Guide to Selling Metalworking Equipment in California

Aucto Blog | 2018-09-07 11:00:00 EST

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In 1850, two years before California officially became a state, metalworking facilities were established to manufacture tools that would lead to the birth of the gold rush and cement the state as a leader in the American metalworking industry. World War II brought tremendous change to California as it became the country’s leading manufacturing center. California received 11% of U.S Government war contracts and metal plants in California produced 17% of all war suppliesMetalworking factories produced weapons, ships, and airplanes for the defense industry.

Today, metalworking manufacturers in California make component parts that go into solar panels, electric cars, medical devices, airplanes, infrastructure, national defense, and many other applications. 

Currently, California is home to 4,000 small to medium sized metal companies, providing comfortable living wages and health benefits for working class families, and a prosperous economic foundation for the state. According to statistics provided by the California Metals Coalition, as of 2017 the metalworking industry in California generates 350,095 jobs and accounts for $23 billion in total annual state and federal taxes.

It is no surprise then, to know that there is a big market in California for buying and selling metalworking equipment. With 4,000 business owners hoping to get their hands on the best deals, selling metalworking equipment in California is reliable and advantageous. 

Consequently, we understand that selling metalworking equipment can be a lengthy process if you are unaware of best practices. Educating yourself on the selling process in California and understanding the information you require before selling can assist you in gaining a favourable transaction.

Accordingly, this guide seeks to answer any questions you may have about selling metalworking equipment in California. To better understand the process of selling metalworking equipment in California, this guide will explain:

  • What to consider when selling metalworking equipment in California
  • How to determine the valuation of your used metalworking equipment
  • How to utilize online industrial auction marketplaces to source used metalworking equipment

Table of Contents

Who Buys Metalworking Equipment in California:

According to a report published by IBISWorld, sales of industrial machinery and equipment in California has been increasing due to growth in manufacturing processes and trade activity. The equipment market in California has grown at an annual rate of 5% between 2015-2017 and is expected to remain upstream in years to come.

Growth in Californian industrial activity has generated demand for metalworking equipment; such as lathes and drills and general purpose equipment, such as, pumps and compressors. Thus, there is a steady demand for metalworking equipment in California. 

Accordingly, if you have metalworking equipment that you want to sell, there are many equipment dealers and online marketplaces based in California that will assist you in buying or selling metalworking equipment. 

Best Ways to Sell Metalworking Equipment:

Selling metalworking equipment can feel like a chore, especially if you have an entire plant full of metalworking equipment to sell. Sorting, photographing, marketing, and selling your metalworking equipment requires time and resources.  In order to maximize your efforts, it is essential to take a strategic approach because buyers who are interested in purchasing the type of equipment you are selling belong to a very specific niche. You need to reach buyers while they’re in a buying mindset to make a favorable transaction.

Accordingly, the best ways to sell metalworking equipment in California is through used machinery dealers, live auctions, and online marketplaces. Using the internet to access buyers allows your metalworking equipment to reach a global audience.

How to Sell Metalworking Equipment Online:

When selling metalworking equipment online, you need to find an online marketplace that suits your selling needs. When selecting an online marketplace, refer to our previous blog post where we explore the four main factors to contemplate before making a selection. In the article, we emphasize size, reach, specialization, activity, and associated costs as determining factors.

More importantly, metalworking businesses are opting to sell their used metalworking equipment on online auctions because it gives them more control over their sale and reduces the impact on operational processes.

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How to Dispose / Recycle Metalworking Equipment In California:

Arguably, California’s metalworking industry is a leader in promoting an environmentally efficient and safe metal manufacturing facility. In comparison to competitors from around the world, the latest technology in consciously manufacturing metal can be found in metalworking facilities in California.

For example, reducing greenhouse gas emissions in metalworking operations has been a challenge that the state has been pursuing since the emergence of Assembly Bill 32 (AB 32). AB 32 is a program that takes a long-term approach to addressing climate change and seeks to sustain the environment and natural resources while maintaining a robust economy. Issues such as energy efficiency, environmental controls, employee preparedness and equipment replacement are common issues for Californian metalworking facilities. Moreover, since 2006, the California Metals Coalition has been a supporter of California’s Climate Action Registry (CCAR) and has agreed to encourage and promote early actions to reduce greenhouse gas emissions produced by metal manufacturing facilities. Accordingly, the California Metals Coalition has hosted workshops on AB 32 for the metalworking industry in order to educate and promote an environmentally conscious attitude to manufacturing metal.

