Blog Post 1: Smarter Tactics for an Advantage at any Auction
The following tips are meant to help you find the best deals on equipment at any auction, anywhere, not just with my company. I’ve been buying and selling at auctions for most of my adult life; and over the years I’ve picked up many helpful tricks of the trade. I can’t give away all my tricks, but I’m happy to pass along some good ones to help you get the best deals possible. Here’s just a few, I’ll post more in the future.
Vince Lombardi once said: “Football is a game of inches, and inches make the champion.” Think of these tips and tricks as inches in the auction game. These small gains in inches can add up quickly, and over time, will give you a measurable advantage over your competition. Let’s get started!
1. Know The Equipment More Than Your Competition: This may seem obvious, and it probably is. But there are more reasons at play here than many realize. The key is to study types, brands, and models of equipment that are most useful to you; then organically grow your product knowledge on those items. Become the authority on that particular equipment. Here’s just one example how that knowledge can serve you: Look for online advertised auctions with poor photography. Your knowledge of that equipment will enable you to spot clues in the pictures that non-experts will miss. This will help you in knowing what to bid on… and equally as important, what not to bid on. It can also improve your luck at in-person auctions by helping you decide which auctions to attend, and which not to attend. You can’t be in two places at once, so being able to make educated decisions on which auctions will provide the best opportunities is critical.
Example: Years ago, there was a subtle design change in the door handles of most True brand commercial refrigeration. The door handles on these units come either a) bolted onto the door, or b) integrated within the door via a cutaway. The units are otherwise nearly identical. The cutaway door handle is the newer design, so 99.9% of the time, you can tell the type refrigerant inside the unit just by the type of door handles. Let me explain: in refrigerators you want R-134a refrigerant or newer; with freezers you want R-404a or newer. Anything using the older, banned refrigerant types will be incredibly expensive to service because they stopped making those refrigerants a decade ago. So just by the door handles, you can tell if a particular unit is over a decade old, expensive to service, and probably best avoided.
2. Government Sourced Equipment Can Be Superior: There are several reasons for this. First, you’re likely buying equipment from the original owner (the government), so you pretty much know it has been professionally maintained since new. And since it’s the government we’re talking about, you know it was owned by someone who can unquestionably afford the cost of such contracted services. The government doesn’t typically buy equipment by piecemeal… they contract for entire fleets of equipment, from top-of-the-line commercial brands like Hobart, Vulcan, True, Beverage Air, Lincoln, and Berkel, just to name a few. These fleet contracts usually include regularly scheduled, professional service… at intervals recommended and performed by the manufacturer. When you see government sourced equipment at auction, or for sale, many times it because the government is replacing the entire fleet with another fleet contract-purchase. And typically, the government only liquidates equipment because that equipment has met the government’s predetermined standard-replacement-criteria for age… which can be as little as a couple years old. Other times, they close or move a facility and liquidate equipment that is nearly new. Many times, we’ve even seen brand new, never used equipment, still in original packaging, being liquidated by the government. What would you rather have, equipment as described above, or equipment with an unknown history or age? While none of this is a guarantee, it’s a pretty good bet.
3. The Bigger The Equipment, The Bigger the Deal: This tip is for the industrious bidders that have experience and can handle heavy lifting with hard physical labor. Personally, I love that stuff… even if my body regrets it in the morning. The following tip isn’t usually the case, but it’s one that happens often enough to merit keeping it in your bag of tips and tricks.
Many auctions will have extremely large, heavy items that most bidders don’t know how to handle without hiring a commercial moving company. This drastically reduces the number of competing bidders, thus reducing the potential auction price. I’ve been to onsite auctions where walk-in coolers and walk-in freezers sold for only $50 because none of the bidders had the knowledge or ability to professionally disassemble and transport them. I’ve seen other equipment, weighing 2000+ pounds, sell at auction for peanuts because bidders lacked the knowledge and equipment needed to move it. And we’re talking about equipment that has potential for bringing several thousands of dollars or more, with better marketing exposure. I call these situations “Bluebirds.” Why bluebirds? How often to you see a bluebird in the wild? Not too often. But they pop up occasionally, and when they do, it’s makes you happy. You’d be amazed at what you can safely and effectively move with just the following equipment:
Truck with commercial liftgate (can be easily rented if you don’t own one)
Pallet Jack
Commercial Grade Appliance Dolly
Floor Dollies
Machinery Skates (rarely needed)
Pry Bars, Johnson Bars
Basic Tools (socket set, adjustable wrenches, screwdrivers, channel locks, vice grips, wire cutters, electrical tape, and a voltage detector)
It may seem overwhelming to consider moving a 2500-pound piece of equipment out of the building and onto your truck or trailer. But don’t think of it that way. I’ve actually done exactly this… completely by myself, in the beginning of my career. The key is having a proper mindset, and taking your time. The mindset comes from thinking “I only have to move this equipment one inch at a time… and I can move anything one inch.” It’s not a trick, it’s true. If you have some basic tools, and knowledge of leverage, you can move anything an inch at a time. How do you think the pyramids were built? But there’s also a safety measure built into this “inch” thing. If your goal is only to move it an inch, if something fails, if you misjudge or miscalculate, if you loose control of the load, it only moves an inch.
