Construction equipment dealers are increasingly bypassing third-party auctioneers to dispose of used machines themselves. The do-it-yourself auction strategy can both maintain valued customers and groom future buyers. It additionally enables dealers to forgo commission fees, which can run 12% to 15% of the final auction price although costs climb higher for smaller machinery and first-time clients, say industry experts. Equipment requiring pre-auction preparation and repair can increase total fees, too.
"Everyone wants to be in the auction business," says James J. Jeter, president IronPlanet Inc., a Pleasanton, Calif.-based, 11-year-old Internet auctioneer. "But, it's not as easy as it seems. It has taken us a long time for us to cultivate our supply and demand network. The key is having the liquidity to drive the price performance to make the economics work."