By Sam Sterner
I spent the last two days at an auction site in Chicago, IL, and came home empty handed. An elevator company had recently relocated, and went to an auction house to liquidate their former facility. The building filled up fast on auction day, with 65 in house and another 80 online. The auction started in the former maintenance bay, and spiraled downward from there.
Now, it is hard to tell who is who at an auction, as people tend to stay to themselves. Talking with a few, I got the impression that there was a good mix of end users and resellers. That is what causes the issues. Once the auctioneers got to the warehouse equipment, all hell broke loose. Forklifts that didn’t work sold for $2,000 over retail. Scissor lifts were sold at new prices. Don’t even let me get started with the racking. Sections of used rack were sold at a retail price. That was without the 15% buyer premium and teardown cost that needed to be associated with the rack. This is where it is easy to be sucked in. Competition is human nature, and we always want to come out on top. It is hard to stand next to a person, and be outbid, or essentially “beat”. Auctions used to be “good deals”, where everything was a steal. Times have since changed, and people quickly learned how to make a quick buck flipping used equipment. How do you stop this? Homework, homework, homework. Set a limit, and don’t cross it no matter what. I set mine, and when outbid by $1,000, I backed out. The auctioneer asked if the line was really that thin. Was it? Of course! Because by adding just $1,000 to my bid, I really add $1,150 with buyer premium! Premiums are a slippery slope, and it adds up quick. It is a lesson that many forget when they get caught up in competition with others on auction sites.
Sam Sterner is the National Acquisitions Manager at SJF Material Handling in Winsted, MN. Please direct comments and questions to email@example.com.