10 Tips to Buying Machinery in an Online Auction
The Machinery Brand
There are countless machines brands on the market now, all machinery especially forklifts are not made equal.
Do some research on the brand you are wanting to buy at Auction. Find out where it is made, is it a common brand to find in the Australian market. Is there spare parts and service readily available for the machine.
There are lots of small business importing unknown brands and pushing them through the Auctions to realise a quick financial gain. Unfortunately, there is little support in place for this type of machinery purchased via online auction.
The Condition of the Unit
Buying anything via online auction can be a very unsettling experience for a purchaser. Online auctions have become the go to place for Machinery owners to sell underutilised machinery.
Try to get a condition report on the machinery before you start bidding on it, most auction houses can provide something if asked.
If the location is too far away for you to go to and inspect yourself. Then try to get a trusted friend to go and inspect the machinery for you.
If that’s not possible you can always pay a local mechanical business to go to the machinery location and give you a condition report.
Auction Price vs Retail Price
This is an interesting point to consider, in the past Auctions houses were the place to go and find a bargain. But with the development of the internet and as business in general develops into an online world.
Online auctions have become a place where lots of transactions happen daily. Auction “bargain” price is something that has rapidly moved into an Auction “retail” price. You only need to look at eBay to see the “buy it now” option is popular.
So, make sure you have done your research make sure you know what is a “bargain” price v’s a “retail” price. You don’t want to pay more than you should for something that you could of got by going an talking to your local dealer.
The Service Records
As we said early, when buying a machine brand, you need to make sure you can service the machinery.
If you are mechanically minded yourself that’s great, but if you are relying on a subcontract mechanic to service and repair the machinery when it breaks down. You need to know that you can get service books or at least service advice from an OEM if needed.
Always remember machinery will break down, but the real cost to your business is how long will it be down for. Having service manuals on hand can save you a lot of time in repairing machinery when it breaks down.
Spare Parts Availability
Spare parts go hand in hand with service, you need to be able to readily source parts when your machinery breakdown. When buying at Online auctions and you are buying a brand that is unfamiliar in your market place. You need to ask yourself the obvious question, “where am I getting spare parts from”
If it is a foreign brand in your market, it can be almost impossible to source genuine parts when you need them.
There are only a few machinery dealers that have the international parts sourcing reach that you will need.
This goes hand in hand with the condition of unit. There are a lot of machinery at online auctions that are reported to have low hours of operation and have been given a quick “liquid overhaul”
Make sure you find out where the machine was previously. There is a big difference with a machine that has done a 1000 hours of operation in a hard operation like a foundry and a machine that has done a 1000 hours of operation in a fruit shop.
This is something that is often over looked by people buying online, they are able to find the bargain that they want, in another state. Then only to find that the transport cost is well above what they thought it would be.
When adding the transport cost to the cost of the bargain that they’ve bought online they find that they could of bought something locally for the same price.
When buying machinery for an online auction, do not think for a minute that you will be getting warranty with your purchase.
Unless stipulated the machinery will be sold as is where is. So, when the purchaser get the machinery to where they need it to be and start to use it. And find that it breakdowns due to failure in the first 30 – 90 days, there is no w2arranty to cover the purchase.
You are up for the full costs of repairs.
So going back to what we said early, condition of unit, spare parts availability and service availability is crucial to keeping the machinery running.
The Machine’s After Life
As with any machine purchase you always need to consider what you will do with it, once it’s performed the duties you require it for.
Can you easily resell it, could you relist it for an online auction yourself and sell it, do you own it for the term of its natural life?
Having a disposal plan in place for any machinery you purchase is always a smart thing to do.
Payment Terms & Conditions
This is something that is often over looked as well, when buying online, there is always a buyer premium, GST and any other fees that might be incurred.
Then there is always a pay immediately aspect to an online auction. This means that you need to make sure you have funds readily available, whether its cash in the bank, or bank finance ready to go before you make a purchase from an online auction.
Just a final point to consider when buying from an online auction, you need to keep your emotions in check. It’s too easy to get carried away, with watching the price climb higher and higher of your computer screen.
The feeling of wanting to win, can be a little overwhelming for some people. So follow this advice, make sure you know what you want to spend, how much it is worth, and can you fix the machine when it breaks down, then you should have no problems when buying machinery from an online auction.
Guest Post by http://forkliftmarket.com.au/