Mark Weston, partner in our machinery and business assets department explores the rise of online auctions and how they can facilitate greater returns.
It is not unusual for companies to have unwanted or unused plant and equipment. For some it may be the result of voluntarily closing the business for retirement, whilst others may be introducing new methods of operation resulting in surplus equipment.
For decades, contractors have taken advantage of various methods of sale to dispose of such equipment and raise capital for reinvestment in new machinery, property or other assets.
The most important thing of course is to find the best method to generate the highest returns – which is why it becomes important to enlist the services of a specialist machinery and business asset surveyor.
Surveyors will have not just the knowledge, but also the insight and contacts to generate the highest possible price for sellers. Based on a wide range of factors including demand, condition, location and estimated value, they may use those relationships to arrange a private sale, or they may opt to sell in an auction.
Specialist auctions have been held across the UK for years, giving buyers the chance to bid for equipment in person or via the telephone or internet. As the internet became commonplace at the end of 20th century, buyers soon realised that they didn’t need to attend the auction at all. ‘Webcast bidding’, where people place bids on lots via the internet, became more popular and saleroom numbers were dwindling.
Like eBay, online auction platforms open up the sale to a much wider audience, allowing increased competition and the opportunity for a higher price. Previously, of course, auction lots were restricted to a small number of buyers in the auction room, or any offers made in advance of the auction.
Online auctions offer the same functionality as mainstream auction sites, including the ability to place maximum bids in the same way as a conventional commissioned bid, and it is clear to see how they offer greater convenience for both the buyer and the seller, especially for heavy, bulky equipment which is common in many sectors that we deal with.
Viewings can usually be arranged as part of a pre-arranged viewing day, although many buyers will not even bother thanks to the level of detail provided in online auction catalogues compared to conventional catalogues.
It is safe to say that online platforms, facilitated by the rise of smart phones and handheld internet connectivity will continue to change the very concept of auctions beyond recognition and their success cannot be ignored.
Click here to see important considerations when selling plant and machinery at auction.