Inspections: A Buyer’s Asset, Not AdversaryBy Franklin Langham, Director of Financial Services for IronPlanet
When preparing to sell your inventory of older equipment, inspections are not something to dread or overlook, but rather they should be viewed as an integral selling tool. Inspections are not a hindrance used solely as a spotlight on the wear and tear that comes naturally to equipment over time. They’re an asset to sellers as a marketing platform, opportunity to increase your audience of potential buyers, means to achieve higher sales figures and much more.
Standing Out from the Competition
As buyers consider purchasing previously owned equipment, there’s a natural tendency to be concerned about hidden problems with the item, which can lead to even greater hidden costs. The used car salesman stereotype of being sold a “lemon” that will cost far more in repairs than what was bargained for often lurks in the backs of buyers’ minds. With third party inspections, buyers are provided with the comfort of full disclosure of the current condition of the equipment. As opposed to sellers without inspections, you’re a seller whose products can be trusted. So while your equipment might have a few scratches, leaks or need an oil change, buyers are fully aware of the exact condition. If you share the anticipated wear and tear that your equipment has achieved over time, buyers will feel secure in knowing the current condition versus concern that there’s a hidden issue they’ll be paying for once the product is in use.
While individual sellers can use third party inspections as a differentiator from the competition, IronPlanet has further expanded upon the value of inspections with our IronClad Assurance. Before one of our sellers puts an item up for auction, we perform a comprehensive inspection ranging from overall appearance to oil sample analysis. Our inspectors also take a variety of pictures showcasing the equipment from all angles, providing a complete view of what’s for sale. The report and catalog of images are posted along with the item on our site for all potential buyers to review. We are the only auction company to inspect and guarantee that each piece is in the exact condition documented through our IronClad Assurance. With a large number of outlets through which to buy used equipment, buyers are seeking a company they can rely upon when making significant investments. Inspections and guarantees enable bidders to buy with confidence.
Increasing Sale Price
With the knowledge of the exact condition of the equipment, buyers feel greater comfort in the funds that they’re investing. Without the fear of hidden repair costs, there’s an increase in the level of commitment to the equipment and willingness to spend a greater amount on the product. Depending upon the age and wear on your particular pieces of equipment, the inspections can be instrumental in showcasing that an older item still operates at full capacity, which can further increase your sale. For those selling equipment online, whether independently or through an auction site such as IronPlanet, the online selling forum opens you up to a larger selection of buyers. Should those that purchase your equipment online not be local, the inspections will provide them with further ease in their making such a large purchase sight unseen, and once more drive up the price they’re willing to pay.
Expanding the Pool of Potential Buyers
Providing third party inspections of your equipment negates the need for buyers to travel to see the merchandise prior to purchase. In doing so, you’re no longer confined to selling on just a local level. Whether the buyer is a few blocks down the road or a few thousand miles away, they can see the exact quality of the equipment that they’re purchasing. By not traveling to purchase the equipment in person, these saved costs provide an increased flexibility in their purchase power.
Inspections assist in the introduction of your equipment to the international marketplace. With the construction boom that is taking place in South America, inspections are a key asset in reaching this growing market. A local construction company might not be as willing to pay as much for your backhoe as one in Brazil, Columbia or another country where the demand further outweighs the supply than is the case in the U.S. Utilize inspections to take advantage of potential buyer markets where the construction industry might have more funds to invest in equipment than domestic or even your local companies do. More than a third of the equipment up for auction at IronPlanet sells to buyers outside of the U.S., providing our sellers with opportunities to get better prices.
Comfort in Purchasing Leased Equipment
With leased equipment, items have typically been used by many different companies. Those using leased products instead of ones that they own are often viewed as not having the same concern for the care of the equipment. Regardless of the number of companies that have leased your equipment, inspections assure potential buyers of the exact condition of the item, alleviating any concerns about purchasing used equipment that was a rental instead of one that has only had one owner.
Incentive to Purchase Used vs. New
While construction is finally beginning to recover, companies still need to be conservative in their spending. Investing in inspected, previously owned equipment is more fiscally responsible than purchasing brand new products. Among the many ways that your potential buyers can utilize those savings is submitting lower bids to ideally lead to gaining more contracts, and hopefully the continued need to purchase more of your equipment.
When beginning to plan on how to best move older inventory to make room for the latest models in your leasing fleet, consider inspections an integral part of the process. Particularly as our economy is looking to move towards recovery, you want to take advantage of every opportunity to increase your sales opportunities.