Posted By: Southern Fabricating Machinery Sales | Posted On: June 15, 2020
How to Know When It's Time to Sell Your Used Machinery
Although it seems like an easy feat, selling used machinery can be one of the most daunting processes ever if you go it alone. Deciding when to sell is as equally important as determining how you sell your used machine. Additionally, it would be best if your potential buyers are assured that your machine is in top shape, well maintained and ready to go into production for their needs. You will need to accurately determine the machine's worth as well as all costs associated with getting it deinstalled and properly prepared to be loaded on a buyer’s truck. Further you will need to know what the rigging/loading charges will be.
Whether you need to sell it quickly, or would rather hold out for a higher price determines the price, approach and strategy you need to use. Read on as we outline the used machinery selling process and show you how to derive the most value out of your used equipment.
5 Signs It's Time to Sell Your Used Machinery
The first item you need to consider when deciding if it is time to sell your used machine is how long it has served you. Most buyers want to know when the equipment was manufactured and the number of hours it has been running. Parts typically become harder to find and the machine is likely much slower and less accurate than a newer model would be. If a machine has been in your workshop for years, it might be the right time to sell and upgrade to a new machine.
How well you have maintained and cared for your equipment will matter the most, not only for your direct use but also for a potential buyer. Well maintained pieces of equipment will be easy to sell and good records of regular maintenance make that easy to share with a potential buyer. Prior to offering it for sale make sure you complete a thorough inspection and repair any necessary item, or remove them (if they are optional) so that your buyer sees a fully functioning system and not a broken controller hanging off to the side. It’s always best to make sure that you put your machine in the market when it is still in its pristine condition.
- How often the machine is used
Changes in work patterns or changes in operations and work requirements may impact how often you use a piece of equipment. Sometimes a piece of equipment can be used every day heavily and then a job completes and it sits unused for a while. Sometimes, it may even lie idle in your workshop for years. When you find that you're staying for a month without using a particular machine, it is time to look at the value of the machine and how that value can be better used in other equipment as well as the space that piece of equipment is taking.
- Favorable Economic Climate
The state of the economy is also an essential factor determining if it's time to sell your used machinery. As the manufacturing market booms or slows, it will directly affect not only the value of your equipment but also the saleability of it. If you have a machine that you've been thinking of selling, trading, upgrading, the best time to sell is when there is a favorable market.
- When it Costs More to Keep the Machine Running
If keeping your used machine doesn't make economic sense, it may be time to let it go. Many times older equipment maintenance costs more and more as technicians familiar with the equipment are harder to find as well as parts and consumables too. When you discover that your piece of equipment is taking more than it is giving out, it makes no sense to keep it in your workshop.
3 Ways to Sell Your Used Machinery
- Selling through a Used Machinery Auction
Auctioning is one of the most convenient methods of selling many pieces of equipment quickly. While this isn’t the best solution for one piece it can be very beneficial for multiple machines with equipment values over 100K. An auction can not only be for a plant closure but also many times are for a companies retooling with new equipment. A well organized and advertised auction will attract potential buyers from a vast array of industries all bidding against each other creating an increasing demand for your equipment. The other benefit of auctioning your item is that there is a higher probability that someone will buy it, especially if you have a low, or no reserve. Since auctions involve price wars between various interested parties, you’ll likely get the highest price possible. Sellers have to choose whether they want to sell their items through unreserved or reserved actions.
- Consigning or Selling to Used Machinery Dealers
Equipment dealers are well-positioned to buy your item outright or sell it for you from your floor for a commissionable amount of the sale. This is because they understand the used machinery industry better, are networked throughout the world with other machinery dealers and can use these connections to market and sell your machine faster. Additionally, machinery dealers have open locations where they can showcase your item to the general public.
Selling a machine on a “brokerage” basis with a qualified machinery dealer can also protect you from future liability as the terms of purchases from a used machinery dealer are carefully worded to protect the seller. Working with a dealer like Southern Fabricating Machinery Sales also provides you the opportunity to make the transaction sales tax free as you are selling your equipment for resale. Consignment or outright selling of your equipment to a qualified machinery dealer is well worth consideration due to their industry & market knowledge, vast connections, marketing plan, and openness to the idea of trade-ins.
- Private Sale
While this type of sale keeps you in control, it is risky, time-consuming and may cost you a fortune. Additionally, it may require a significant investment to place ads or list your machine online or in print advertising. Going it alone means that the costs of prep, removal, storage, marketing the machinery, insurance, negotiating a deal, filtering out solicitations and legitimate offers, and facilitating inspections will all be yours. Worse you likely will have to collect and pay sales taxes on top of capital gains taxes that may be incurred.
If possible, choose a trusted company such as Southern Fabricating Machinery Sales to work out the best deal for your machine. Choosing a reputable company to hold your hand through the process not only saves you time but also resources and headaches. Selling machinery is what we do all day, every day and we do it better then any one!