How to Buy and Sell Mining Equipment Via Auction
Equipment and machinery is the lifeblood of the mining industry; it’s what allows companies to expand projects, increase production, enhance safety and boost profits. Manufacturers like Liebherr and Caterpillar have revolutionized the mining sector by building stronger, faster, smarter and safer machines. With the help of companies like Richie Bros, acquiring these massive (and expensive) pieces of equipment has gotten a whole lot easier.
Formed in 1958, Ritchie Bros. is the world’s largest seller of used equipment. The company, which has operations in more than 25 countries including 44 auction sites worldwide, has simplified the buying and selling process, incorporating live unreserved public auctions with on-site and online bidding for complete convenience.
With $3.8 billion of equipment sold in 2013, Ritchie Bros. is the preeminent auctioneer of the mining industry.
How it works
The process of buying and selling mining equipment via auction is quite simple.
At the auction, the company will drive the mobile equipment in front of a crowd of seated bidders at the company’s auction theater. An auctioneer will introduce each item and then call for bids. When a bid is placed, the auctioneer raises the ask price. Bidding continues until no more bids are placed. Each item sells to the highest bidder, regardless of price.
“Every Ritchie Bros. auction is unreserved and open to the public,” says Mike Johnston, Senior Vice President of Global Accounts at Ritchie Bros. “Unreserved means there are no minimum bids or reserve prices. Owners and their agents are by contract not allowed to bid on their equipment. Every item is sold to a new owner on auction day, regardless of price.”
Bids can be made in person, live and in real-time online and by proxy. In order to bid, registration is required to be completed in person or online (www.rbauction.com).
The larger and stationary equipment is sold by photo in the company’s Virtual Ramp auction theater, where pictures of the item are shown on a screen in front of the audience. Potential buyers can also have items inspected by their personal mechanics to ensure machinery is up-to-par with their standards.
“We take photos of every item in the yard so potential buyers can view detailed equipment information and high-resolution photos on our website and then visit the auction site, or send a mechanic on their behalf, to conduct a physical inspection,” says Johnston.
In addition, the company offers refurbishing services at an additional cost, including exterior and interior cleaning, sandblasting, welding, metalwork and light mechanical repair, painting, decal replacement as well as glasswork and upholstery repair.
Array of Benefits
The conventional approach to purchasing equipment and machinery has always been to go through dealers of manufacturers. Although this approach does offer benefits like manufacturer warranties and maintenance services, the perks of acquiring equipment through auctioneers like Ritchie Bros. are enormous.
“The biggest advantage of buying at an unreserved auction is that we have no sticker prices. With no minimum bids or reserve prices, it’s buyers who set the prices, not sellers, and everything sells for true market value on auction day,” says Johnston.
“Because we forbid sellers from bidding on their own items, there’s no artificial price manipulation, making the buying process fair and transparent.”
In addition to saving money on brand name equipment, users can buy or sell at their convenience. The process is user-friendly and adapted to make it simple for even the most novice buyer.
Tips for buying used equipment
Ritchie Bros. has made it extremely easy to buy and sell mining equipment via auction. Along with providing a convenient platform, the company is keen on informing users on the process as well as providing how-to tips with options for buyers and sellers to maximize their earnings.
First impressions count: Conduct a visual inspection of the machinery, including asking questions like: Is it in good condition? How is it presented? Are any panels damaged? Has the machine been repainted? Bidders should check the condition of any ground breaking tools and engaging components for wear and tear. Make sure to inspect the drive train to identify if there are any oil leaks as well as the condition of the pin and bush wear.
Test the equipment: Potential buyers should always operate the equipment before making a bid. Drive the machine, move it backwards, forwards, lift all the machine’s moving parts. Check the steering arms and inspect under the carriage for wear and tear. Check the position of the track adjuster to see if the tracks are worn out. If they are, it will be tightened.
Get under the hood: Buyers should always inspect the equipment’s engine and components before bidding. Make sure to look for excessive smoke and/or coloring. It could be a tell tale sign of engine problems. In addition, be sure to request the computer logs of the machine to check hour meters.
Do research before buying: Similar to purchasing a car or home, buyers should do their homework before signing their name.
