Auction Cautions

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Whether you’ve participated in an auction yourself or you’ve seen one on TV, it’s easy to understand how bidders get spend happy and pay exorbitantly large sums of money for items they might otherwise buy elsewhere or not at all.

The same goes for growers and the increasing number of industry auctions taking place these days. Say a grower attends an auction with no specific needs in mind. All he wants to do is pounce on items he perceives as bargains. The grower establishes a price he’s willing to pay and tells himself he won’t spend a penny over that price. When no one even approaches the grower’s set price, he seizes the moment and makes a sudden bid–on a greenhouse.

“Sold!” the auctioneer declares. The grower pumps his fist and puts on a beaming smile, thinking he just made a steal that would make Bernie Madoff proud. The deal is a steal, yes, but for whom?

“Some people who buy used aren’t really in the market for another greenhouse,” says Gordon Van Egmond, U.S. sales representative for Westbrook Greenhouse Systems. “They just come across a new opportunity and it seems like a really good price. Maybe they weren’t thinking about putting up another 20,000 square feet, but you’re at an auction and you’re excited.”

And, in many of these cases Van Egmond describes, the value that grower gets from such a purchase is less than the value he would have received had he done his homework and gone an alternative route.

“You’ve got to remember when you get an 18-year-old greenhouse, you’re getting 18-year-old motors, older technology, older venting systems,” Van Egmond says. “I’d say about 60 percent of growers realize their (auction) purchase was not worth it after the fact. When they tally up their bills, they realize they didn’t save that much compared to if they had bought new.”

Bill Vietas, vice president of sales for Rough Brothers, issues a word of caution to growers thinking about buying a greenhouse at auction, as well.
“It could be a great deal or it could be a bad deal,” he says. “Does it fit with your master plan in terms of height or width? A lot of people forget things like electrical and concrete that go in afterward. Is the building you’re moving up to code?”

Growers can’t possibly answer all of their structural questions on their own, but greenhouse manufacturers likely can. In the case of an auction, Van Egmond and Vietas both advise growers to call the manufacturer whose greenhouse is available and ask questions. See what the manufacturer thinks the greenhouse is worth and find out about all the little investments you’ll have to make if you purchase used.

“You wouldn’t look at a house and put an offer on one without knowing something about it,” Van Egmond says. “Why would you go to an auction and bid blindly on a greenhouse, especially if you’re an owner who hasn’t bought a new greenhouse in many years? You have no idea what the value is. Call your manufacturer–whoever it is–and ask what’s a new one’s worth. Because before you know it, you’re going to pay $60,000 for a used greenhouse when a new one is worth $80,000.”

Kevin Yanik is the former managing editor of Greenhouse Grower.
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