Craigslist, albeit for used equipment in seven major categories: agriculture, construction and mining, trucks and trailers, material handling, groundscare, forestry and spare parts. Within each category are several sub-categories. For example, under the master heading “Construction and Mining” is a sub-category of “Piling Equipment,” which is in turn broken down into additional categories, including piling rigs, accessories, hydraulic pile hammers, vibratory pile drivers and rotary drilling heads.
At present, 4,250,000 buyers visit the Mascus website every month. Heavy construction is the strongest category, with approximately 300,000 ads, of which 110,000 fall under construction and mining. Each ad includes photograph(s), a description of the item and the seller’s contact information. Buyers and sellers connect independent of any direct involvement from Mascus, although the company’s expertise is well established.
“I find the staff at Mascus to be knowledgeable about the heavy equipment industry,” said Skipp Fowler, assistant sales and marketing manager at A.L.P.A. Equipment Ltd. in Balmoral, N.B. “They offer up expert advice and have been a pleasure to work with.”
In addition to an online advertising resource, Mascus can also provide additional services, including building dealer websites, or placing an ad on both the Mascus website and existing dealer website and/or Facebook page. They can also work with their clients to enhance mobile solutions, a trend that is growing exponentially.
“Our objective is to streamline the process for the seller, whether that seller is a dealer or an auction company,” said Scholte. “We have a special auction tab, a dealer locator and a Buy/Sell Directory. Under the auction tab, there are more than 10,000 machines being auctioned on any given day by over 150 auction companies. There are another 7,000 dealers advertising.”
Buying and selling online takes trust, something Mascus clients develop quickly.
“Throughout the process of setting up my dealer account, I had nothing but good experiences, from setting up the back end for our website to meeting face-to-face with the Mascus staff at their head office in Amsterdam,” said Darcy Johnston, managing director of Leemar Excavator Components Inc. in Parksville, B.C. “I find the interface easy to use to put products for sale and the crossover to Google search results very high. I also use the site for research and for networking other suppliers all over the world. Lastly, if I ever have a problem, I can pick up the phone and be in touch with someone who can fix whatever issue might arise.”
The bottom line?
“If you’re looking to buy or sell a machine,” said Scholte, “we want Mascus to be the place you start.”
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IronPlanet: Online auctions
Headquartered in Pleasanton, Calif. and founded in 1999 as an online auction company for used heavy equipment in the construction, trucking, cranes, mining, oil and gas industries, today IronPlanet has operations in the U.S., Canada and Europe, with over 300 employees worldwide.
The company’s growth has been especially dramatic over the past five to seven years.
“The fact that our online sales grew by 17.2 per cent Compact Annual Growth Rate (CAGR) during the toughest industry climate in decades speaks volumes,” said Sue L. McGregor, managing director, Canada, for IronPlanet.
In Canada alone, year-over-year gains in 2013 equate to 22 per cent new registered users, 135 per cent new sellers, 72 per cent in the number of items sold and 198 per cent in merchandise value sold. In 2013, IronPlanet boasted 2,600-plus unique sellers, 9,500-plus unique buyers in 104 countries and 21,000-plus unique bidders in 115 countries.
McGregor believes the success of the online auction format can be attributed to the one commodity we can’t replace: time.
“People are busier than ever,” she said. “Buying and selling online is convenient; you can buy or sell when it’s right for your business, and there is a global reach without the time and expense of personal travel.”
Dan Plourde, a sales manager at an Alberta company, is quick to point out the advantages of IronPlanet online auctions. “By using IronPlanet, we’ve been able to sell equipment to a wider, global audience of buyers spanning Saudi Arabia, Antigua, Canada, the U.S. and more. It’s extremely convenient and reduces cost since we don’t have to take on the added expense of shipping items to auction sites. We also appreciate working with a dedicated sales representative who walks us through the process and makes recommendations to ensure a smooth sale each and every time.”