Also consider that it might be easily disassembled into much smaller, manageable pieces. Just be sure to take pictures of it as your disassembling, so it’s just as easy to put back together. It’s also handy to keep Ziplock baggies on hand for screws and hardware.
It’s a great idea to call the auctioneer before you bid to find out what difficulties may be involved at the auction site. You’ll be glad you did, and the auctioneer will surely appreciate the call. You’d be amazed what auctioneers see from unprepared bidders showing up to pick up equipment they have no capability of safely handling. When calling the auctioneer, you’ll want to ask things like:
Where in the building is the equipment located? Will you have to contend with stairs? Are there wheelchair ramps that you can use to bypass carrying the equipment up or down stairs. Is there a useable elevator that can handle the equipment weight?
What is the parking and vehicle access like? Can a truck pulling a trailer easily access the building? If the building is in the city, what is the parking situation (meters, availability, etc)
Has the equipment already been disconnected from gas, water, and electrical lines? This is a great question, even it doesn’t apply to the items you purchased. Would you want to be walking around a building while untrained, unlicensed, unknowledgeable bidders are disconnecting gas lines, cutting power cables, and spraying water all over from leaky waterlines or mishap disconnects? I know this sounds ridiculous, but I promise you, it happens every day in this industry. It pays to make sure you’re dealing with a reputable auctioneer, and there are plenty of reputable auctioneers out there; just do your homework… and keep this tip tucked away in the back of your mind for your own safety.
The prospect of moving any of the equipment as described above may be well outside the scope of what some bidders are prepared to handle. This is when it’s important to do business with auctioneers that have the professional, trained staff and equipment to help. BidTender Auctions is happy to provide such a service to our customers. We usually relocate all the equipment to a location that facilitates the easiest, safest removal for our customers. This saves valuable time and money for everyone involved… and that’s good business. We’re not the only auctioneer that provides such services, there are other great companies that do this as well. But we’re few and far between, and its details like this that can take an otherwise nightmare logistical problem and turn it into a walk in the park.
4. Scrutinize All Items in the Auction: Take a deep look at all the items in the auction, not just the items you want to bid on. Knowing the quality and condition of all the items in the auction can give you possible clues on the source of the equipment. Is there a lot of junk in the auction? That by itself doesn’t necessarily mean much… but it’s worth noting because we’re looking for patterns. Patterns allow us to connect the dots and spot potential issues. Are there items in the auction that don’t fit into the general genre of that particular auction? If so, why would they be there? Are the item descriptions given in an honest, straightforward manor; or are they a sales pitch? I’m not suggesting that a sales pitch is always a negative thing; they can be useful for bidders that are unfamiliar with a particular item up for bidding. But they can also be misleading by unscrupulous sellers.
Example: A refrigerator in an auction is described by saying “just needs Freon.” Statements like that should set off red flag in your mind. At best, it demonstrates a lack of technical knowledge… and anyone making a statement like that should possess technical knowledge. Refrigerant isn’t “used up” like gasoline in your car. Refrigerant is compressed by the compressor, then allowed to decompress, all while remaining inside a closed system. If a unit “just needs refrigerant,” then that means it leaks refrigerant. It’s simple to add refrigerant, and the unit will probably work ok for a while… until too much of it leaks back out. While leaking, the compressor works overtime to compensate for the low levels of refrigerant. This puts undue stress on the compressor and can result in a premature failure of the entire unit. The proper repair is to sweep the unit for leaks and repair them by safely reclaiming the refrigerant, purging with nitrogen, brazing the copper lines and retesting for leaks. Then you purge the system again, using nitrogen, bring it to an atmospheric vacuum, and recharge it with the proper refrigerant, measured precisely by weight. I don’t expect you to remember all of this, and you don’t need to. But you can now see why some equipment owners don’t fix the unit properly… it’s expensive. So whenever you hear an “easy fix” sales pitch on a piece of equipment, ask yourself… if it really is an “easy fix,” why didn’t someone just fix it?
I have plenty more tips and tricks for you, but that’s enough for this blog post. Thanks for reading!
Stay tuned for more helpful information from an industry insider.
Mark W. Busby - Licensed Auctioneer, Founder
BidTender Auctions, Inc., Fairfax, VA
www.bidtenderauctions.com
