If you’re selling construction equipment, you probably have one big question on your mind: how do I get the most money for my machines? To find out, just keep reading! Our 10 top tips for selling used construction equipment won’t just take the stress out of your selling process, they’ll help you make a profit in no time.
1. Find an Auction
That’s right—the first thing you want to do is find an auction. Though you can sell your construction equipment individually and on your own, you’ll have much better luck with your items at an auction. Why? Well, for one thing, selling on your own gives you more cons than pros by providing the additional problems of:
• Finding a Buyer Pool
• Negotiating Prices
Finding qualified buyers is difficult enough, but even on the assumption that you find a sufficient amount of buyers… how will your newly-sold equipment be transported? Is your buyer prepared to come to collect it himself? Will you be responsible for hauling it to him? Beyond that, there remains the question of price. Even if you know what your equipment is worth, you may be unable to find a buyer willing to pay the full value of your machinery. This could leave you selling at a loss, and that’s the last thing you want.
Auctions, on the other hand, are not only more accessible, but they also give you access to better resources. Though you may come across some in-person heavy equipment auctions in your daily life, most are conducted online. This gives you an awesome advantage because now your equipment can be viewed by potential buyers around the world.
You also don’t have to worry about negotiating prices or tracking down the buyers yourself. Though you may still have some transportation responsibilities, this is rare and only applicable in certain cases; most auctions will have a pre-arranged transportation system in place.
The only downside of selling through an auction? It may take between 10-30 days for you to receive payment for your items. That’s all! So if you’re looking to receive instant payment for your equipment, auctions might not be ideal for you. But in every other scenario, your best bet is definitely an auction. It’s worth noting, though, that some in-person auctions done through auction houses also have a grace period for payments, so that might not be instant either.
2. Find the Type of Auction that Works Best for You
Generally speaking, there are two types of auctions: reserved and unreserved. Unreserved auctions are often referred to as “absolute auctions” because they provide a strong certainty of sale. They typically lead to more aggressive bidding, faster sales, and faster turnaround times. Plus, you don’t have to negotiate prices with the buyers! Reserved auctions, on the other hand, allow you to set a hidden reserve price which you can accept or reject at will, depending on the offers you like.
3. Evaluate your Equipment
What’s worse than never selling your equipment? Selling it only to realize you sold something you really needed. That’s why it’s critical that you take stock of your inventory and evaluate two things:
• The condition of the item
• The value of the item to your work
This will help you figure out what needs to be sold, what needs to be replaced, and—by assessing the condition of each item—what you’re likely to get for it.
4. Spruce up the Merchandise
No matter how you’re selling your equipment, it’s always a good idea to make sure the machinery is in optimum condition. You don’t have to worry about making it look like new—buyers purchasing used equipment have already adjusted their expectations accordingly—but cosmetic fixes like a good wash-down or a new coat of paint can go a long way towards making your equipment marketable.
5. Be Honest
This probably sounds like it goes without saying, but we’re going to say it anyway. If you’re selling your equipment individually, you probably wouldn’t get away with fibbing about your machine’s condition, so just don’t try it with an online auction either. If for no other reason, do it to make sure that your sale stays a sale, because you may get stuck with a refund demand if your buyer can prove that your machine wasn’t in the condition you promised.
6. Do your Research
If you’re selling through an auction for the first time, chances are, you don’t know everything that’s out there. That’s why it’s important to do a little checking around and find out which auction sites are the best and which can get you the most money for your product.
7. Meet with an Auction Rep
Meeting a representative from your chosen auction company is part of doing your due diligence, so see if you have the option to meet with a representative and ask them questions, either face-to-face or via Skype. This will give you a chance to check out some stuff you can’t find in online research and give you some peace of mind.
8. Check out the Paperwork
Most reputable auction companies will bring the right paperwork to their meeting with you—either in person or through email—but make sure you give it a good read-through before signing anything. The purpose of this paperwork is to confirm the auction company’s right to sell the item, plus your right to get paid.
9. Check for Tax Deferrals
Here’s a cool fact you might have not realized: selling used construction equipment might bring you a tax break! Under Internal Revenue Service Code 1031, you have the right to defer federal income taxes on the sale of equipment, provided that you replace it with similar equipment within six months. (And since you probably will, that’s a great deal!)
10. Learn How to Price Your Item
Most auction companies will allow you the option to set an opening, win it now, or reserve price, but it’s up to you to figure out which one works best for you. You can learn more about these prices and how they work here.
Each piece of used construction equipment is different, but these basic steps can give you a guideline to follow as you begin selling yours. Follow these steps to get the best return on your equipment investment!