A used-truck auction can be quite a social event. There may be a pig roast or a hot-tub giveaway, and there are always lots of old friends to visit with. But is it the most effective way to either buy used equipment at the best prices or to maximize your returns when you have trucks to sell?
Moving used-truck auctions online holds the potential of opening the sales process to the widest possible audience of both sellers and buyers. The benefit for buyers is that it lets them reach out beyond a local pool of trucks to a national market, improving their chances of getting just the right truck for their operations at the right price. And for sellers, a large auction audience can increase bid activity, leading to higher average prices.
Despite the obvious advantages of online auctions and their success in many other industries, trucking has up to this point been less than enthusiastic about trading used equipment it couldn't see and touch.
That may be about to change. First, we're all much more comfortable with online transactions these days. But more importantly, online auctioneers may have figured out what features unique to a virtual used-truck event will help them overcome the “kick the tires” advantage of live, physical auctions.
Iron Planet (ironplanet.com) has an established track record auctioning construction equipment online and is now moving to translate that experience into an attractive online auction market for used trucks.
When someone wants to consign a truck, or trucks, to an Iron Planet auction, the company sends an inspector out to the seller's location. The inspectors — some company employees and other independent contractors — submit a detailed report that both rates condition and documents problem areas with photos. “Instead of estimating repair costs, we clearly describe conditions so a buyer can determine how much it will cost them to repair,” says John Paschack, national accounts manager for trucks.
Consigned vehicles are then placed in a 4-week preview so potential buyers, who must register with the site, can examine the reports and contact sellers for additional information. They can also place priority bids before the auction and indicate a way they can be notified if they are outbid once the trucks enters the auction.
Every other Thursday Iron Planet holds its featured sale, an unreserved auction beginning at 7 a.m. PST. Trucks for sale are scheduled to come up for bids in 10-minute windows. As the minutes countdown, any new bid activity will extend the bidding by three minutes. “That means you don't have a last-minute bid stealing a win and the bidding remains open until everyone is finished,” says Paschack.
Once the auction is over, Iron Plant handles all of the backend financial functions including settlement. “We also provide a list of transport providers in case the buyer doesn't want to do that themselves,” says Paschack.
After a buyer takes delivery, the company backs its inspection reports with what it calls its Iron Clad Guarantee. “If a buyer finds any item missed by our inspector, we have a process to settle that dispute,” says Paschack. “Guaranteeing the accuracy of our inspection reports is important to making our model work.”
For sellers, the advantage is the simplicity and the access to a large market of buyers. “You just have to have the equipment ready on you site for our inspector,” explains Paschack. “After the auction, we tell you who bought it, send you a release, and all you have to do is hand over the keys.”
For buyers, the online format means access to equipment that may be in short supply in their local area or available more cheaply in another region. And Iron Planet handles secure transfer of payment and title.
“We think that frequency, detailed inspection reports, long preview periods, simple transactions and a large buyer's base will add up to success for Iron Planet's approach to online used truck auctions,” says Paschack.
Interested buyers and sellers can go to the Iron Planet site to try a practice auction. And if you register, you not only get to look through the equipment listed for preview, but also get access to all historical data so you can research past sales information to help with their bidding.