Deciding when to sell your industrial equipment at auction is a significant decision. Here are some signs that indicate it might be the right time to consider selling your industrial equipment through an auction:
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Equipment Obsolescence:
If your industrial equipment has become outdated or no longer meets the demands of your operations, it may be a good time to sell it. Upgrading to newer, more efficient equipment can improve productivity and reduce costs. Selling outdated industrial equipment at auction allows you to recoup some of your investment and make room for more advanced machinery.
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Financial Constraints:
If your business is facing financial challenges, selling surplus or underutilized industrial equipment can help generate much-needed cash flow. Auctions provide a swift and efficient way to convert assets into cash, allowing you to address immediate financial obligations or invest in other areas of your business.
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Downsizing or Restructuring:
If your business is downsizing or undergoing a restructuring process, you may have excess equipment that is no longer required. Rather than storing or maintaining equipment that isn’t being used, selling it at auction can help streamline your operations and free up valuable space and resources.
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Facility Relocation:
Relocating a facility presents an opportunity to evaluate your equipment needs. If it is more cost-effective to sell certain equipment and purchase new or used equipment at the new location, an auction can facilitate the transition. It can save you the hassle and expense of moving equipment that may not be suitable for the new facility.
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Changing Business Focus:
If your business is shifting its focus or entering a different industry, the equipment you currently have may no longer align with your new objectives. Selling the equipment at auction allows you to divest from your previous industry and invest in equipment that better suits your new business direction.
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Excess Inventory:
If you have surplus inventory or equipment that is not being used efficiently, it can tie up capital and resources. Selling excess equipment through an auction helps you liquidate the assets and optimize your inventory management, allowing you to reallocate resources to more profitable areas of your business.
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Maintenance and Repair Costs:
Aging equipment often requires increased maintenance and repair expenses. If the costs of keeping the equipment operational outweigh the benefits, it may be more prudent to sell it at auction. By doing so, you can avoid ongoing maintenance costs and potentially find buyers who can utilize the equipment more effectively.
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Industry Changes:
Technological advancements or shifts in industry standards may render certain types of equipment less relevant or in lower demand. If you anticipate a decline in the market value of your equipment due to these changes, it may be advantageous to sell before the depreciation occurs. An auction can attract buyers who specialize in your industry or who are specifically seeking the equipment you are selling.
Ultimately, the decision to sell your industrial equipment at auction should be based on a thorough assessment of your business needs, market conditions, and the potential benefits of selling. It’s advisable to consult with industry experts, auctioneers, or equipment appraisers to determine the optimal timing and approach for your specific situation.
What are My First Steps to Sell Industrial Equipment at Auction?
Once you decide to hire a professional auction company, start searching online for one that has experience in selling similar assets. Go to their website and search their past auctions. This will give you a good idea of their areas of expertise. Auction companies that have sold similar equipment will already have buyers in their database and will have knowledge of that asset class. Professional auctioneers are accustomed to working with time constraints, especially regarding getting out of a leased spaced by a certain date. Talk to at least two auction companies and compare their experience, trustworthiness, references and fees.
What are You Selling?
This is one of the first questions an auction professional will ask. Creating some sort of inventory will allow you to quickly identify the right professional to assist you. Another helpful tool is photos. Try to have photos available for some of the highlighted items. These can be forwarded to the auction company electronically.
Should I Start Selling What I Can to Friends and Associates?
If you want to sell everything yourself, go ahead and get started. If you want an auction company to be involved, don’t sell anything yet. Be sure to get a professional opinion regarding existing offers, especially those from “friends & family”. You will usually be better off to let the auction company sell everything, which will allow them to advertise a “complete liquidation”.
Remember, if your “friend” knows you are going to have an auction, and they want to buy something before the auction, you need to ask yourself, “why?” The obvious reason is they think they can get it cheaper before the auction. If you have contracted with an auction company, then you can reply “Oh, I would love to sell that to you now, but my hands are tied, I have an agreement with the auction company”. They can always bid in the auction and compete with everyone else.
Timeline
If you need to exit a leased space, or have another time constraint, you need to remember that auctions don’t happen overnight. Auctions take several weeks to set up, market, conduct and orchestrate removal. You should contact an auction company (or talk to several) as soon as you know for sure that you are ready for an auction.
Decision Makers
Who else in your business is needed to make the selling decisions? Does your spouse, relative or business partner need to be involved in the decision making process? Having these people identified and present at the beginning of the auction process will save you from repeating meetings.
Involvement
How involved do you plan to be in the sales process? Some sellers want regular updates on every step of the auction, and others want to sign a contract and start working on the next stage of their life. Knowing your own tendencies and desires for communication will help your peace of mind. There are 100’s of actions and decisions in successfully conducting an auction and auction professionals are happy to share as many or as few with sellers as they request.
Meeting the Auctioneer
It will be important for an auction company representative to do a walk-through of your business site before they present you with an auction proposal. If you plan to close your business, but you are still in operation and you have not made the closing known to the employees, let the auctioneer know that information, so they can be discrete during your meeting. If you cannot meet with the auction company representative in person, plan to have a “zoom” type call so you can visit “face to face”. It is important that you feel comfortable with any auction company you work with.
Before you meet with the auctioneer, make a list of questions you have regarding the auction and the process. An experienced auctioneer will seek to answer all of your questions and bring up points you may not have considered. You want to get all of your questions answered before you sign an auction agreement. If an auctioneer cannot answer a question to your satisfaction, you may want to get a quote from another company as well.
Would You Like to Visit with an Auction Professional?
A representative of Jones Swenson Auctions would be happy to review your potential auction situation. Call (512)261-3838 or go to JonesSwenson.com for a no obligation consultation.
