What You Need To Know About Selling At Auction
May 21, 2012 There are practical benefits to selling greenhouse equipment and structures at auction: simplicity, speed and a quick payoff.
“Usually when people decide to sell equipment, they want to cash out, or it’s time to retire,” says Doug Sheridan, vice president of Sheridan Realty and Auction Co., in Mason, Mich. “The seller needs to make sure there’s a stringent set of terms and conditions, like the winner pays for the item in full before removing it.”
Sell With Speed
When it comes to the speed factor, a grower in need of fast cash or more space can auction off equipment, trucks or other property within a short amount of time.
Sheridan recommends researching auction companies before deciding on one to use, and ask the following questions – particularly for a large auction with multiple pieces of equipment:
• How much is your marketing budget for advertising the auction?
• What kind of experience do you have in greenhouse equipment?
• How long will it take to prepare and hold the auction?
• Do I need to supply photos and a description, or will the auction company take care of that?
“The No. 1 thing we bring to the table is the ability to find the buyer,” Sheridan says. “That’s what we’re paid to do – we provide the platform for bidding, whether it’s live auction or online. The marketing and advertising is the thing that separates the different auctioneers in the business.”
Get More For Your Money
Part of the process is finding the right company for the auction and deciding which equipment will sell the best. Jason Parks, operations manager at Parks Brothers Farm in Van Buren, Ark., says his business has used auctions in the past to get rid of old, unused trucks and trailers.
“Sometimes we sold it for what we wanted, and sometimes we had to come down [in price] to move them,” he says, adding they chose a local farm equipment auction company. “It’s not the ideal way to sell old equipment, but it is either that, take it to the scrap yard or let it rust away out back.”
Larger lots of specialized equipment may have a better chance of being sold, and there are ways to make sure it’s worth your time and energy.
Auction Tips Of The Trade
A couple of keys to successful selling at auction include advertising and timing, Sheridan says. If an auction for greenhouse equipment is set for some time in April, the equipment likely won’t get nearly as many bids or the value that it would at an auction held during an off-peak time for the industry.
Sheridan’s company buys mailing lists and advertises in publications specific to the industry the auction is in for greater success.
“We understand some of those unique, niche businesses require target marketing. If you have a specialty greenhouse that does unique things, you have to target those flower growers,” Sheridan says.
It depends on the size of the auction, but Sheridan says his company takes about five to seven weeks for preparation of the auction. They can take place online or in person, but the information is listed online for each.
Set The Right Price
Valuation for equipment is tricky, too. Sheridan recommends taking into account the age and use of the equipment before placing a minimum value to it. He uses tractors as an example.
“You can have an older tractor with low hours in use that holds its value immensely. However, a newer tractor run every day has lost its value. It’s hard to say. A lot of it is hinged on the condition of that item,” Sheridan says. “The other thing that affects value is obsolescence – is that piece of equipment even being used today? There may be a newer product out there that has replaced it.”
One final advantage to an auction is getting rid of all your equipment, not just the fast-selling pieces. If you sell it as an entire lot, the auction gets rid of the equipment that otherwise may not have sold if the grower was negotiating each piece independently.
“At an auction, the beauty of it is it can all happen on one day. Sell everything and they’re paid within seven to 10 days with a full settlement check,” Sheridan says.
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