Make Money, Clear SpaceSell Equipment at AuctionMake Money, Clear SpaceSell Equipment at Auction
In the past, auctions were used almost exclusively for liquidation of companies in dire straits. Not so today. Thanks to the advancements in technology, there has been a major shift in the paradigm. Auctions have evolved into widely accepted, respectable business solutions.
April 6, 2015
Many manufacturers are at a point where they need to trim their sails in regards to surplus equipment. They know it is time to clear the floor of idle pieces and dispose of equipment units and/or entire lines that no longer fit. The situation is often bothersome, no longer beneficial, and it presents unwanted limitations. Change is urgently needed. However, the problem lingers because the manufacturer doesn’t have a process in place to solve the issue.
The good news is there is a solution for this dilemma: put the items up for auction. In the past, auctions were used almost exclusively for liquidation of companies in dire straits. They were considered by many to be shameful and shady final exits for companies, and they were also rumored to be rigged. Not so today. Thanks to the advancements in technology, there has been a major shift in the paradigm. Auctions have evolved into widely accepted, respectable business solutions. There are online auctions where everything from coffee mugs to castles are marketed. Buyers need not leave their offices. They can do their research, shop for market prices and become totally ready to purchase when they enter the auction, and it’s all done online. The auction experience holds a lot of promise and excitement. It especially lends itself to the needs of manufacturers. It offers the seller an excellent opportunity to quickly and easily free up valuable floor space by moving out unwanted surplus equipment fast, and for cash. It offers the buyer a huge opportunity to acquire good used equipment at a fraction of the new price—and they can get it immediately.
The first step in the process of getting equipment to auction is to find the right auction partner. Companies should check out the ones they’ve heard favorable comments about—their qualifications, reputation, references and track record. Then, they should meet with the candidates and see what specifically they can offer. For example, if a company’s needs include disposing of a few items, or a just a line, it should ensure its partner has a full suite of proven auction solutions. No longer is it required for an entire plant to be disposed of. The processes of auction have become so refined and versatile that even very small needs can be effectively and efficiently addressed. With specialty, new style auction companies, just a few items can be bundled with related pieces from other sources to make a large sale. Or, the pieces may be more suitable for a mini-auction.
The right partner is critical. They need to be on top of the market at all times with solid industry connections. The value of their expertise is in the details. It is imperative for them to be skilled at creating marketplaces that attract qualified buyers on a consistent basis. This will afford them the ability to be on point with their advice, which in turn will expedite the sale of equipment and maximize the cash a company receives for it. To keep ahead of the curve, going for a long-term relationship with the partner is preferable. That way, a company won’t need to keep reinventing the wheel each time it has surplus equipment needs.
An additional item that will need attention includes auction agreements; each auction professional will have different terms in their contracts, so do go over them carefully. Most have flexibility and can be tailored to fit one’s situation. Companies should be sure that the process works for them—it will be the basis for mutual trust between a company and its partner, and it will be key for a continued successful relationship.
Once a partner is selected, he or she will need a list of items the company wants moved, complete with full descriptions, photos and videos (which can be done on a smartphone with a good camera). The more information provided, and the better the quality of photos, the greater chance of catching the eye of the buyers. Also, if a company has a price in mind for its pieces, it should let the partner know. This input will help when partner determines reserve pricing and starting bids. Once the list is handed over, the company’s part is finished. It’s now up to the experts. The auction partner will take over from here. He/she will decide on how to place equipment, as well as the auction process that will be used for its disposal. Assembling the collection of equipment, calculating a preferred start and end date for the auction, developing and implementing effective communications to notify and attract buyers, and setting up the format for the sale are all now the responsibility of the partner. Once the auction has taken place, the partner will then move forward in accepting bids, collecting on sales, paying owners, and arranging to have assets moved and conveyed to purchasers.
With this new process in place, the change can be made with ease. The old equipment is gone, valuable manufacturing space has been reclaimed, and the investment recovery is in the bank. Companies can open the door to new choices, options and freedom to continue advancements in manufacturing.
Chris Hillseth is president of Chris Hillseth Enterprises and has nearly 30 years of his own business experience specializing in pharmaceutical and nutraceutical manufacturing equipment.
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