GOING GOING... This auction company will sell machinery and plant of all brands and types (Pictures for illustration only.)
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A US-based internet auction firm has ambitions for a global reach, with new sales starting in Europe.
With the downturn biting as hard as the cold north wind in Europe, there seems little reason to be cheerful. Every time you read the news, more projects are being cancelled, factories are closing and equipment is being repossessed.
There certainly doesn’t seem to be a lot of point in launching anything new in the PMV sector.
However, one man with a spring in his step is Tom Cornell. Previously an overseas manager for JCB, he has recently taken the position of European MD for an online auction company you may, or may not have heard of – a firm named Iron Planet.
This company was formed in 2000 to put US sellers in front of buyers from all over the world. Since then, it has enjoyed steady growth – until the last year or so where, along with the traditional auction houses, the company expanded rapidly, despite market struggles.
The company decided to expand into Europe and got its first EU sale in the last week of January.
One of the reasons for this was that it is difficult to bring machines into member countries that don’t have CE conformity markings, though machines already in the EU can be exported anywhere, with or without the CE mark.
We were interested to find out why it was that auctions seem, so far at least, to be performing while the rest of the market, particularly in Europe, is static.
Cornell cites three reasons, suggesting that buying online is no longer the preserve of the few. “The first and most important reason that this business model is gaining traction quickly is that people are comfortable with it and it is working. It is becoming a popular way of disposing of, and buying equipment” he said.
It isn’t all down to people being more comfortable with buying online, as Cornell concedes. “The second reason is that there is a lot of second hand equipment in the marketplace to be sold at present.”
This is certainly the case. Apart from the volumes of machines needing to be shifted out of Europe and the US through ‘natural causes’, such as plant managers deeming items too old to be profitable, the much publicised downturn is causing firms to review inventories and in some circumstances having to liquidate altogether.
There is another cause as well – environmental legislation, which bans many older machines from worksites. This is particularly noticeable on several city projects, such as the 2012 Olympic site in Stratford, where thanks to the introduction of a special ‘low emissions zone’ throughout London means many pieces of reasonably new equipment can’t be used unless retro-fitted with complex filter systems.
The end result is that these machines are offered on the open market, where somebody may well get a bargain. Of course, this volume of machinery will most likely be heading in the direction of the Middle East and Africa, where emission standards, if they exist at all, are not so strict.
The third reason for the firm’s recent success is due to changes in the internal structure, according to Cornell. “The message that, hopefully, you’ll be delivering to your readers will be the same as that from a team of salesmen, everywhere.”
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