|
| One of Ritchie Bros. common approaches with sellers is to purchase a package of equipment and then sell it through RBA's no-reserve auctions. Because it is no reserve, the price RBA pays to the seller reflects a risk discount - asset will sell to the auction buyer for whatever the price.
Why would a dealer sell big batches of used combines at auction? A few possibilities: 1) Selling late model used anything ag is becoming more difficult for some dealers to do. Had a dealer tell me today that he can hardly get a used combine off his lot - most farmers in his trade area want a new combine every year (he was from Big Acres country); 2) immediate cash for the dealer now (either through the auction or a purchase by RBA) is more important to the dealer's financial plan than a later sale at a potentially higher (or lower!) price; 3) if the combines are competitive with the dealer's line, then it has no potential for future parts and service revenue so holding it in inventory is not as easy to justify as would be for a used "same kind" machine; 4) seasonality and new machine order/roll timing means sell it now or hold for many months to hit the next buying cycle (most true for combines and planters these days).
Used equipment inventories (especially later model) are the toughest problems for many dealers today, and it will get harder before it gets easier to solve. Auction is simply a method to control the timing of the solution. To claim that dealers are trying to flush poor condition machinery only is an over-generalization and doesn't take into account other less nefarious reasons for an auction sale.
Jerrod at Purple Wave Auction
www.purplewave.com | |
|
richie bros. sale
