what is the purpose of equipment auctions?

[Travis Conner]

This applies for tools too but I see auctions selling used bobcats, forklifts, excavators. etc. Usually they'll have a video posted online and I guess you can go look at the stuff in person or maybe just watch a demo before you bid. Anyways, my question is do they primarily use auctions to sell things that have problems that nobody wants? Why not just sell equipment used at a regular dealer?

[Bruce King]

I think there are lots of repossessed machines so the banks are hiring the auctioneer.
Other auctions are a good way to bring buyers together, generate excitement and get several items sold in one day.

[Ben Grefe]

Lots of businesses go out of business and there just isn’t a huge 2nd hand retail market for most of this stuff. I’ve bought 1 tool at one of these auctions and got to talk to teh people running them. It’s just an efficient way to quickly sell (liquidate) a bunch of material / tools. If a company is going bankrupt, this is the best way for the bank to recoup money fast.

I’m sure you could run a business buying tools at auction and reselling them, there’s room for a middle man; but I’m not sure how much profit you’d actually make.

[Richard Coers]

For businesses that have updated equipment, and want to get rid of the old, they don't want to deal with calls and buyers coming into the plant to inspect. Same goes when excess machinery has to be sold off. Many auctions are bankruptcy driven. I'm not sure there are many used equipment dealers these days.

[Jim Becker]

There are many reasons why equipment ends up at auction and it's an efficient way to sell things, especially "lots" of multiple pieces of equipment, etc. The reasons for selling can range from business liquidation to major upgrades to businesses moving and putting all new in or abandoned gear, etc. Like any buying activity, auctions are best approached with knowledge beforehand...it's easy to "score" something that's not actually worthy and also to miss something that's actually of value because one doesn't know enough about it. Most major auctions post information beforehand, so at least some level of research can be done by prospective buyers.

[Patrick Kane]

While what you suggest is probably the means of getting the most money for a particular item, its also very time intensive. Think about all the yahoos that will come out to kick tires and waste a person's time? As is mentioned above, most of the auctions i watch are liquidations. Company went belly up, or the original owner/founder is retiring and couldnt find someone to buy the business. Finally, you certainly can get lucky on some auctions and not have competition for a particular machine, but competition seems to be pretty steep these days. Frankly, i watch some machines sell for more at auction than i would pay on craigslist, and that isnt including the premiums and taxes! To that point, ive watched machines sell for New retail prices after premiums and taxes. In most cases, the owner can liquidate an enormous amount of 'stuff' for probably 80% of what they would get on the used market and do so in a month. Also, without lifting a finger.

[Bob Falk]

I bought a Bobcat at an auction about 13 years ago and it served me well with only minor issues. I sold it last year for more than I paid for it! Deals can be found, but so can lemons.

[Bill Dufour]

For bankruptcy a auction is one way to establish the real value of the assets with no under the table sales, at cheap prices, to friends to be bought back by a new company formed after the bankruptcy.
Bil lD

[Alex Zeller]

Think about it. How many tools do you have in your shop that you thought you would use but are taking up space that could be used by something different? For a hobbyist you would just list it on Craig's list and then deal with people who could be a potential buyer. That includes the tire kickers and the low ballers who are just wasting your time. For a hobbyist it's still usually worth it to maximize the sale price. But if your a small business and have plenty of work do you even have time to deal with it? Probably not.

I know with a larger company it starts to get into the area of fraud. For example an employee is asked to sell a no longer used tool and figures he can sell it to his buddy for a great price. An auction company is a good way to remove that. Another is a surplus company. I know that the large company I work for doesn't even buy tools directly. Even though we have a purchasing department they feel it's cheaper to just request it from a supply company. We tell them we need a 5/8" and 3/4" combination open end wrench and they search out which brand would be best for our intended use. It could be from Snap On or Craftsman.

Then there's the possibility of someone either rejecting it or trying to return it. Who wants to deal with a guy who says "you told me it ran fine when you took it out of service yet the motor makes a noise. I want my money back." Auctions are final. When you place a bid often it comes with the commitment of paying no matter what if you're the high bidder.

With covid prices are higher than they have been but before there was plenty of deals to be had. My PM66 with a Bosch router came from an internet auction. I paid just over $200 (with buyer's fee, loading charges, and gas to pick it up) and put another $100 into it. Other than it's not a SS it's dead accurate. I bought several other pieces for prices I couldn't pass up and didn't bid on stuff simply because it was too far away and shipping charges would of made it not worth it.

[johnny means]

Simply put, there's no money in used equipment stores. The costs of moving, storing, and showing used equipment would quickly eat into any potential sale prices.

[Patrick Kane]

Simply put, there's no money in used equipment stores. The costs of moving, storing, and showing used equipment would quickly eat into any potential sale prices.

I think Darcy does it for a living or to supplement his living, but his isnt so much buy and resell as it is buy, refurbish to like new, and then sell.

