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Online Equipment Auctions Growing In Popularity
There's something exciting about bidding and buying equipment at an auction, and experienced auction buyers seem to have a knack for acquiring good machinery at bargain prices. What’s more, equipment auctions are big business. Auction giant Ritchie Bros. reported gross auction proceeds in 2007 of $3.19 billion.
Popular internet auctions allow anyone to participate without leaving home. However, it's one thing to buy a camera, painting, personal or household items on line, but quite another to bid thousands of dollars for a piece of construction equipment without ever seeing it.
Even so, big equipment auction companies have incorporated on line auctions in the businesses, and report that buyers are acquiring more and more equipment over the internet. Stephen Branch, vice president, marketing and sales strategy, Ritchie Bros. Auctioneers, and Mike Groves, senior vice president, North American sales, IronPlant, recently discussed their on line auctions of construction equipment. (NOTE: IronPlant conducts on-line auctions only; Ritchie Bros. holds both conventional and on-line auctions).
Here’s what they had to say:
Underground Construction: What role do on line auctions play today in the sales of construction equipment?
Stephen Branch, Ritchie Bros.: Analysts that watch our industry estimate that approximately $100 billion worth of used equipment changes hands each year around the world. Auctions – onsite and on line combined – probably account for about 5 percent of that. The first on line unreserved equipment auction was held by Ritchie Bros. Auctioneers in 2002. That year, we sold close to $77,000 worth of trucks and equipment through internet purchases. Just five years later – 2007 – we sold more than $600 million worth of trucks and equipment over the internet in one year.
On line auctions make it easy for customers to choose if they cannot attend one or more live events. This role has been increasing over the years as customers demand the flexibility of both on site and on line auctions over traditional auctions that offer just one or the other.