When most people think of industrial auctions, an image of a fast-speaking bid caller with a gavel (hammer) comes to mind. In reality however, the traditional auctioneer is increasingly being supplemented by online auction platforms, where all the selling and buying happens over the web. This shift in the industry can’t be ignored. Practically every reputable industrial auction firm now offers online auction services as part of their portfolio. Let’s look at some of the reasons driving the popularity of online auctions and what it all means for sellers looking to liquidate industrial equipment.
Reason #1: Access to a bigger & better pool of buyers.
Naturally, when your auction is web enabled, your equipment gets exposure to a significantly larger group of buyers. This is especially important if you are banking on selling larger, more specialized pieces of equipment and are hoping to target end-users. And when your auction is on a reputable online auction platform, those buyers are pre-qualified by the site and other sellers based on past transactions. You can see who has paid promptly, who was easy to work with and who picked up their items on time.
Online auctions are also far more convenient for buyers. NRI Industrial Sales, an Ohio based industrial liquidator finds buyers prefer bidding anonymously over the web rather than bidding in person. “With the advancement in technology in terms of being able to view hi-res photos and videos of industrial equipment, more and more buyers simply bid online, instead of spending time and money travelling to the auction site” says Scott Conway, Process Manager at NRI Industrial Sales. This means more buyers are likely to participate and drive up the bids for your items.
Control over a sale can often be an area of concern for both asset owners and auctioneers. By control, I mean, who can participate in the sale, when the sale can take place and the ability to protect assets through the use of reserves. Online auctions or liquidations attempt to address many of these concerns and really put the reins in the hands of Sellers.
Reason #2: More control for sellers.
Control who can bid in your auction:
Business owners looking to liquidate no-longer-needed production equipment are often concerned about the equipment being sold to their competitors. Or there can sometimes be corporate restrictions about the resale of assets. Online auctions make it far easier to screen who is bidding in the sale. Some mobile platforms such as Aucto.com even allow sellers to screen registrants based on location; in case the seller is concerned about where the equipment will end up.
Decide when the sale will happen:
With onsite auctions, the timing of the sale will always depend on the availability of the auctioneer. The calendars of the larger auction firms fill up quickly, and the dates suitable to the asset owner may not always be available. Online auctions don’t require direct auctioneer input on bidding day, and therefore allow more flexibility on choosing a sale date.
Better Reserve Process
Just like in traditional auctions, online auctions allow sellers to set reserves on assets they wish not to sell below a certain amount. The difference is that the process is a lot more transparent for buyers in an online auction. In a traditional auction, a buyer won’t know whether a lot has a reserve, or what the starting bid will be until that lot is up on the auction block. This can potentially be a huge waste of time for buyers who may be expecting lower starting prices or reserves. Online auctions clearly display the starting bids on all assets, and whether an item has a reserve; attracting buyers who are serious about bidding.
Reason #3: It’s great for small businesses.
Traditional auctions don’t work for small scale sales. If there are not enough lots in an auction, the sale will not draw enough buyers. This is why traditional auction houses typically only work with sellers who are looking to sell a lot of equipment. Small businesses, who typically don’t have huge amounts of capital equipment to dispose of often turn to online auctions for their asset recovery needs. The best auction and liquidation marketplaces don’t differentiate between huge companies selling thousands of items and small businesses posting five or six items. Regardless of the amount of items being posted, the lots are still put in front of an audience they wouldn’t normally be able to access.
“We realized that small businesses and sellers are often overlooked by traditional auction houses.” says Jamil Rahman, Founder and CEO, Aucto. “This is why we built Aucto for sellers of all sizes. Their listings are given access to the same buyer market as Fortune 500 Companies.”
Some Tips to Help You Get Started
Whether you’re figuring out your first sale or you’re an experienced seller looking to maximize your auction/liquidation revenue, here are a few tips for selling smart:
- Ask someone who has been there, done that. If it’s your first time, consult with colleague who has experience with selling online. If you can’t find anyone, a reputable online marketplace should be happy to answer your questions. Some even offer a free consultation to new sellers.
- Understand what type of equipment sells. Take a look around to see what’s listed, what’s selling, and what isn’t. Generic industrial equipment that can be used across a multitude of industry is a lot more likely to sell quickly than specialized or customized machinery. Review the completed listings on a marketplace to identify which items are likely to sell fast.
- Be realistic on your pricing. If you are looking to liquidate equipment, expect liquidation pricing. Remember, auctions and liquidations help you recover your capital in a very short period of time. Price is the tradeoff.
- Take The Time to Prep Equipment for Sale. Cleaning and preparing the equipment you are looking to sell goes a long way in recovering the maximum value.
- Title it right. Ensure your title includes the right keywords so it’s easy for buyers to find it in a search. Include product name, manufacturer, model number, and important specs in the title as well.
- Post lots of visuals. Ensure you have plenty of clear, high-res photos of the item, including manufacturer’s labels. Include videos of it in operation, if applicable. Show buyers anything they would see if they were looking at the item in person. Avoid background clutter, make lots look organized, and provide a written description with each image.