Should I Buy Material Handling Equipment at an Auction?
Authored by Bill DiMaio III
August 28, 2015
There are a multitude of reasons why you should not buy your Material Handling and Storage equipment at an auction.
Buying equipment at an auction is a very complex purchase process because the product in many cases is difficult to determine the value when presented to you at an auction. Frequently, you will be seated in a room and shown digital pictures rather than walking through the building stopping at the lot number to be auctioned. This allowed the buyers a last chance to view the product prior to bidding. Most auctions are now using pictures to allow internet buyers the same opportunity to bid while restricting site buyers from moving freely through the auction site without an escort. So the first question is:
Will the auctioneer and bidders walk with the auctioneer and view the products or will you be restricted from a final inspection of the products. In some cases you will be allowed to inspect for a few hours prior to the start of the auction. Not a good enough reason to seriously bid on products when you are rushed to inspect or ask questions.
One of the most important elements to a successful purchase at an auction is the inspection prior to the auction. All auction companies are at site several days in advance to setup and tag the products. Usually 1 to 2 days prior to the auction the general public is allowed to inspect and question the auctioneers about the specifics of the products and the bidding methods that will be. Take advantage of the opportunity so that you are not relying on a picture to determine your bid. The pictures are not taken by a professional photographer so they are not always going to show you enough details.
Auction companies usually tag the various products in a way that will require you to stay through most of the process. They do this by cleverly staging products. Typically small tools and gauges will be auctioned first. So if you not interested in tools you can take a chance and attend the auction later. By chance, I mean you would be guessing when the auctioneer will be showing your lot(s).. It’s very difficult to estimate because the bidding can be slow or very fast and only if you’re in attendance will you know. I’ll give you an incentive/tip about why you should attend from the first lot through to your lot. Another huge negative is that many auctions will not allow customers to pay until the end of the day or auction.
TIP- Bring a catalog of similar new products in the auction so you can refer to new prices for the tools that are being auctioned. Usually this will give you an indication as to the type of bidders. By type, I mean are they bidding higher or lower than the expected average auction price. At this point, you might decide not to continue or feel comfortable that you will be successful.
Most auctioneers are looking to recover at least 50% of the original product cost. In many cases they recover 100% -believe it or not. I’ve seen them recover more than 100% because of the speed and auction methods used. Good auctioneers are very fast and sing out in asking for a higher bid. His words are strung together without a pause so you can get very rattled if you are new to the process. Mistakes are frequent and sometimes very costly.
TIP- Another good indicator of product value is the overall look of the site and age of the products to be auctioned. Everything has a useful age which is the reason why you are attending the auction. The test is to determine if the value you are looking for and the value of the equipment is within reason. An example would be a forklift. Let’s say you are looking for a lift as a backup or might only be used 1-2 hours per day. Now how do you determine from a quick inspection of the vehicles whether it fits your needs. Well to start, you can check the look of the battery. You can check the miles driven. You can check the overall look of the forklift for signs of extreme wear and or neglect. The best check is to talk to one of the onsite maintenance people usually on site to assist at the auction. They will usually tell you what you want to know and demonstrate the vehicle.
American Surplus has been in the used and new material handling business for over 24 years selling to its customers now numbering over 35,000 nationwide. Rather than buying this equipment at an auction with no guarantees consider ASI who will get you the product you need at a certified lowest price . Speak with one of our Sales technician about your needs. You will be satisfied.