Is Consolidation Good for Used Equipment Buyers and Sellers?
Yes and no.
Take Ritchie Bros. as the most obvious example of an aggressive consolidation strategy. In recent years, they acquired several smaller auction houses. Then, last year, they purchased fellow industry powerhouse IronPlanet. As a used equipment buyer and seller, you may see pros and cons to these developments, depending on your specific situation at a given time.
With consolidation, you have more options from one organization when looking to buy used equipment. More units and like units to choose from — onsite or online — to meet your needs. More auction locations. More auction dates throughout the year. More representatives to serve you.
As the big get bigger, they also have more resources to build on or create new offerings for you. IronPlanet’s IronClad Assurance equipment condition certification, for example, may give you peace of mind as a buyer, and help you receive more for your equipment when you’re selling. Additionally, greater financial resources can help a large company handle and guarantee a package deal for your equipment easier than a smaller auctioneer can.
Generally, consolidation can also allow for more single-source onsite and online channels for the buying and selling of used equipment — plus a range of “buy it now price” and “make an offer price” ways to approach asset disposition.
Whether you’re buying or selling, consolidation reduces the number of companies competing for your business. That tilts the scales in their favor in terms of setting commissions, policies and offers because you have fewer options for negotiating what you want. Plus, when a company has a massive inventory, they can opt to be less interested in what you’re selling.
The people you’re dealing with are an issue, too. The larger the company, the more representatives, equipment inspectors and other personnel they need. That can mean an influx of a younger, less experienced team that may not have the depth of knowledge you need when you’re acquiring or selling used equipment.
Further, it takes a lot of used equipment inventory to keep a large, consolidated “machine” running. If you’re buying, you may have to wade through a lot of undesirable, high-hour, outdated equipment.
Separate from consolidation as an issue, onsite and online auctions can have their own drawbacks for buyers and sellers, regarding auction timing, travel and transport costs and more.
The independent alternative
IEDA member Tal Weberg at Seattle Tractor International, Ravensdale, WA, said he feels as strongly as ever about the attractive buying and selling option independent used equipment dealers like himself provide for contractors, despite changes in the industry. “We develop real relationships with contractors and have a thorough understanding of their needs,” said Weberg. “Unlike trying to talk with some larger companies, you can pick up the phone and go directly to the guy who was part of making an offer or setting a policy and is willing to be flexible enough to really make a situation great for the customer. I think independent dealers are always ready, too, to go the extra mile, handling as many equipment search, freight and transport details as needed to help a contractor out.”
Your IEDA member used equipment dealer operates by a written code of ethics. They’ll provide you with a straightforward, honest assessment of each piece of equipment they have for sale — or that you want to sell — and will negotiate its price fairly with you.
They also offer expert advice and service to find equipment that’s not on their lot. They have many resources, including fellow IEDA members, to locate exactly what you want.
For a list of IEDA members in your area, visit iedagroup.com/our_members.