Used equipment can be an attractive option for business owners who don’t require new machines right away. Not only does buying used equipment help save you money on the initial purchase cost, but it also includes operational and maintenance expenses associated with owning and running a piece of equipment.
When purchasing used equipment, there are four main sources to choose from: auctions, dealers, online marketplaces and private parties. Each offers its own advantages so it’s important to do your due diligence to find which option is best suited to you.
Dealers
Dealers of used equipment offer sales and service for construction, agricultural, forestry and other industrial machinery. Some may even provide parts sales.
Ken Taylor, owner of Ohio Caterpillar dealer Ohio CAT, states that the growth in rental companies has had a profound effect on his company’s business model. Rental now accounts for two fifths of their revenue and could expand further in the future, according to Taylor.
A high school diploma and knowledge of the construction industry, including effective sales techniques, are necessary for a career as an equipment dealer. Furthermore, having a degree from either technical school or community college in an applicable field can be advantageous.
Dealers face numerous difficulties in the parts supply chain – especially when competing against online retailers. A shortage of specialist tools and service manuals has become a major issue, leading to protests in the US, EU and Australia. Manufacturers value dealerships that take on large parts inventories because they can get those parts into customers’ hands faster than they could do it on their own.
Online Marketplaces
If you’re in the market for heavy equipment, whether to sell it or simply buy some, online marketplaces offer the perfect solution. These platforms make it simple for buyers and sellers to connect quickly and conveniently.
eBay is one of the world’s premier online marketplaces, connecting millions of sellers and buyers around the world. It provides a diverse selection of items from many sellers.
Another viable option is Facebook Marketplace. It’s free and boasts over 800 million users worldwide.
You can list your used equipment on this site by creating a seller’s account and uploading images of the asset you wish to sell. Once listed, potential buyers can view it from different angles in order to assess its condition.
The second-hand market is on the rise and becoming more and more popular. To stay safe and protect yourself against fraudsters and fake listings, it’s essential to keep an eye out for suspicious activity. Doing this will help build user trust and safeguard your reputation as well.
Private Parties
Producers seeking to buy or lease equipment have become increasingly interested in private sellers of used equipment. A recent AgDirect survey revealed that 75% of respondents have made at least one equipment purchase from a private seller within the past two years.
Purchasing equipment from a private party can be an economical solution to getting the machinery you need quickly. However, producers should be aware of some potential drawbacks and hazards involved with this route.
A great way to reduce your risks is by verifying the machine you’re purchasing is in working condition before making a commitment. In addition to checking for any obvious malfunctions, make sure to inquire about its service history and certifications.
Though buying equipment from a private party may seem like the simplest and cheapest option, it can also have significant financial repercussions for your business. In this instance, consider equipment financing options like sale-leasebacks.
Auctions
When a company needs to replace its equipment, they have two options: sell directly to end-users or through auctions. This may be an economical strategy if the item is in high demand or the seller knows of an interested buyer.
Online auctions are an increasingly attractive choice for companies looking to offload their used equipment. They provide several advantages over traditional on-site auctions, such as remote bidding capabilities.
However, it’s essential to be aware of potential pitfalls. Conduct a thorough inspection before bidding and be wary of sellers who fail to list the exact machinery they have for sale.
Most auction companies require payment in cash, certified funds or a check with a letter of credit prior to removal. Doing this helps guarantee that registration, settlement and removal take place quickly and without issue.
