Ritchie Bros: Good time to auction
First publishedon www.AggBusiness.com
A Ritchie Bros. Donington Park auction
Ritchie Bros. is a Canadian-founded global asset management and disposition company, offering customers multiple onsite and online auction platforms for buying and selling used heavy construction and quarrying equipment, trucks and other assets. The company helps thousands of people around the world appraise, sell, inspect, buy, refurbish, ship and finance heavy equipment, trucks, and other assets every month.
Below, Rupert Craven, Ritchie Bros. sales director UK and Ireland, highlights five key reasons why now is the best time to sell your used construction machinery at an international auction.
One: It’s the right time to sell
Why is there currently such a great opportunity? There are several trends behind the favourable market conditions. Sales of new machinery are holding up in the traditional large economies in Europe, such as the UK and Germany. Companies are relatively affluent; there’s a lot of work available; finance is cheap and easily arranged. Buying new is affordable. A machine moved on after three to five years use, typically enjoys another two to three lives.
How is this affecting the market? Buying new created a cascade of used machinery globally. When an economy is booming there’s a ready supply competitively priced. The advantage for buyers and sellers is availability. A customer buying on the day at our auctions can have the machine working on site tomorrow. Purchasing new may involve a long order process and a significant wait if stock is unavailable.
Rupert Craven catching bids in Donington Park
Two: It’s a clear trend at Ritchie Bros.’ auctions
Why the big growth in new customers? The increase in out-of-country buyers at UK auctions is substantial. Last year achieved a record, with the highest number of non-UK buyers in attendance - part of a clear upward trend. The main driver since the middle of 2016, has been in the attractive exchange rate for the pound putting the prices up. A large proportion of machinery goes abroad, maintaining the price level for UK sellers.
Which countries are driving the market? From our figures, five countries provide the best opportunities for sellers. Poland is clearly number one; reflecting its growing economy and position as a major trading point; likewise, the Netherlands. The recovering economies of Ireland, Spain and Romania, whose stock of machinery was massively reduced, complete the top five. They are targeting growth, preferring cheaper second-hand machinery due to the exchange rate. The predominant demand is for excavators of all sizes and telehandlers.
Three: It’s a simple, convenient solution
Why is an auction your best solution? Ritchie Bros. has been providing transparent auctions for nearly sixty years. The auction is a benchmark: tried, trusted, and highly-valued. We keep all transactions simple to deliver clarity at every stage and clear provenance. Getting things done quickly is key. Our UK auctions are well established and it’s cheap to move machinery to our centrally-located yard. Any machine to be sold has photos and descriptions. Potential buyers can do their own due diligence – remotely if they wish. That some customers see no requirement to do this in person is evidence of trust. Certainty of sale is also a prime factor.
What else can I do? Disposition needs may vary. Offering options is increasingly important. We deliver a range of flexible solutions for different markets. Online solutions complement and deliver new services. Ritchie Bros. provides three platforms: onsite unreserved auctions at Donington Park; Marketplace-E - an online marketplace that allows reserves as an intermediary step to an auction - and online auctions on IronPlanet, which are successful when geographic requirements are costly. With limited time and ability to travel internet purchase can be preferable.
A Volvo ADT being auctioned at Donington Park
Am I really selling to the world? Our auctions are genuinely global with worldwide databases of reputable buyers and sellers built over many years. Smaller local auctions can’t provide that level of global exposure.
Four: Time to realise the value of your idle machines?
Have I really got the time? Customers in the UK construction industry know they should be selling machinery but are too busy. Speed, efficiency and convenience are decisive: you simply need to call, or email. Your machines are collected and everything is taken care of. Payment is made within 21 days. If the choice is turning a machine worth tens of thousands of pounds into cash at market value at a competitive cost in less than a month, or leaving it standing idle in your yard; why wouldn’t you?
Five: Make the most of it while you can
How long will it last? Change is in the air… The current advantageous exchange rates won’t last forever. Minor changes in the pound’s value can be absorbed. If it becomes significantly stronger the rest is academic. It’s difficult to predict. Commodity prices are gaining ground, driving an appetite for machinery worldwide. The effects of Brexit remain unclear. Good economies drive the market. Negatives balance with the fact that a lot of our auctioned machinery goes outside of Europe. Exports are a main driver.
Whether these gains continue, or not; it’s crucial you should make the most of the current favourable situation - while you can.