Making the most of your assets

15 April 2008

Ritchie Bros crane auction last December at Moerdijk in the Netherlands

Ritchie Bros crane auction last December at Moerdijk in the Netherlands

Since Tadano IMES Ltd held its first online auction of rough terrain cranes through the online auction service Assetline.com in 2001, online crane auctions have become popular around the world, opening up a larger selection of equipment to a far larger number of potential buyers.

Some auctions take place only online, some are held on site with live bidding and some are also broadcast over the internet with a live bidding facility. Others also include a live video feed over the internet of the sale as it happens.

Buying and selling cranes at auction is now a fully international process, which allows sellers to promote their equipment to the widest possible audience, and buyers to check out the widest range of equipment ahead of the auction. It allows sellers to quickly realise assets and receive prompt payment for equipment they no longer use or want.

Auction houses handling cranes range from those with multiple offices offering auctions around the world, to those with a single office but all use the internet to promote their sales. A wide range of ancillary services is also offered, from financing to transportation and translators.

Maximum return

The process of selling can begin with the simple submission of equipment for unreserved sale, as seen and with no warranty. Another service on offer by auction houses is evaluation of the crane and assessment of the equipment's condition for an effective sale with maximum return. Some machines need refurbishment or repair to gain the best value, a service offered in-house by some auction houses. If the work is completed by the auction house the cost is deducted from the selling price.

International auction house Ritchie Bros., headquartered in Canada, says it sold 203,000 items of equipment in 2005, giving it the opportunity to review a wide range of models and standards. Ritchie Bros provides an evaluation report on the equipment, which includes details of the mechanical condition and indicates whether the equipment can be sold as-is or with, for example, a simple wash, repairs to moving parts, upholstery, metal and paintwork. The company has refurbishing centres at all its permanent auction sites in North and South America, Europe, the Middle East, Africa and Australasia, which are operated to local environmental regulations.

World Wide Auctioneers (WWA), based in Dubai and Qatar, but with franchise partners in Australia and Indonesia, tailors auctions for clients with large equipment inventories, holding the sales either on the client's premises or in a WWA auction yard. Smaller clients are invited to join other sellers, to obtain maximum exposure. Where the seller wants cash quickly this can be advanced against the sale or WWA will buy the inventory outright. WWA also visits the customer to evaluate the equipment and may also recommend some refurbishment.

Japan-based auction service, www.assetline.com, offers weekly auctions online, tender auctions in its stock yard, and monthly sales which are a combination of both, where online customers bid anonymously. Around fifty items are chosen from each sale for assessment and photographs, both of which are available online prior to the auction.

The family-owned business of John A Bell Auctioneers in Australia, offers a local auction service backed up by valuations, asset registers and stock reconciliation. At a recent auction it sold a wide range of construction equipment, including truck and yard cranes, and boom and scissor lifts.

Another family company, Blackmon Auctions in Arkansas, US, conducts bi-monthly auctions all over the country, also drawing in customers from Canada and Mexico. Blackmon appraises the equipment submitted for auction, promotes the sales through a colour e-mail brochure, advances the cost of refurbishment and pays the seller on the day of the sale.

The sale of US Government equipment is a speciality of Durham Auctions in Mississippi, where services offered include pre-auction cleaning and minor mechanical work for the equipment, which is featured in a brochure mailed to the company's client list and backed up by national advertising.

US state governments also offer equipment for sale at auction; in 2007 the Arizona Department of Transportation is auctioning used public equipment for sale in March, April, September and October.

British Car Auctions (BCA) in the UK, also holds sales of construction equipment, both online and on site. The BCA Commercial Auction View web site shows current sales, which take place monthly at the BCA Measham centre in the English Midlands and at other centres around the country. The sales, which have recently included a 60 tonne Coles crane, can also be tailored to a particular customer and are backed up by telemarketing and call handling designed for that customer. The stock list is updated every few hours and can be searched by make, model and location.

In addition to conventional auctions, DoveBid.com offers online auctions where bids can be placed any time of day. Buyers around the world can inspect sale items over the internet, by digital photographs or a 360-degree virtual tour available in several languages. Other services include asset appraisal and assistance with shipping purchased equipment.

Buying

For buyers the first rule is registration. This can be done before the sale, often online, and usually consists of providing a name, address, company (if relevant), photographic identification, and proof of ability to pay, such as a bank guarantee letter. A bidder's number is then provided on a bidder's version of the sale catalogue. The sale catalogue can often also be downloaded from the auction house web site ahead of time or provided in hard copy.

Some companies, including World Wide Auctioneers and Ritchie Bros, offer a guide to registration and the bidding process on their web sites, together with details of finance for purchases, which they can arrange in advance through established finance houses.

During a live sale, each piece of equipment is either driven across a ramp or shown in the stock yard, and, for larger sales, may also be shown on video to buyers bidding via the internet. Live bidders raise their bid is relayed to the auctioneer via a bid catcher, for added security. Internet bidders and those bidding by proxy through the auctioneer are also recorded against their bid numbers.

Most auction houses state that they operate unreserved auctions, meaning there are no hidden reserves and that proxy bids will be applied as if they were being placed in the auction room.

Afterwards

Settlement usually begins as each item is sold and debited to the bidder's account. Some auction houses require payment on the day while others give up to seven days. Local taxes usually apply to all transactions. Full details are contained in the Terms and Conditions given in the auction house documentation.

Transportation of equipment to and from the auction can usually be arranged by the auction house and, if the equipment has been refurbished, can be used as soon as it arrives at the buyer's own site.

The view at World Wide Auctioneers is that, “Both buyers and sellers find that the unreserved auction method gives confidence that the equipment has traded for a fair market price.” And at Ritchie Bros, “The unreserved auction method allows every bidder to participate on a level playing field in which negotiation skills and buying power are irrelevant. With this open and transparent auction method, buyers can be confident that they pay fair market value for their purchases.”

Latest News
Mace’s revenue passes £2bn mark
UK-based Mace has seen its revenue pass the £2 billion mark, driven by an expansion of global consultancy work and a five-year high for construction revenue
Corruption controversy engulfs Australian construction union
An Australian government minister has asked the federal police to investigate allegations of corruption against the construction division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU)
Fed funding pushes construction start on Washington-Oregon bridge
Federal funding helped start phase one of a major bridge project start in the US Northwest