Can Auction Process Be A “Win-Win” For Both Buyers And Sellers?

While the preowned industrial asset market can fluctuate depending on various factors such as economic conditions, industry demand, and supply, the process of liquidating or buying preowned industrial asset is far from an impulse decision. There are several factors that needs to be kept in mind to leverage the auction process to sell/procure preowned industrial assets. As a seller or buyer, one needs to do research, validate value, understand the bidding strategy, seek professional support, and work the total cost of asset sale/purchase.

Let’s first look at the seller’s perspective to ensure maximum value for their assets along these factors:

• Research: Before the auction, research the assets that will be available and determine their condition, value, and potential uses. You will also understand the demand and supply of your kind of asset. Understand the user feedback and usage concerns, and any critical dependencies like upstream or downstream process dependence. This will help you set a budget/price expectation, the story to attract and convince a buyer and winning the trust of a platform you would use.

• Preview: If possible, attend previews of similar assets before you offer your asset for auction. Many platforms offer you an authentic virtual preview option. This will give you a better idea of their condition and help you assess their value.

• Listing strategy: Set an expectation and lower limit and stick to it. Be prepared to walk away if your lower limit is not met. Additionally, consider listing multiple assets together in a lot especially if they re complementary in nature. This will give the buyer higher confidence, lower total cost of owner ship and better perception of value, thus increasing your listing value.

• Inspection and Due Diligence: Once the auction is over and if you have sold your asset, it is important to offer an inspection of the assets to ensure they are in the condition your buyer expected it to be before finalizing the purchase. Keep the commercial documents and manuals etc handy. If you have retained the original packaging, do make sure that the buyer knows about it.This will improve the trust and assure the buyer of genuineness of the asset and professional upkeep.

• Professional Help: It’s a good idea to consider hiring a professional auction firm that specializes in preowned industrial assets as they have expertise in the field and can help you navigate the process. It is well known that they create much more value than the price they charge you for their service. It’s again a “win-win” for all the parties.

• Payment & Logistics: Be clear about the payment transport and organise their transportation and installation if needed. This will ensure that the transaction is complete and thorough.

Now, let us look at the buyer’s perspective to ensure maximum value for their dollar along these factors:

• Research: Before the auction, research the assets that will be available and determine their condition, value, and potential uses. This will help you set a budget and bid limit.

• Preview: If possible, attend a preview of the assets before the auction to inspect them in person. This will give you a better idea of their condition and help you assess their value.

• Bidding strategy: Set a budget and bid limit and stick to it. Be prepared to walk away if the price exceeds your limit. Sometimes there are possibility of getting a fire sale or low balling, but many a times, one fails to recognise the value compromises it may entail. Additionally, consider bidding on multiple assets to increase your chances of winning. This will help you avoid any regrets or post purchase dissonance.

• Inspection and Due Diligence: Once the auction is over and if you win the bid, it is important to do an inspection of the assets. This will ensure that your assets are in the condition you expect before finalizing the purchase.

• Professional Help: It’s a good idea to consider hiring a professional auction firm that specializes in preowned industrial assets as they have expertise in the field and can help you navigate the process. This will give you higher transparency, control and comfort in going through the buying process.

• Payment & Logistics: Be prepared to pay for the assets in a timely manner and arrange for their transportation and installation if needed. This will ensure that you get your asset in best time, condition, and comfort.

Overall, procuring preowned industrial assets through auction requires research, preparation, and a clear strategy to be successful. Looking at the two sides of the auction play together helps us understand the otherwise hidden nuances of the process. As a facilitator an auction platform can only continue to stay relevant if they can make this a “win-win” proposition.

As an outsider, it might seem like it’s an opportunistic play, but for a seasoned player it is an obvious approach to maximising value of exchange. As an old hand in this space, MachineryMax has made “win-win-win” a default value maximization process.