Selling With Purpose What Type of Equipment Auction is Best for You
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No matter why you’ve decided to sell your equipment, getting educated about the different types of equipment auctions should allow you to get a better deal on what you’re selling. By choosing the right type of equipment auction for your needs, you will be able to sell the items faster and get more money in exchange for the goods. Also, there are companies that can help you get in touch with prospective buyers, thus expediting the sales process even more. Before proceeding, however, it’s important to devise a general plan and decide on the right type of auction for you.
Formal types of auctions
For starters, let’s take a look at the most common formal types of equipment auctions. Note: these types of auctions mostly refer to their formal structure and don’t say as much about the phases and circumstances of the auction in question.
If you’re mainly interested in the latter, scroll down to the second part of the article where we reveal the informal types of auctions, as well as how to attract more eyeballs to them!
Owner sales
This type of equipment auction is rather straightforward; the owner wants to liquidate some of his assets, whether it be real estate or equipment. In most of the cases, this is a distress sale, and is often accompanied by the IRS or the bank. However, the court does usually not oversee them.
Depending on where you live, there may be different sets of requirements and standards to follow (such as the presence of asbestos and septic functionality in various sorts of equipment).
Much to the surprise of some, the equipment ownership does not exchange hands immediately. In certain cases, it’s normal to wait for up to 30 days.
Note: owner sales are sometimes referred to as the partnership dissolution sales (which is just another term some people prefer to use).
Bankruptcy sales
With this type of sales, the court gets involved. As the name implies, these auctions often come to be as a direct result of an owner’s financial situation (e.g. when the debts become too much to handle and the owner is forced to declare bankruptcy).
Immediately upon filing, the Trustee is responsible for liquidation of his or her assets and distributing the proceeds to the creditors based on a set of predetermined priorities.
It’s crucial to follow the local laws and regulations, so the exact process depends on these variables and can sometimes vary depending on the state you’re in.
Police auctions
If the equipment has been determined to be obtained through illegal means, the police can confiscate it and auction it off. This decision is final, so there is no way to get your hands on these items again, at least not lawfully.
It’s important to keep in mind that police auctions are not always about selling stolen or illegally obtained goods. Sometimes, the police decide to get on with the times and simply sell some of the outdated equipment or cars in their possession.
Bank ordered sales
When a bank ordered sale takes place, it’s the bank who owns a piece of equipment and decides to auction it off in order to liquidate it.
In case the reserve is not met and the bidders aren’t willing to offer enough, the bank will “buy in” the property and take possession of it. If the bank decides this is the correct route to take, it’s not uncommon to see these pieces of equipment re-auctioned at a later date.
However, no matter what happens, the bank remains the rightful owner of the equipment in question until settlement is reached.
Sheriff’s sales
This type of auction is ordered by the court. As the name itself implies, the Sheriff’s office will be overseeing the entire event, which means you can expect the event to have a formal structure.
In legal terms, Sheriff’s sales are ordered by the court in order to satisfy a judgment and/or a tax lien. Either that, or to facilitate a tax sale or a foreclosure. The local Sheriff is the figure with the authority to manage and decide what’s about to happen should disagreements arise.
As for how long it takes to transfer the ownership to another person, sometimes, even a couple of months’ worth of waiting is to be expected.
Secured creditor sales
When it comes to secured loans, the secured creditor is always acting based on certain rights. One of them is having the ability to seize and sell the collateral to cover the debt.
Of course, there are certain rules to be followed. For starters, everyone involved (debtor, guarantors, junior lien holders, etc.) should notified about when the date the auction is set to take place. Apart from that, the sale should reach a conclusion within a reasonable time-frame.
The debtor is the owner of the property, but upon the default of the loan, the secured creditor may seize it and sell it as needed or deemed necessary.
Types of auctions in relation to the auction’s structure
These types of auctions mainly apply to these equipment owners who enter the process voluntarily and aren’t in such a rush (or legally pressured) to make a sale. Now, bear in mind that it’s possible to combine multiple auction types in a single type of auction, which is an interesting option, given that things are much less formal.
Let’s explore what you can do with them:
Online auctions
Online auctions are great, since they are designed to attract the potential buyers who aren’t able to attend your auction in person. But giving them the option of bidding online, the physical barrier of distance is effectively dealt with, and you automatically get access to a much wider audience of potential customers.
Many online platforms now support this (with eBay being the most popular example), so you don’t even need to code your own platform to do it. In fact, most auctions today have some kind of an online element to them, since they tend to be very efficient and you don’t need to hire a professional to pull them off.
Besides, who wants to travel to another part of the country, place a bid, then not having enough funds to win the auction? Bidding online is much more time-efficient and the idea of being able to place a bid from the comfort of your chair is quite appealing.
Webcast auctions
Webcast auctions are basically a mix of online and offline bidding. Some would say they are the best of both worlds. If you prefer to be present and bid in the spur of the moment, you can. If you believe that watching the show unfold behind a computer screen allows you to make better decisions, that is fine as well.
The great thing that webcast auctions allow for is that they connect the offline and online bidding sphere and tie it into a complete and well-rounded event for everyone to enjoy. Those who prefer the adventure and thrill of bidding right there and then and socializing with others who decided to join in on the action, have the option of doing so without taking away the comfort of those who would rather take far from the comfort of a computer chair.
In other words, everyone is happy!
On-site only auctions
Sitting at the opposite side of the spectrum, we have the on-site only auctions. Since the lack of an internet chat makes things a bit easier to manage, these are arguably a bit less demanding to organize. However, you have to take into account that by choosing this route, you’re limiting yourself only to those potential buyers who are physically located in the local area.
If you’re selling something only the locals would be interested in, depending on other factors you need to take into consideration, hosting an on-site only auction could very well be the smartest way to go. It’s basically a tradeoff between how demanding it is to organize and the amount of potential buyers you can reach.
In case you know you’re only to be selling equipment to local business owners, on-site only auctions are actually great. However, you’re still going to need to make sure that the local audience gets to know about them; the more people you reach, the more people will attend the event, and the more money you’re going to make in the end.
A quick word on getting your auction noticed
Certain companies will help you take advantage of additional channels through which you can get in touch with your potential buyers (such as the ones you can see here at Equify, LLC). In the end, without a good way of promoting your auction, how are you going to attract the right type of buyers with money to spend?
You should also be on the lookout for other ways through which you can promote your auction. Posting flyers around your local area can be a good way to get the ball rolling, as oldschool as it may sound. Of course, letting other people know through modern means of advertising (like Facebook) can bring you the desired results even faster.
Conclusion
With the right plan in mind, selling your equipment can be quite fun, even though organizing everything will unavoidably take a bit of work. At the same time, however, an auction is also a great opportunity to socialize with like-minded individuals and meet potential business partners, so looking at it with a positive mindset will make things much more enjoyable.
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