Liquidations and auctions are an excellent way to save money on used and surplus industrial machinery and equipment. Most sellers will utilize industrial liquidations to sell specialized production machinery, complete production lines or plants and higher value assets.
Unlike an auction bidding format, liquidations allow sellers to determine an asking price for the assets they wish to sell. In some liquidations buyers may submit an offer or a sealed bid if they wish to enter in a negotiation with the seller.
If you’re thinking of buying from an industrial liquidation, and you have never bought from an industrial auction or liquidation, here are 6 helpful tips to help you navigate the process.
1. Cash is King
When it comes to paying for your purchase, don't expect payment terms. Most liquidation marketplaces require payment for your purchase prior to the seller shipping the item. Upfront payment is one of the reasons sellers look to liquidate, so as a buyer you want to make sure you are ready to go when it comes time for payment.
2. Phase Your Purchase
Liquidation sellers are motivated to sell items for as much as they can in the shortest amount of time. However, if you’re looking for something specific which is not in demand, you may be able to use timing to your advantage. Most liquidation sales will typically last 6 to 20 weeks. Try your luck near the end of the sale – many companies may be willing to let go of their remaining stock for a lower price just to get rid of it.
3. Double-Down On Research
Before you look at items in a liquidation sale, make sure you know the value of the items you are bidding on. The value of a machine or piece of equipment varies depending on the age, condition, economic climate and even current levels of demand and supply. For example, if there is a halt in construction in an area because of a recession, used construction equipment supplies will increase and prices will come down. By taking these factors into account, you can more or less figure out how much something is worth. Or, you can simply look at other popular websites and see how much a similar item is currently selling for to make sure you’re not overpaying.
4. Know Your Sellers
Items can be sold directly by the owners or could be for sale through third-parties such as brokers, auctioneers or agents. You’ll want to know who you are dealing with. Some people assume they will get a better deal if they deal directly with the seller. This is not necessarily true. Third-Party brokers often act as mediators between buyers and sellers to help everyone come to an agreement. However, if you are are dealing with a seller directly, you are more likely to receive accurate information on the history, maintenance records and technical information on the piece of equipment you are purchasing.
5. Inspect Before Buying
If you are planning on purchasing a big ticket item or a complex piece of machinery, a visual inspection over the internet just won't suffice. You should request to personally view the equipment (if you are lucky, you can see it operating) whenever possible. Although inspections can sometimes be time consuming and cost a bit of money, they can potentially save you from unpleasant surprises later.
6. Use Marketplaces to Your Advantage
Industrial Marketplaces are hubs that work to attract sellers of industrial equipment. This is where you are most likley to find the largest selection, current market pricing and the most sellers.
Keeping your transactions on reputable marketplaces gives you an added layer of projection. Reputable marketplaces will have Buyer Protection Programs in place to enhance markeplace trust. For example, Aucto.com protects buyers by placing their payment in a safe escrow account until they receive their purchase. Once a buyer is satisfied with their purhcase, Aucto releases the payment to the seller.