Having an effective plan and process for any company liquidating assets is crucial. For those companies who plan to close the doors, a liquidation sale is commonly used to recover capital and avoid further monetary losses. Unfortunately some assets, such as heavy equipment, are difficult to liquidate and can quickly depreciate. Without a solid plan and a quick means of disposal, much of the value can be lost before being sold. In such a dilemma, a heavy equipment auction is often the best way to effectively liquidate these assets.
Liquidation Sale Preparation
Before any equipment assets can be sold in a liquidation sale, the following steps should be taken:
- Take Inventory – For businesses liquidating a large amount of equipment at various sites, the first step is to create an inventory of assets. This inventory should include documentation relating to each unit: such as proof of ownership, registration, maintenance record, insurance, etc., as this will be required by the auction company.
- Refurbishing – The next step that can be considered is reconditioning. Although not compulsory, it could potentially increase the machine’s value and draw more interest from buyers. There are different levels of refurbishing depending on how much is spent. As an example, refurbishing may be as simple as a few paint touch-ups to restore faded or chipped paint or as extensive as a complete engine tune-up, brake and tire replacement, etc. Sellers may also opt for a third party service to restore the equipment; however, many times respectable bidding companies offer refurbishing services for a certain fee. Rely on an experienced company to advise you, as to which items are worth the cost of repairs, to generate higher returns.
- Marketing – Marketing is the next step in this process and is the job of the auctioneer. Auction company personnel would travel to inspect and take photos of the equipment, gather specific details, and assess the vehicle’s condition. Advertising is often the most time-consuming part of this process as the equipment must be advertised to the correct groups of potential buyers. There are various avenues for advertising such as the internet, e-mail, newspaper ads, telemarketing, etc. Adequate time should be set aside for this task in order to attract the largest amount of potential buyers for an equipment auction. This serves to create competition and realize the highest returns.
- Location – Consider the logistics and other expenses involved. Sometimes equipment must be brought to the auction facilities to be easily inspected by interested buyers. Alternatively, the event may be held at a site where the equipment is located. In some situations, the seller’s best options is to use a combination of available options. Sell some on auction yards, auction miscellaneous tools and accessories at the seller’s warehouse location, and perhaps move a few unique pieces to an auction yard, to combine with other seller’s items, in a large consolidated sale. Online bidding is a must, so be sure you only consider auctioneers who have the capability of connecting with the world of internet buyers!
Liquidation sales quickly can be accomplished through a well organized process. The aggressive marketing strategy used, as well as the competitive atmosphere created during liquidation sales, generates the highest returns. Are you interested in selling or in buying through an auction event? Download our Seller’s Guide or our Buyer’s Guide to see some tips and suggestions from us.