[Bruce Wrenn]

For earth moving equipment, the cost of relocating it across the country to next job, often out weighs the cost of selling and buying new at future job site. Some times, a machine was purchased to do one job, and might not be needed again anytime soon. Get it off the books. Plus if it's been fully depreciated, the it's book value is the same as junk value. An auction brings more than the salvage yard pays. When a building is finished and there are materials left over, often it costs more to move them than to buy new delivered. When we built our house (1980), I was able to buy surplus foundation blocks from my employer for $0.10 each, that cost $0.55 each. To move them to next job site would have cost more than new delivered

[Steve Rozmiarek]

Maybe surprisingly, lots of times the banks/sellers don't really care about the price, they just need a finite sale to establish a clear change of ownership of an asset to clear up a business liquidation or ownership change. Other times the machines sold are fully depreciated out on someones books, and are being sold for "scrap value". In that instance, if the scrap value sale is for more than the depreciated value, there is an additional tax ramification, so the seller may actually prefer a lower price with a finite sale date.

[Donald G. Burns]

I worked with a used equipment dealer some years ago and we'd go to auction held in situ when a company went out of business. Assuming some still being paid off then the banks would rather sell the heavy equipment in situ and not have to haul it off to a leased warehouse which cost money. Older equipment often wasn't worth my dealer friend buying, repairing and then trying to sell from his own warehouse. But an end user could pick up equipment and do the work themselves and save money vs. buying from a dealer too. It all comes down to money. Is it worth moving, repairing and warehousing or better to just scrap it or sell to an end user at auction.

[Warren Lake]

done tons of auctions, there were more after year 2000. Old way was live and day before was preview day. I was in most of the major shops in and around Toronto and surrounding areas. Took photos of all before torn apart. Sad every time to see 50 plus year businesses with 50-80 employees, poof they are gone. Huge respect for the time energy and cost of those shops only to turn around and in days be an empty space.

They were the top shops, much of the staff were trained older europeans. Now mostly online, its not as good as live. For one I knew who was at the auctions the crowd and what dealers were there, then even the auction companies had plants in the audience. Picked up enough machinery and still kick myself for the machines I didnt buy and should have followed me home. THere is no it works this way or that way, they are all different. It takes alot of time to do the auctions at least in the old day, preview day, check the machines then back next day and sometimes up to 9 hours in larger companies to get through it all. I have 100's of hours at auctions., I have photos of jigs and set ups of what shops set up and lots of it is brilliant.

You have some big auction companies down there and one of our canadian guys is partnered with one of them so his auctions are done through their system.

[andrew whicker]

I think it's hard to find deals on things people are familiar with: hand tools, power hand tools and 110v / 220v single phase stuff. If you go outside the realm of the comfortable, the deals are there. I see a lot of stuff coming from schools. Schools seem to have good 3 phase access and they spend money on nice tools. The price / quality ratio might still be worth it vs the price / quality you get with a plug and play single phase machine (if you don't have 3 ph power). 3 phase equip seems to always have higher quality per dollar spent than single phase.

And there are most definitely re-sellers in the industrial tool arena, but at this level you are either a very high end hobbyist or running a business. Example: https://www.advanced-machinery.com/online-store/Used-Woodworking-Machinery-c33343931

[Carroll Courtney]

Travis just north of you out here by Humble Tx is one of the largest equipment auctions I think on planet. This place is huge and also auction off huge equipment and as small as portable air compressor and they have financing if you see something you really need. Usually you don't have to worry about missing out on just that one machine cause there may be 100 of them. Really, there is an over pass right next to the place so I like to do a drive by which and I have seen cranes as tall as over pass,they bring in equipment from all over the world and everything sells. But its all on line cause I never see crowd there just few people. I don't know how this place works,never been there but dang its huge.

[Steve Rozmiarek]

Travis just north of you out here by Humble Tx is one of the largest equipment auctions I think on planet. This place is huge and also auction off huge equipment and as small as portable air compressor and they have financing if you see something you really need. Usually you don't have to worry about missing out on just that one machine cause there may be 100 of them. Really, there is an over pass right next to the place so I like to do a drive by which and I have seen cranes as tall as over pass,they bring in equipment from all over the world and everything sells. But its all on line cause I never see crowd there just few people. I don't know how this place works,never been there but dang its huge.


I think Richie Bros is the biggest one there is, locations worldwide.

[Neil Gaskin]

I've had mixed success with buying used equipment sight unseen. Most of the equipment i bought has arrived in working order but you have to know what you are buying and be willing to put some time in. Depending on cost it can make sense to me to buy something that needs a little fixing. Make sure to factor in the auction's cut which usually is not included in the bid price, it seems most of the auctions I've bought from add 10%.

As to why not sell to a dealer, if it is a liquidation and the bank is selling the items they do not want to mess with it, an auction company comes in and does all the work. The same can apply to a business going through an upgrade of a lot of equipment.

[Dave Lehnert]

Had a family member who passed with no kids. Sure we could have got more $$$ if we took the time to sell every piece of the estate. But we chose to sell everything to an auction house. (we did not have the auction) In one day EVERYTHING was sold and gone. Not having the stress of taking months selling things off individually was worth it 10 fold.