The term liquidation sale brings to mind ideas of businesses in dire financial straits, getting rid of assets as quickly as possible to generate a lot of cash, usually to pay creditors. While it is an accurate definition of such a situation and one that is seen all too often due to economic conditions, there are other types of clearances as well. Although this term does not have any negative connotation, it is purely a means of selling merchandise or equipment quickly to generate capital whatever the purpose may be.
Often auctions are considered a fast way of moving items that must be sold immediately. Although true for many different items, it is not necessarily the case with heavy machinery. Of course, there will always be some companies needing to unload equipment as quickly as possible and heavy equipment auctions are definitely one of the best places to do this. It is also very common for an auction venue to be used by businesses needing to upgrade equipment which can only be done once older units have been sold.
Types of Sales
Some of the liquidation selling opportunities that exist include:
- Auctions – For some companies, auctions are simply the best way to liquid heavy equipment. The positive side to selling such heavy equipment in this manner is: great exposure, many buyers, and rapid completion of a sale in a matter of minutes once the gavel falls. The minus is the possibility of getting bids which are lower than the actual value, although most auctions offer a “no-sale” cut-off amount to protect a seller's investment.
- Orderly Liquidation – This is basically a standard sale. Items are offered for purchase at a set amount and are not sold until that amount is offered. There could be some price haggling, but in general, such sales are either based on bidding nor display any kind of urgency. When the machine sells, it sells – whether that takes two days or two years. For machines that are hard to find, exceptionally priced, or have other desirable tracks, selling in this fashion may not be much of a problem; for other items, it could be nearly impossible to complete a sale in such a manner. The direct sale of heavy equipment can be affected by a number of things such as location, a buyer's ability to obtain financing, etc .; with the right advertising, it is possible to sell anything directly.
- Sealed Bid – One last type of liquidation sale is through a sealed bid auction. With this type of transaction, merchandise offered for sale is available for inspection by interested buyers after which bids are individually accepted. It is a combination of an auction and straight sale, although bidders have no idea how much competitors have bid, which drives competition – and bids – upward. This generally only works for highlyought after items. In a marketplace with many of the same items, a sealed bid sale will get little attention.
While these different types of liquidation can be used by anyone, it is not the best choice for every selling situation. So it should be fairly easy to see why auctioning tend to be the best option for selling heavy and industrial equipment!