Whether in an attempt to make room for an upgrade on your manufacturing floor or in the process of reducing or liquidating assets, there’s going to come a point that your business will have to offload machinery. Unless the equipment is broken beyond repair, there’s a strong likelihood that there’s someone somewhere who will buy your used equipment. But machinery pricing can be a tricky thing, and it’s important to understand what can impact machinery and equipment appraisals. Let’s take a deep dive on factors affecting the appraisal process and resources you can turn to in order to get the best return when selling heavy equipment and machinery.

Factors Affecting the Price When Selling Heavy Equipment

Manufacturing equipment and machinery lose value from the moment of purchase, and depreciation can vary depending upon a number of factors, some of which the owner can control and some that are beyond their ability to influence. Here’s what you need to consider when selling heavy equipment.

Reputation of the Previous Owner

In business, your reputation can impact who you get to do business with as well as what the cost of doing business might be with vendors and service providers. With the sweeping impact of social media leaving no corner of our economy able to avoid the spotlight, your reputation as an honest and fair provider of services becomes even more important when you need to offload equipment and machinery. Customers and previous buyers will be quick to provide negative feedback online if you’ve provided poor service, sold defective products, or tried to sell machinery without disclosing issues in the past.

This negative perception can cause potential buyers to consider transactions with you as “high risk,” and they will not be as willing to pay fair market prices for equipment you might be selling. Alternatively, if you’re known for taking care of your equipment and facilities, treating your customers fairly, and providing fair deals when dealing with vendors or suppliers, then that reputation will ensure potential buyers for your equipment will trust that it’s been cared for and their offers will be more inline with a fair market value.

Supply and Demand Versus Economic Conditions

While you cannot control conditions across the economy, you can plan to take advantage of the resulting trends in supply and demand with any equipment you might be looking to sell. During a downturn, potential buyers are more cognizant of their bottom-line profitability, and they will be very aggressive in drawing out negotiations in order to secure lower prices. A slow economy also leads many companies to offload equipment in order to balance production capacity against reduced demand from their customers, giving those in the market to purchase used equipment an advantage. Seasonality plays a huge role in the demand for and subsequent pricing of equipment and machinery as well and can create high demand in certain regions where other markets might have a low demand for specific equipment. Savvy sellers will know to consider multiple markets and industries when looking to offload equipment in order to get the most money for their machinery.

The Equipment’s Vital Stats – Who, What, and How Old?

Equipment and machinery appraisals can be greatly impacted by the brand. Certain manufacturers dominate specific industry segments and brand loyalty can greatly increase the value of your equipment if it’s of the right make. Alternatively, if you’re using a less expensive brand, it’s important to ensure your sales valuation includes a comparison to the functionality of popular brands in order to position it properly.

This raises the importance of model and features in the appraisal process for machinery. Specialized equipment – whether through special features or attachments – tends to meet a very narrow market segment demand and in many cases can have both a positive and negative impact on the sales price. Standard models with diverse functionality and usage applications can appeal to a larger pool of buyers, and tend to fluctuate less in price and are easier to move quickly on the market.

Machinery and equipment appraisals can also be influenced to varying degrees by the age of the unit. Over time, equipment value depreciates due to wear and tear, maintenance requirements, and capacity for further production. It’s important to note that when new models come onto the market, this doesn’t automatically mean that older models will be worthless. In fact, if newer models are not competitively priced when they hit the market, demand could greatly increase for older models with similar functionality.

Machine Condition

With age and model significant factors in establishing equipment value, the overall condition of the machine is even more important. Two pieces of equipment can be the same age and model, but the unit that will fetch the higher price is the one whose owner has followed the maintenance schedule, cared for the unit, and maintained records of repair and maintenance as well as proof of ownership. This gives buyers more confidence that the machine will operate as intended, and that their overhead costs for continuing and ongoing maintenance will be minimized over the life of the unit. It’s important to note here that the unit must not just be maintained, but on the exterior appear to have been well maintained as well. When selling a piece of equipment, it’s important to balance what you expect to get for it on the market against what you’ll have to invest in it to ensure that it’s market-ready. This can include necessary repairs to ensure the unit is functional, as well as cleaning and painting the unit so that it doesn’t have the look of having been on your assembly line for the last 5 years.

Is Machinery Accessible for Inspection and Testing?

The decision to purchase used machinery isn’t one many businesses will make sight unseen. If you’re keeping the equipment in use until it sells, giving potential buyers access to the equipment to see it in action or have it assessed is key to reassuring the buyers it’s worth the price your asking.

Contact us Before Selling Heavy Equipment

Certified AMEA equipment appraisers are the best resource for determining the best machinery pricing strategy for the equipment you’re planning to sell. Georgia-based industrial machine specialists The Equipment Hub has a team of certified machinery and equipment appraisal experts ready to provide your organization with the most accurate information possible. A simple information request through our website will put you in touch with appraisers experienced across all industries and with all types of appraisals outlined by the Uniform Standards of Professional Appraisal Practice (USPAP). And once you’ve established a fair market price for your machinery or equipment, The Equipment Hub can put you in touch with our asset management solutions team to explore immediate solutions.

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