In California, many metalworking facilities recycle and sell their metal ingot and scrap material. The metal is reused as the base to build parts for airplanes, renewable-energy windmills, medical devices, and military defense items. However, processing metal requires specialized equipment and energy use. Cutting energies for machining depends on a variety of factors, such as material properties of the work-piece, presence of cutting fluids, sharpness of cutting tools, and processing variables. This knowledge of specific cutting energies can help determine the energy required to remove a certain volume of material. 

Moreover, there are many service providers in California that manage the recycling process of your metalworking equipment. For example, E-CYCLE Environmental in California has invested their resources into creating an all-inclusive solution to avoid your metalworking equipment from ending up in the landfill. They provide exceptional services in managing the recycling processes of plastic, wood, glass, metal and large equipment.

How to Price Used Metalworking Equipment:

If you own a piece or multiple pieces of metalworking equipment, then you need to understand its valuation in case you wish to sell it to make room for new equipment. When it comes to appraising your used metalworking equipment, you have the option to go to a professional appraiser, such as the Association of Machinery and Equipment Appraisers (AMEA), who are a premier international organization that employ expertise industry knowledge when appraising your used metalworking equipment.

One thing to consider when selling your metalworking equipment in California is how tariff on steel has impacted equipment sales. Jock O'Connell, international trade adviser at Beacon Economics, argues that tariffs imposed on the steel industry in California will not only drive up imported steel and aluminum prices, but also increase prices on domestic steel, which would increase cost of manufacturing projects; ultimately, increasing prices for metalworking equipment. 

Ever since the Trump administration implemented the 25% tariff, metalworking equipment has been greatly impacted because steel is consistently used in creating the equipment used in metalworking processes. For example, according to American Machine Tools blog, JET Tools Company and Birmingham Machine Tools have raised their prices for Chinese manufactured metalworking equipment by 20% since the steel tariffs were implemented. Thus, metalworking equipment is in high demand as is its value. 

Accordingly, here are a number of important factors that will help you determine the valuation of your metalworking equipment:

  • Manufacturer: There are many different equipment dealers all of whom occupy their own place within the market. The idea here is to evaluate how the manufacturer is perceived in the marketplace. CNC machine manufacturers such as DMG Mori and Yamazaki Mazak are world renowned and their equipment is reliable and reputed; therefore, they are bound to be more valuable. Most importantly, you want to consider if the manufacturer still makes spare parts for the equipment you are selling and whether the manufacturer provides technical support in case a problem was to arise. Remember, a piece of equipment can be from renowned manufacturer and have excellent operational success; but, if you can’t find anyone credible to provide parts and service, then the value of the equipment will be reduced as a result.
  • Model & Age: Building on from identifying manufacturer, it is important to know the model and age of the equipment you are selling. The model and age of the equipment is very important because you get a good idea of where the equipment stands in comparison to new technology. For example, engine lathes have existed in one form or another since conception; while others, such as the CNC five axis vertical machine is more recent and advanced. If the equipment is more general and is still widely used then, it will sell easily in comparison to something more specialized who’s technology has been updated; therefore, making it a piece of equipment that will be harder to sell.
  • Usage: This is a very important factor because the same machine can be valued differently depending on the environment in which it is used. An average machine tool runs 2,000 hours per year in one shift; that is, eight hour per day, five days a week. Two identical pieces of equipment of the same age can’t be valued equally because there will always be a difference in how they were used. Moreover, buyers purchase equipment based on what their needs are. For example, sort term manufacturers will not be interested in purchasing a CNC machine because they do not require automated precision; whereas, manufacturers that have a large production rate would value from the accuracy up to the micrometer. Essentially, the greater the capability and technology of the equipment, the greater the price and skill-set required from the operator.
  • Condition: In order for a piece of equipment to function properly over a long period of time, it requires regular maintenance. In the world of machine tools, this means you need to take preventative measures to ensure your machine remains problem free. The level of maintenance a machine requires is related not only to its usage but also to the type of material it has been cutting; for example, aluminum versus cast iron.
  • Original Purchase Price: The piece of equipment may be specialized to the company and of little value to other companies when selling. Or the equipment may have been purchased with additional functions which had value to the original owner but not to the future ones; such as, specialized fixtures.

Conclusion:

To summarize, the metalworking industry is an integral part of California's identity and economy. As manufacturing processes are increasing, there is a growing demand for metalworking equipment. If you want to sell your metalworking equipment in California, we hope the guideline outlined above will assist you in identifying the selling process in California, how to value your metalworking equipment; and, how to use online auction marketplaces for best results. 

 

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