Buy and sell

Now more than ever, rental company operators are turning to non-traditional methods of buying and selling rental equipment through live and online auctions as well as e-classifieds such as Craigslist and Kijiji.

Just about any piece of machinery found in a rental yard can be bought and sold through ebay, Craigslist or online auctions.

Rental companies that are willing to do some homework in order to minimize risk can save time and money by breaking out of their typical routine and embracing online technology when sourcing equipment or selling obsolete inventory.  “The nice thing about the auction process is that it is quick, simple and clean,” says Jeremy Dodd, co-owner of Coquitlam, B.C.-based Ableauctions Inc.
(www.ableauctions.com ).  Ableauctions is a privately owned company, operating out of Western Canada with four locations in B.C. and Alberta. The company specializes in both live and online auctions servicing small and large businesses as well as government agencies that are selling business assets or liquidating retail inventory including commercial and industrial tools and equipment.

“You can auction any product in sellable condition and you know that it is going to sell. You don’t have to worry about people coming back after the fact saying it wasn’t working; everything is sold as-is and there is no guarantee or warranty at all. The product will sell and move onto another owner and the seller will get paid out in cash,” says Dodd.

“Every company, especially rental companies, have products that aren’t moving and don’t justify the service that is going into them or the space they are taking up in the shop. If a rental company has 10 lawn mowers or four Bobcats in their rental fleet and they only seem to have two out at a time, there’s a lot of extra service to keep those extra units sitting around. It’s an advantage to streamline slow moving inventory to free up space, time, materials and cash-flow by not storing and maintaining product that isn’t going to see the rental market.”

“We see a full gamut of just about everything,” says Dodd.  “At Ableauctions, we sell a lot of tools, party and catering equipment and we bring out a real wide variety of buyers. That is the advantage that we bring.  When you have equipment that is traditional to the rental industry, you never know who the buyers are. And a lot of times it’s a guy that may not be able to afford a piece of commercial or contractor grade equipment, but if he sees it online or at the auction, he’ll pick it up. We really find there is a huge spin-off benefit from people that come to buy hardwood flooring and see a lawn mower. We get a lot of cross buying going on.”

Companies that are interested in selling equipment through Ableauctions can call them for a free assessment. They will visit your facility and provide a written proposal including what the seller can expect to earn from auctioning their equipment.

Dodd explains, “From the phone call to the proposal is roughly three or four days. We conduct 20 -25 auctions a month so it is pretty easy to get product into any one of those auctions. The fees are directly determined by what the product is. If you come to us with your entire shop, we’ll work cheap. If you come to us with three or four pieces of equipment that aren’t in the best shape, then you are going to be paying a higher commission. Generally speaking it can be anywhere from five to 35 per cent.

In order to get the highest return, Dodd recommends that companies clean and service their products. “Make it as functional as you possibly can. Aesthetics plays a big part of the price. Be sure to remove any company decals or identification.”

Dodd explains that auctions offer a lot more to rental operators than just selling equipment, “Rental companies also buy a lot of those products from us. We get product from government agencies and a lot of it has very light use on it and can definitely go into a rental program.”

Aaron Sailer, co-owner of B.C.-based Star Rentals, has slowly and cautiously started to capitalize on buying and selling equipment over the Internet. The company, which has five locations throughout Metro Vancouver and the Fraser Valley, with 17 trucks on the road and 46 employees, will list excess equipment on their own website (www.starrentals.ca ) as well as on Craigslist. 

“It sells but you get the odd tire kickers,” says Sailer. “Some people just think they are going to get a really, really good deal. If you are selling junk, you will. But if you have a high quality piece of equipment, and you just have too much of it, it’s really hard to give it away for free. You have to stick with the fair market value.”

“If we have 30 items and we want to get rid of 10 of them, we just say ‘Craigslist them’.  We’ll take pictures, post them online and we’ll see what happens. We don’t do it a lot, but once in a while. For the most part they do sell, but if they don’t, they don’t. It’s not something we have to do and there are no hard costs involved. We’re not trying to liquidate our inventory and our bottom line assets. It’s what keeps us growing as a company.”

“We also buy equipment off of Craigslist,” says Sailer. “I’ll go through Craigslist and look for people selling pressure washers. Over the years I’ve had thousands of pressure washers pass through my hands and I can recognize a good one from a bad one. I won’t even look at the little electric ones. But if it has a good Honda on it, with a good pump for $200 or $300, I’ll pick up a few of them. As opposed to going out and buying one for $1500. If someone went out and bought a $2000 pressure washer and for whatever reason they want to sell it, whether it is an estate sale or what have you, if it is a good machine at a fair price, we’ll buy them, refurbish them and rent them out. But we won’t buy junk. It just doesn’t work. When people rent, they want high quality with a lot of power.”

Sailer continues, “We picked up some product on Ebay from a few companies that have gone out of business in the United States. A few weeks ago we bought some really high-end carpet cleaners from a cleaning company for 60 per cent of their cost. They are almost new. The company just picked them up last year and couldn’t get any work for them so they sold off the business. You can’t say no to stuff like that. And that’s where Ebay comes in handy.”

“We’ve even bought six Bobcat skidsteers off of Ebay last year. There was some shipping involved but it was worth it; I saved around $5000 a piece. I spent $1000 to fly out there to make sure what I was going to get. There was a pediatric nurse in Ohio and her boyfriend worked for a huge rental company. He was buying the Bobcats and refurbishing them in his own shop at home. He did all the hydraulics and engine work and tweaked them right up so they were almost new except for the paint. They donated all the profits to an orphanage.  It worked out all the way around and everyone was happy.”

With all the benefits of buying and selling online, Sailer has been bitten in the past and has some sound advice, “You have to be very careful about what you’re buying and who you’re buying from. We have bought stuff that wasn’t as it was advertised.  If it is a big purchase like the Bobcats, I’m not afraid to hop on a plane and fly out. I didn’t know if I was being reeled in or not so it was worth it to fly out there, rent a car and drive to their farm. I looked it up on Google Earth and I knew exactly where I was going. I rode up the next day and said ‘I’m Aaron from Vancouver!’ and she was kind of shocked to see me standing there! But it was everything she said it was going to be.”

Sailer recommends that rental companies use caution when buying and selling equipment over the Internet. “It’s a good tool if it’s used right. But you have to be careful because you can get burned.”

Your kids have been using Ebay to buy concert tickets for years now and chances are that a few of your staff have used Craigslist to find dates. However, there is a lot more to these online resources than ticket scalpers and hookups. They are easy, powerful and economical tools that, with a little creativity and common sense, can open up whole new opportunities to nearly any rental company across the country with little or no cost.

Rich Porayko is a professional writer and founding partner of Construction Creative, a marketing and communications company located in Metro Vancouver, B.C. richp@constructioncreative.com