Items listed with IronPlanet range from small hand tools to a record USD$3-million achieved for a Marion 7820 walking dragline. Nonetheless, McGregor admits that there is a gap you have to bridge when it comes to spending $100- 200,000 and more.
“Obviously, buyers must do their due diligence, and it’s absolutely essential that you are dealing with a well- established, reputable company, one with behind-the-scenes support that can assist with export/import matters, provide logistics support and facilitate titling issues,” she said. “At IronPlanet, we also offer IronClad Assurance® on much of the equipment being sold.”
The IronPlanet IronClad Assurance symbol lets a buyer know that one of the company’s inspectors has personally visited the item and conducted a visual inspection of key components, taken photographs, taken selected measurements and retrieved oil/fluid samples for lab analysis. The findings from each inspection are presented free of charge for the buyer to review before bidding on the equipment. IronPlanet guarantees that this inspection report is a fair representation of the equipment in its true condition.
That sort of assurance is important to all buyers, but it’s especially comforting for buyers new to the process, like Keith McTaggart, owner of McTaggart Equipment Co. Ltd. in Winnipeg, Man.
“Purchasing equipment used was a different route for me, but I liked that IronPlanet provided detailed information in its guaranteed inspection reports backed by IronClad Assurance,” he said. “This gave me the confidence to purchase a machine sight unseen.”
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Ritchie Bros. Auctioneers: Online and onsite auctions
Established in 1958 in Kelowna, B.C., Ritchie Bros. is the world’s largest industrial auctioneer, with more than 1,400 employees worldwide. The company conducts live, unreserved public auctions with both onsite and online bidding, selling a wide range of used and unused equipment for a variety of industries, including construction, mining, transportation, agriculture, material handling, energy and forestry.
Worldwide in 2013, the numbers translate to 356 unreserved auctions, with $3.8-plus billion of equipment, trucks and other assets sold. Drilled down further, that equates to approximately 425,000 bidder registrations, 104,550 buyers, 43,550 consignments and 301,000 lots sold.
With more than 40 auction sites in North America, Europe, the Middle East, Asia and Australia, the onsite auction continues to be a popular format for buyers and sellers alike. Online activity in these auctions, however, has exhibited significant growth in the past six years.
“In 2008, we sold $600 million online, and our website was tracking three million unique visits,” said Peter Blake, CEO. “In 2013, we sold $1.4 billion, with six million unique visits. Providing equipment listings in 21 languages and the ability to bid in seven languages also allows us to penetrate more markets.”
The combination of onsite and online bidding is what makes Ritchie Bros. unique, from a buyer’s and a seller’s perspective. In fact, many of Ritchie Bros. clients are both buyers and sellers. Such is the case with JJM Construction Ltd., a premier construction company specializing in heavy civil, highways, bridges, dams and marine construction, including environmental and navigational dredging.
“As a seller, in my experience, it’s the combination of online and onsite bidding that creates the largest possible market for my equipment,” said Peter Miller, vice president – equipment division at JJM Construction Ltd. “Pair this with the unreserved bidding model that Ritchie Bros. uses and you know the buyers will show up on sale day. I also buy quite a bit of equipment online, and as a buyer, unless it’s a very late model piece I will go to the auction site to inspect it ahead of the auction, before I go home and bid online. I know other bidders are the same – that’s the huge advantage with Ritchie Bros.”
The practice of inspecting equipment in person before bidding online is something Blake says is becoming increasingly more commonplace.
“We’re selling used equipment in an unreserved auction, and everything is sold as-is,” said Blake. “Condition is prominent in the assessment of value. We do offer detailed equipment information on our website, including high-resolution, zoomable photos, but nothing replaces the comfort level of seeing something in person. Most of our buyers are end users with immediate plans to use the equipment. We encourage sellers to have the equipment at our yard several weeks ahead of a sale to provide as much time as possible for buyers to visit the site beforehand to view and inspect equipment. Potential buyers will sit on a piece of equipment, look at the colour of the smoke, pull at the hoses; it’s hands-on due diligence. Anything can look good in a report.”
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