Going, going, gone
By Mark Weston20 May 2016
It is not unusual for companies in any sector to have unwanted or unused plant and equipment.
For some it may be the result of voluntarily closing the business for retirement, others may be decommissioning a satellite facility. Introducing new methods of operation or shifting the focus from demolition to materials handling, for example, can also result in surplus equipment.
For decades, demolition and materials handling contractors have taken advantage of various methods of sale to dispose of such equipment and raise capital for reinvestment in new machinery, property or other assets. It’s nothing new, of course, but how have those method of sale changed? And how can firms be sure they are getting the best price?
From skips to shredders, crushers to commercial vehicles, there remains strong demand for a whole host of used demolition and recycling equipment.
The most important thing of course is to find the best method to generate the highest returns – which is why it becomes important to enlist the services of a specialist machinery and business asset surveyor.
Online or offline?
Surveyors with experience of the demolition industry will have the knowledge, insight and contacts to generate the highest possible price for sellers. Based on a range of factors including demand, condition, location and estimated value, they may use those relationships to arrange a private sale, or they may opt to sell in an auction.
Specialist plant auctions have been held across the UK for years, giving buyers the chance to bid for equipment in person or via the telephone or internet. It is not just business assets of course; every week in the United Kingdom an estimated 75,000 lots go under the hammer across a network of 300 auction houses, with around 60,000 of those being sold.
However, these numbers are falling. As the internet became commonplace at the end of 20th century, buyers soon realised that they didn’t need to attend the auction at all. Webcast bidding, where people place bids on lots via the internet, became more popular as saleroom numbers dwindled. This trend has continued, boosted by the rise of smart phones and handheld internet connectivity.
Online platforms have changed the very concept of auctions beyond recognition and their success cannot be ignored.
Clicks of the trade
With this in mind, leading surveyors were quick to introduce online platforms for industrial machinery and business asset auctions.
Like eBay, these online auction platforms open up the sale to a wider audience, allowing increased competition and the opportunity for a higher price. Previously, of course, auction lots were restricted to a small number of buyers in the auction room, or any offers made in advance in the form of a sealed bid tender.
They offer the same functionality as mainstream auction sites, including the ability to place maximum bids in the same way as a conventional commissioned bid, and it is clear how they offer greater convenience for both the buyer and the seller, especially for the heavy, bulky equipment that is so common in this sector.
Viewings can usually be arranged as part of a pre-arranged viewing day, although many buyers will not even bother thanks to the level of detail provided in online auction catalogues.
Of course, there are drawbacks. While the industry must embrace technology like any other, it is fair to say the introduction of online auctions has been a challenge for many surveyors, who lament the loss of face-to-face interaction with buyers.
Auctioneering is recognised as one of the oldest trades in the world and generations of professionals have thrived on the buzz of the auction room.
Relationships were built in auction rooms, particularly within individual sectors like demolition and recycling, and subsequently used to the advantage of sellers.
Online auctions have quite literally changed the face of auctioneering; indeed in many cases buyers no longer have a face, just an online log-in.
The most important thing if you are considering selling any equipment is to choose your seller carefully. Some firms will still opt to try and complete private sales themselves – and of course for individual lots they may be successful – but for large catalogues we would always recommend instructing an expert.
Specialist machinery and business asset surveyors have the knowledge and the contacts, but crucially they also have the legal insight required to maximise returns and minimise any risks.
For example, any equipment sold through online auctions is subject to distance selling regulations, which means lengthy condition of sale documents are necessary.
Consumer issues must also be taken into account, especially when items have not been viewed in person.
Online auctions can provide an exciting method for disposing of assets. They are easier to host, quicker to arrange and more convenient for buyers.
Above all, of course, is the increased financial realisation made possible by online platforms. By maximising the reach, firms can increase the competition and achieve a higher sale value, and for that reason alone they will continue to prove popular.
This is a version of the article published in the March-April 2016 issue of Demolition & Recycling International magazine. To read the full article, or to receive the magazine on a regular basis, please visit www.khl.com/subscriptions